Cushing N. Dolbeare convened the Ad Hoc Low Income Housing Coalition in 1974 at a time of great change in HUD programs. One important outcome of that era was the creation of the Community Development Block Grant (CDBG) program in the Housing and Community Development Act of 1974. The act eliminated seven categorical HUD programs, programs for which cities had to apply to HUD in order to secure funding. The programs were: Urban Renewal, Model Cities, Water and Sewer Grants, Neighborhood Facilities Grants, Public Facilities Loans, Open Space-Urban Beautification-Historic Preservation Grants, and Rehabilitation Loans. In place of those programs, CDBG would allocate funds by formula to states, to cities with a minimum population of 50,000, and to counties with a minimum population of 200,000.
CDBG is a product of compromises hammered out between the Republican Administration and the Democratic Senate and House. It is rooted in the philosophy of President Richard Nixon that sought to transfer decision-making from the federal government to state and local governments, the so-called “New Federalism.”
Flowing from New Federalism was the more specific notion of “Special Revenue Sharing,” which proposed to consolidate several existing programs such as Urban Renewal and Model Cities, replace categorical grants with formula allocations, and give local governments much greater decision-making authority over how funds would be used. Eventually, the New Federalism/Special Revenue Sharing principles were introduced by the Nixon Administration as the Better Communities Act (BCA) in 1973. Early in 1974, President Nixon suspended funding for the seven categorical grants in order to pressure Congress to act.
The Senate Committee on Banking, Housing, and Urban Affairs objected to the BCA’s use of a formula to allocate funds, as well its shift in decision-making to localities without a link to federal policy goals. The junior Senator from Delaware, Joseph Biden, expressed concern that housing for low income people and minorities would not fare well with local politicians. Consequently, Senator Robert Taft, Jr. (R-OH) proposed requiring 80% of the funds directly benefit low and moderate income people.
Another concern was the inclusion of urban counties in the formula distribution. Advocates worried that the “no strings attached” special revenue sharing aspect of the BCA would reduce funding that benefited low income and minority populations who primarily lived in center cities. A compromise in the Housing and Community Development Act required all jurisdictions to certify that “maximum feasible priority” would be given to the use of funds to benefit lower income people or eliminate blight. The act was signed into law on August 22, 1974 by President Gerald Ford, the first bill he signed after taking office when President Nixon resigned in the wake of the Watergate scandal.
NLIHC will mark its 40th anniversary throughout 2014, culminating in commemorative event on Monday, November 17 in Washington, DC. Please save the date.