Community Development Block Grant

Program Summary and Purpose:

After 51,681 New Orleans rental homes were either damaged or destroyed by Hurricane Katrina, developers had little incentive to redevelop the area. However, with the help of the Community Development Block Grant Program, entrepreneurs were able to finance the development of multiple mixed-income housing units within a long-neglected neighborhood. In a New York Times letter to the editor, the Executive Director of the Louisiana Recovery Authority wrote, “Absent the strategic layering of block grant financing along with the tax credits, these exciting developments would not even be under consideration.”

Since 1974, the Community Development Block Grant Program has played a vital role in improving the housing, living environments, and economic opportunities available to persons with low and moderate incomes. The program achieves their goals through the dispersion of grants to governmental jurisdictions. CDBG funds are used to fund a wide range of activities, including physical rehabilitation of properties, construction of new housing or rental property, public services, and help for first-time homebuyers. In coordination with the CDBG’s goals, grants are distributed based factors relating to a jurisdiction’s poverty level and housing conditions.

Current Status:

Entitlement districts are either cities with populations above 50,000 or counties with populations above 200,000 that are automatically eligible for 70% of CDBG’s funds. The remaining 30% of funding is given to states for distribution to smaller jurisdictions. Minnesota has 11 Entitlement Cities and 6 Entitlement Counties. As with most housing programs, funding is a perennial issue. The CDGB Program currently has a budget of $3.990 billion, though advocates would like to see this amount increased. There have also been suggestions at revisions to CDGB funds to better target individuals of lower incomes, though no legislative changes have been introduced.

What Advocates Need to Know:

Public Participation, with an emphasis on communication with individuals of low and moderate incomes, is a pillar of the CDBG Program. Jurisdictions are required to hold public forums at all stages of the process to assess community needs and develop strategies for distribution and use of CDBG funds.

For More Information:

CDBG Summary by the Department of Housing and Urban Development