Did You Know that Cities Can Buy and Sell Federal Grants?

Last year, Malibu, Calif., was one of several thousand communities across the country that received federal grants intended to improve the lot of low- and moderate-income residents. But instead of putting the $54,866 it received to work on an eligible project, like restoring houses, the city did what dozens of other well-off municipalities have done: it sold its grants to other communities in exchange for smaller purses that had no strings attached.

Full article on development grant sales.

Comments (5)

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  1. Benedict Popplewell says:

    “Democracy” at its finest!

  2. Andrew O says:

    From the article: “They did issue a warning to Milwaukee County in 2011 after a Wisconsin newspaper reported that one of the county’s richer suburbs, River Hills, was routinely trying to sell its grant allocation. Threatened with penalties, the county took that option off the table.”

    Another example of spending being allocated to the wrong places — talk about efficiency.

  3. Studebaker says:

    Greece and Spain have both experienced their day of reckoning. I’m afraid ours is yet to come.

  4. Peterson says:

    Encouraging to hear that city neglected to use the funds for their original purpose.

  5. Gabriel Odom says:

    Call me Devil’s Advocate here, but I think this whole set-up is ingenious. Give the money you can’t use (because you have no poor people) to the cities that can use it. I would rather see these exchanges take place at 50 cents on the dollar rather than 70, but still.

    On the other hand, since these are need-based grants, how in the blue hell did Beverly Hills qualify in the first place?