Community Development Block Grant
Encyclopedia
The Community Development Block Grant (CDBG), one of the longest-running programs of the U.S. Department of Housing and Urban Development, funds local community development
activities such as affordable housing
, anti-poverty programs, and infrastructure development. CDBG, like other block grant
programs, differ from categorical grant
s, made for specific purposes, in that they are subject to less federal oversight and are largely used at the discretion of the state and local governments and their subgrantees.
, at $4.7 billion in FY2005. Larger cities and urban counties, called "entitlement communities," are required to prepare and submit a "Consolidated Plan" that establishes goals for the use of CDBG funds. Grantees are also required to hold public meetings to solicit input from the community, ensuring that proposed projects are aligned with the community's most urgent needs.
Proposed CDBG projects must be consistent with broad national priorities for CDBG: activities that benefit low- and moderate-income people, the prevention or elimination of slums or blight, or other community development activities to address an urgent threat to health or safety. CDBG funds may be used for community development activities (such as real estate acquisition, relocation, demolition, rehabilitation of housing and commercial buildings), construction of public facilities and improvements (such as water, sewer, and other utilities, street paving, and sidewalks), construction and maintenance of neighborhood centers, and the conversion of school buildings, public services, and economic development and job creation/retention activities. CDBG funds can also be used for preservation and restoration of historic properties in low-income neighborhoods.
through the Housing and Community Development Act
of 1974 and took effect in January 1975. It had bipartisan support, reportedly because liberal legislators shared its goal of extinguishing poverty and "urban blight" and conservative legislators appreciated the control it placed in the hands of private investors and the reduction it made in the role of the United States government. Cities automatically qualified for the grant if they met the requirements, but were required to submit allocation reports (showing to whom and where the money was spent) and quarterly reports to the United States Department of Housing and Urban Development
. HUD's records were disputed, and there were complaints that Southern cities, in particular, spent grant money in affluent neighborhoods. CDBG funds were distributed in such a way as to generate a bias against older (declining) frostbelt cities, cities that were losing population to the sunbelt.
When Congress re-authorized CDBG in 1978, they instituted a dual formula to strengthen controls on how money was spent and to better serve communities with different types of problems. Formula A (based on poverty rate, population, and overcrowding) typically benefits rapidly growing cities with high poverty that lack affordable housing. Formula B (based on age of housing stock, poverty rate, and growth lag) tends to benefit older cities with large amounts of old and deteriorating housing. HUD calculates both formulas for all entitlement grantees and awards the larger amount, but Congressional appropriation has ultimate determination on program funding. The 1978 re-authorization also required HUD to award a "rural set-aside" of at least 30% of all CDBG funds to states for projects in rural areas.
Later Congressional changes created additional small CDBG set-asides that fund programs in minority-serving universities (Section 107), in US territories such as Guam, and for large-scale rehabilitation loans (Section 108).
In response to Hurricane Katrina
, Congress authorized HUD an additional $4.2 billion in CDBG funds for recovery of the Gulf Coast Region in 2006.
In February 2011, the Republican Majority in the House of Representatives proposed reducing the CDBG appropriation by over $500 million.
In early 2011, for the FY 2012 United States Budget
, President Obama
proposed $300 million in reductions to the Community Development Block Grant Program.
and other previous Federal attempts to alleviate poverty and blight in US Cities, was criticized as being a "top-down" approach. For these programs, Federal planners would dictate how and where funds were spent. In contrast, CDBG was constructed to be a "bottom-up" approach.
In order to receive CDBG funds, applicants must identify urgent needs of the community, and solicit project ideas and plans from citizens and local organizations that address those needs. Thus, the CDBG program represents a significant shift in how the federal government addresses poverty and blight. Some researchers argue that because CDBG is a bottom-up program it is significantly more successful than previous programs. Others have said CDBG's scope of allowed activities is too broad, making it difficult to measure program performance.
Community development
Community development is a broad term applied to the practices and academic disciplines of civic leaders, activists, involved citizens and professionals to improve various aspects of local communities....
activities such as affordable housing
Affordable housing
Affordable housing is a term used to describe dwelling units whose total housing costs are deemed "affordable" to those that have a median income. Although the term is often applied to rental housing that is within the financial means of those in the lower income ranges of a geographical area, the...
, anti-poverty programs, and infrastructure development. CDBG, like other block grant
Block grant
In a fiscal federal form of government, a block grant is a large sum of money granted by the national government to a regional government with only general provisions as to the way it is to be spent...
programs, differ from categorical grant
Categorical grant
Categorical grants are grants, issued by the United States Congress, which may be spent only for narrowly-defined purposes. Additionally, recipients of categorical grants are often required to match a portion of the federal funds...
s, made for specific purposes, in that they are subject to less federal oversight and are largely used at the discretion of the state and local governments and their subgrantees.
Allocation of Funds
CDBG funds are allocated to more than 1,100 local and state governments on a formula basisFormula Grant
A formula grant is a United States federal grant specifying a precise formula in the legislation creating the program. Formula Grants include quantifiable elements, such as population, amount of tax effort, proportion of population unemployed or below poverty level, density of housing, or rate of...
, at $4.7 billion in FY2005. Larger cities and urban counties, called "entitlement communities," are required to prepare and submit a "Consolidated Plan" that establishes goals for the use of CDBG funds. Grantees are also required to hold public meetings to solicit input from the community, ensuring that proposed projects are aligned with the community's most urgent needs.
Proposed CDBG projects must be consistent with broad national priorities for CDBG: activities that benefit low- and moderate-income people, the prevention or elimination of slums or blight, or other community development activities to address an urgent threat to health or safety. CDBG funds may be used for community development activities (such as real estate acquisition, relocation, demolition, rehabilitation of housing and commercial buildings), construction of public facilities and improvements (such as water, sewer, and other utilities, street paving, and sidewalks), construction and maintenance of neighborhood centers, and the conversion of school buildings, public services, and economic development and job creation/retention activities. CDBG funds can also be used for preservation and restoration of historic properties in low-income neighborhoods.
History
The Community Development Block Grant (CDBG) was enacted in 1974 by president Gerald FordGerald Ford
Gerald Rudolph "Jerry" Ford, Jr. was the 38th President of the United States, serving from 1974 to 1977, and the 40th Vice President of the United States serving from 1973 to 1974...
through the Housing and Community Development Act
Housing and Community Development Act
Housing and Community Development Act, the name of several United States federal laws, may refer to:*Housing and Community Development Act of 1974*Housing and Community Development Act of 1977*Housing and Community Development Act of 1980...
of 1974 and took effect in January 1975. It had bipartisan support, reportedly because liberal legislators shared its goal of extinguishing poverty and "urban blight" and conservative legislators appreciated the control it placed in the hands of private investors and the reduction it made in the role of the United States government. Cities automatically qualified for the grant if they met the requirements, but were required to submit allocation reports (showing to whom and where the money was spent) and quarterly reports to the United States Department of Housing and Urban Development
United States Department of Housing and Urban Development
The United States Department of Housing and Urban Development, also known as HUD, is a Cabinet department in the Executive branch of the United States federal government...
. HUD's records were disputed, and there were complaints that Southern cities, in particular, spent grant money in affluent neighborhoods. CDBG funds were distributed in such a way as to generate a bias against older (declining) frostbelt cities, cities that were losing population to the sunbelt.
When Congress re-authorized CDBG in 1978, they instituted a dual formula to strengthen controls on how money was spent and to better serve communities with different types of problems. Formula A (based on poverty rate, population, and overcrowding) typically benefits rapidly growing cities with high poverty that lack affordable housing. Formula B (based on age of housing stock, poverty rate, and growth lag) tends to benefit older cities with large amounts of old and deteriorating housing. HUD calculates both formulas for all entitlement grantees and awards the larger amount, but Congressional appropriation has ultimate determination on program funding. The 1978 re-authorization also required HUD to award a "rural set-aside" of at least 30% of all CDBG funds to states for projects in rural areas.
Later Congressional changes created additional small CDBG set-asides that fund programs in minority-serving universities (Section 107), in US territories such as Guam, and for large-scale rehabilitation loans (Section 108).
In response to Hurricane Katrina
Hurricane Katrina
Hurricane Katrina of the 2005 Atlantic hurricane season was a powerful Atlantic hurricane. It is the costliest natural disaster, as well as one of the five deadliest hurricanes, in the history of the United States. Among recorded Atlantic hurricanes, it was the sixth strongest overall...
, Congress authorized HUD an additional $4.2 billion in CDBG funds for recovery of the Gulf Coast Region in 2006.
In February 2011, the Republican Majority in the House of Representatives proposed reducing the CDBG appropriation by over $500 million.
In early 2011, for the FY 2012 United States Budget
United States federal budget
The Budget of the United States Government is the President's proposal to the U.S. Congress which recommends funding levels for the next fiscal year, beginning October 1. Congressional decisions are governed by rules and legislation regarding the federal budget process...
, President Obama
Barack Obama
Barack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...
proposed $300 million in reductions to the Community Development Block Grant Program.
Relations with other programs
The CDBG shares some features of the Urban Development Action Grants (UDAG). UDAG, along with urban renewalUrban renewal
Urban renewal is a program of land redevelopment in areas of moderate to high density urban land use. Renewal has had both successes and failures. Its modern incarnation began in the late 19th century in developed nations and experienced an intense phase in the late 1940s – under the rubric of...
and other previous Federal attempts to alleviate poverty and blight in US Cities, was criticized as being a "top-down" approach. For these programs, Federal planners would dictate how and where funds were spent. In contrast, CDBG was constructed to be a "bottom-up" approach.
In order to receive CDBG funds, applicants must identify urgent needs of the community, and solicit project ideas and plans from citizens and local organizations that address those needs. Thus, the CDBG program represents a significant shift in how the federal government addresses poverty and blight. Some researchers argue that because CDBG is a bottom-up program it is significantly more successful than previous programs. Others have said CDBG's scope of allowed activities is too broad, making it difficult to measure program performance.
External links
- Community Development Block Grant Program - CDBG - HUD website