Community Development Block Grant

The Community Development Block Grant (CDBG) program, created through the Housing & Community Development Act of 1974, is one of the longest running community revitalization programs in the United States. Its passage represented an important shift in federal community development funding by turning eight competitive, categorical grants targeted to specific projects into a single block grant allocated by formula to states and eligible local jurisdictions to fund a broad range of activities. Compared to its predecessors—urban renewal; Model Cities; Open Space, urban beautification, and Historic Preservation Grants; public facility loans; and water and sewer, and neighborhood facilities grants—CDBG is a more flexible program that allows state and local governments to address their recurring housing needs, as well as to respond quickly to emergent situations and disasters. While its goals, objectives, and eligible activities have remained relatively stable over the years, planning, reporting, and public participation requirements have changed over time. Differences in local program targeting and context make measuring outcomes and impacts difficult. While the CDBG program remains a politically popular means of federal revenue sharing with state and local governments, challenges continue. The goal of the CDBG program is to support viable urban communities by providing decent housing, a suitable living environment, and expanding economic opportunities, principally for persons of low and moderate income. Its national objectives are to eliminate or prevent slums or blight in a manner that particularly benefits low- and moderate-income households and addresses urgent needs posing an immediate threat to the health or welfare of the community for which other funds are not available. The program is administered by the U.S. Department of Housing and Urban Development (HUD) and funds activities in three major areas relevant to its goals and objectives: housing, economic development, and public services and infrastructure.

Approximately $4 billion in CDBG funds are allocated annually to over 1,200 jurisdictions, including all 50 states, central cities within metropolitan statistical areas, other cities with populations over 50,000, urban counties with populations over 200,000, Puerto Rico, and other U.S. territories. Eligible jurisdictions are also able to keep program income earned through CDBG activities. Since 1981, 70% of annual funds have been allocated to entitlement communities—cities and urban counties that meet the population thresholds—with the remaining 30% given to states to allocate to smaller nonentitlement communities through the Small Cities program. Texas, Arizona, California, and New Mexico must set aside up to 10% of their allocation for targeted improvements in colonias, or residential communities, in the U.S.-Mexico border regions, which often lack potable water, adequate sewage systems, and decent, safe, and sanitary housing. Hawaii is the only state that does not directly administer Small Cities’ funds for nonentitlement communities.