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Birmingham City Council Approves Funding to Provide Housing for Low-Income Families

Non-profit organizations are a vital part of our communities. Birmingham City Councilors often rely on their enormous variety of services to contribute and impact the lives of many in need. On Tuesday, Birmingham City Councilors voted unanimously to approve a resolution authorizing the Mayor to enter into a joint commitment with the nonprofit agency United Way of Central Alabama. This resolution will allow the Mayor to issue a firm commitment to allocate $200,000.00 of the City’s U.S. Department of Housing and Urban Development Community Development Block Grant (HUD CDBG) funds to support the United Way of Central Alabama’s application for the Assets for Independence program (AFI).

AFI is a community-based program that provides low-income families with assistance in purchasing homes. Utilizing existing individual and community assets, AFI strengthens communities from within through the use of matched savings accounts called Individual Development Accounts (IDAs). AFI’s are designed to demonstrate the use and impact of IDAs to help low-income individuals move toward greater self-sufficiency, through financial education.

IDAs would allow for the development of match savings accounts through a program established for low to moderate income families and individuals looking to achieve the goal of housing down payments, micro-enterprise developments, or education and job training expenses eligible under the HUD public services criteria, if the match funds application is awarded.

While the Council did approve funding for the United Way, the topic of appropriating funds to non-profits was raised to gain further insight on what the Council can and cannot approve.

According to SECTION 94 of the Alabama Constitution “the legislature shall not have power to authorize any county, city, town, or other subdivision of this state to lend its credit, or to grant public money or thing of value in aid of, or to any individual, association, or corporation whatsoever, or to become a stockholder in any such corporation, association, or company, by issuing bonds or otherwise.”

Councilor Steven Hoyt asked that the Council receive further guidance from the city’s law department to ensure that the Council is following proper guidelines and procedures.

“Funding non-profits in our communities is the most fiscally responsible act that public officials can partake in,” Councilor Hoyt said. “I understand the legal obligations that regulates our giving to these organizations, I just want to make sure that we direct them to the resources needed for them to continue to thrive.”

Those legal conditions of funding are outlined in the State of Alabama Constitution which states that federal grants, many of which are designed specifically to provide funds for nonprofit activities, can undertake certain activities including providing funding to entities, including nonprofits. The Council expects to review this issue at greater length once additional information is provided by the law department.

This article is a contribution from Chiara Perry (chiara.perry@birminghamal.gov) in the Birmingham City Council Public Information Office. For more information please contact 205.254.2294.