Community Development Block Grants Proposed for Elimination

By John Collier, GOPC Intern

The Community Development Block Grant (CDBG) is one of the longest running programs of the US Department of Housing and Urban Development. Beginning in 1974, the program has provided communities with a source of flexible funds to aid in affordable housing and anti-poverty programs. The future of the program is unclear, as the Trump Administration, in its 2018 Budget Blueprint, is calling for the elimination of the CDBG program.

The flexibility of the CDBG program sets it apart from other grant programs provided by the federal government. With CDBG grants, state and local governments have a large amount of discretion in how the money is spent, and require less federal oversight.

CDBG funds are allocated in two separate funding streams.  One goes to states and the other directly to cities meeting certain requirements. Seventy percent of CDBG funds are allocated to what is referred to as the CDBG Entitlement Program. This program distributes funds directly to large cities and urban counties. Eligible communities receive CDBG funds determined by a formula based on population, poverty rates, and housing units. Since the funding is based on a formula and depends on a number of factors, CDBG funding can vary from year to year. 

The other 30 percent of CDBG funds are allocated to the State CDBG Program. States award the CDBG funds to smaller units of government for a wide array of purposes. The State CDBG Program allows non-entitlement cities (typically cities with populations fewer than 50,000) to benefit from this CDBG program. In Ohio, CDBG funds are administered by the Office of Community Development at ODSA. The Office of Community Development outlines four areas for CDBG funding in Ohio:

  1. Community Allocation – projects including public facilities, services, housing, and economic development
  2. Neighborhood Revitalization – targeted investment in low and moderate-income neighborhoods
  3. Downtown Revitalization – targeted investment in façade improvements, streetscapes, and public infrastructure
  4. Critical Infrastructure – high priority projects, typically single-component projects such as roads and drainage, which provide a community wide impact

In 2016, Ohio received $137,566,074 from HUD’s CDBG programs, $41,292,727 went to the State Program and $96,173,347 was distributed through the Entitlement Program. Forty-five communities in Ohio were eligible for the Entitlement Program. The breakdown of expenditures of the State Program funds is as follows:

  • 55% for Public Facilities and Improvements
  • 20% for Housing
  • 14% for General Administration/Planning
  • 7.5% for Economic Development
  • 2% for Public Services

According to the State of Ohio’s 2014 Accomplishment Report submitted to HUD, state program funds benefitted an estimated 885,599 individuals through the various projects funded by CDBGs. One of these state projects took place in Preble County, which assisted the Village of Lewisburg in a revitalization of its downtown district. The funds helped repair building facades, install decorative brick pavers, decorative planters, sidewalks, etc. In Miami County, state CDBG funds were utilized in a critical infrastructure project. CDBG funds allowed Bradford Village to replace 1,250 feet of water lines as well as to install 3 fire hydrants. The project benefited the entire village.

While total CDBG disbursement has decreased every year since 2002, it may now be completely eliminated. President Trump’s proposed 2018 Budget requests a $6.2 billion or 13.2 percent decrease in discretionary funding for HUD from 2017 levels and a complete elimination of the CDBG program. The blueprint claims the program “is not well-targeted to the poorest populations and has not demonstrated results” and aims to redistribute the funds to other activities.  The CDBG remains a valuable source of flexible funding for community development, and there is no obvious replacement source for cash-strapped communities.  Federal lawmakers need to carefully consider the merit of the program before making any changes.

For more detailed information on the CDBG program visit the HUD Exchange.

 

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