Report Recommends Reforms to the Community Development Block Grant Program

A report by the Urban Institute’s Brett Theodos, Christina Plerhoples Stacy, and Helen Ho, Taking Stock of the Community Development Block Grant, indicates that Community Development Block Grant (CDBG) funding has declined by 80% in real dollars since its peak in 1979 from $15 billion to $3 billion (2016 dollars). President Trump’s 2018 budget proposal eliminates the program altogether. Critics contend that the program is ineffective and inefficient. Grantees, however, report that CDBG funding is essential to community and economic development. The authors recommend changes to improve the effectiveness of the CDBG program.

CDBG is a block grant distributed by HUD to entitlement communities that are cities and urban counties. CDBG gives entitlement communities flexibility in how they spend the money as long as a minimum of 70% of their grant funds benefit low income persons with incomes less than 80% of their area median income (AMI) and that no funds are used for new housing construction. Non-entitlement communities can receive funds through their state or HUD’s small cities program.

The number of entitlement communities has increased over time, while CDBG funding has decreased. The authors recommend improving the distribution formulae so that communities with greater need receive more funding. The authors recommend putting greater weight on concentrated poverty or children living poverty when determining the CDBG distribution. They also recommend putting less weight on the age of the housing stock in wealthy communities.

No reliable data exist on how well jurisdictions meet the requirement that 70% of funds benefit low income persons. The authors recommend increased monitoring of who CDBG funding benefits. They also recommend stronger requirements for targeting people with even lower incomes, such as those below 50% of AMI.

The authors recommend stronger efforts to facilitate peer learning among grantees and to improve technical assistance on data analysis, developing community development strategies, defining goals and outcomes, coordinating community development efforts, and engaging the public. The authors also recommend rewarding jurisdictions who use their funds effectively and collect better data to know where and how CDBG money is spent and its true impact. They also recommend qualitative data, such as on-the-ground observations, surveys, and interviews, to better understand how decisions are made regarding CDBG implementation. The authors contend these reforms would improve the effectiveness of the CDBG program.

Taking Stock of the Community Development Block Grant is available at: