Community Development Block Grants (CDBGs)

Evidence Rating  
Some Evidence
Evidence rating: Some Evidence

Strategies with this rating are likely to work, but further research is needed to confirm effects. These strategies have been tested more than once and results trend positive overall.

Health Factors  
Community in Action

The US Department of Housing and Urban Development’s (US HUD’s) Community Development Block Grants (CDBGs) fund local community development activities such as affordable housing, anti-poverty programs, and infrastructure development. Federal CDBG funds are provided directly to designated entitlement communities, which include central cities of Metropolitan Statistical Areas (MSAs), cities with populations of at least 50,000, and qualified urban counties with populations of 200,000 or more. States also receive federal funds to distribute to their smaller towns and rural counties. Funds must be used to benefit people with low incomes, prevent or eliminate slums and blight, or meet emergency needs1, 2, 3. Communities affected by major natural disasters may receive CDBG funds through special congressional appropriations4.

Expected Beneficial Outcomes (Rated)

  • Improved housing conditions
  • Increased housing stability
  • Improved neighborhood quality

Evidence of Effectiveness

There is some evidence that Community Development Block Grants (CDBGs) improve housing quality, housing stability, and neighborhood quality in urban areas with high poverty rates2, 5, 6. Additional evidence is needed to confirm effects and determine which approaches are most effective7.

In many cities, CDBGs have been associated with improvements in neighborhood quality indicators including home purchase mortgage approval rates, median amount of home purchase loans, and number of businesses in a neighborhood, especially when expenditures are concentrated in targeted areas5. In neighborhoods with highly concentrated poverty, higher CDBG spending appears to improve neighborhood quality more than lower levels of spending5. CDBG support may also encourage neighborhood homeowners to invest in their own properties, improving real estate markets over time2, 8.

Some evaluations suggest that CDBGs could be adjusted to better benefit communities with the lowest incomes, factoring in local capacity for community development2, 7, 8, 9.

CDBGs that stabilize or increase property values, reduce blight, and increase community wealth and resources may help reduce the racial wealth divide. A significant part of the racial wealth divide at all income levels relates to lower homeownership rates and lower home values for people of color10, 11, 12. Residential segregation increases racial disparities in housing stability, homeownership, and property values10. Structural racism in the housing market has created undervalued, marginalized neighborhoods with deficient housing and severe blight, including vacant lots and abandoned properties, along with under-resourced, lower quality schools, fewer job opportunities, limited services, inadequate food supplies, and neglected public infrastructure10. CDBGs and other place-based housing programs should be implemented carefully with an awareness of race, gender, and equity issues to support positive community development without causing displacement and gentrification. CDBGs can be used to support neighborhoods with mixed incomes and mobility opportunities to reduce concentrated poverty and promote equitable growth in marginalized neighborhoods13.

Equity Analysis

Potential to decrease disparities: Supported by some evidence

There is some evidence that Community Development Block Grants (CDBGs) reduce disparities in neighborhood quality and housing stability between urban communities with high and low incomes2, 5. Specifically, higher CDBG spending per resident living in poverty is associated with increases in the number of businesses and mortgage approval rates in urban communities5. More research is needed to confirm how CDBGs impact disparities in community development.

CDBGs are recommended to help reduce disparities in well-being between neighborhoods20. The Community Development Block Grant CARES Act (CDBG-CV) program focuses on improving equity in response to the disproportionate impact of the COVID-19 pandemic on the health conditions of communities composed of people of color with lower incomes21. However, CDBG funds are not always used equitably, and in some cases, there have been funding misallocations that result in greater benefits to residents with higher incomes than those with lower incomes22. Experts suggest that program funds should be allocated with greater consideration for who benefits the most22.

Historical Context

By the 1960s, disinvestment in both urban neighborhoods and rural areas had left them suffering from poverty, and both were often highly segregated23. Discriminatory housing, lending, and exclusionary zoning policies in the era of Jim Crow and government-sanctioned segregation led to the redlining practices of the Federal Housing Administration (FHA) and concentrated poverty. Redlining entrenched residential segregation, denying people of color access to government-insured mortgages and making the homes in the neighborhoods where they lived uninsurable12, while the Interstate Transportation Act financed highways that destroyed inner city neighborhoods in the 1950s and 1960s23.

Community development efforts emerged as part of the Civil Rights movement23 and the War on Poverty in the 1960s, moving from that era’s large, centralized urban renewal projects (epitomized by ill-fated public housing projects) to broader networks of mostly non-profit organizations addressing the need for affordable housing24. Community Development Block Grants (CDBGs) were created by the Housing and Community Development Act of 1974; at the time, the federal government prioritized efforts to reduce segregation, poverty, and disadvantage. CDBGs are intended to develop viable urban communities by funding housing and neighborhood improvement activities that benefit residents with low and moderate incomes1, 25. Overtime, CDBG regulations were revised to increase flexibility for grantees and make it easier for the funds to be used for economic development, such as Community Development Financial Institutions (CDFIs) and microenterprise activities26. Yet, the average grant amount for CDBG entitlement communities declined from 2000 to 2014; less funding was available, even as the number of entitlement communities increased27.

Equity Considerations

  • What is the community’s role in prioritizing how Community Development Block Grant (CDBG) funds are invested? What could be funded to improve neighborhood infrastructure and increase equity?
  • Are CDBG funds allocated to and used by communities and families with the greatest needs and disadvantages?
  • How are you evaluating the effectiveness of CDBG investments on advancing equity? How are the evaluation results used to improve the effectiveness of CDBGs?

Implementation Examples

Community Development Block Grants (CDBGs) are available in all 50 states14. US Department of Housing and Urban Development (US HUD) allocations to entitlement communities are available by state, community, or organization on the US HUD website15. From 2005-2013, CDBGs created or maintained over 330,500 jobs and assisted more than 1.1 million people with homeownership and home improvements1.

Many communities and public agencies provide information for grant applications and previously funded project records on their websites, such as Indiana’s Office of Community and Rural Affairs; the city of Port Arthur, TX; and the county of Summit, Ohio16, 17, 18.

In 2020, Congress allocated $5 billion of the Coronavirus Aid, Relief, and Economic Security (CARES) Act to the CDBG program for state and local governments to then distribute to communities as part of COVID-19 pandemic response efforts19.

Implementation Resources

NLIHC-Advocates Guide 2022 - National Low Income Housing Coalition (NLIHC). Advocates' guide '22: A primer on federal affordable housing & community development programs. 2022.

US HUD-CDBG - US Department of Housing and Urban Development (US HUD). Community Development Block Grant program (CDBG).

US HUD-CDBG Toolkit - US Department of Housing and Urban Development (US HUD). Community Development Block Grant (CDBG) crosscutting issues toolkit.

SC-CDBG - South Carolina Department of Commerce. South Carolina Community Development Block Grant (CDBG) program.

LHS-COVID-19 response - Local Housing Solutions (LHS). Housing issues: COVID-19. New York University, Furman Center and Abt Associates, Inc.

US HUD-CDBG-CV - US Department of Housing and Urban Development (US HUD), HUD Exchange. CDBG-CV program.

Footnotes

* Journal subscription may be required for access.

1 Urban-Theodos 2017 - Theodos B, Stacy CP, Ho H. Taking Stock of the Community Development Block Grant. Washington, DC: Urban Institute; 2017.

2 Rohe 2014* - Rohe WM, Galster GC. The Community Development Block Grant program turns 40: Proposals for program expansion and reform. Housing Policy Debate. 2014;24(1):3-13.

3 US HUD-CDBG - US Department of Housing and Urban Development (US HUD). Community Development Block Grant program (CDBG).

4 US HUD-CDBG-DR - US Department of Housing and Urban Development (US HUD). Community Development Block Grant disaster recovery. 2021.

5 Galster 2005* - Galster G, Walker C, Hayes C, Boxall P, Johnson J. Measuring the impact of Community Development Block Grant spending on urban neighborhoods. Housing Policy Debate. 2005;15(4):903-934.

6 Urban-Walker 1994 - Walker C, Dommel P, Hatry HP, Bogdon A, Boxall P. Federal funds, local choices: An evaluation of the Community Development Block Grant Program. Washington, DC: Urban Institute; 1994.

7 Collinson 2014* - Collinson RA. Assessing the allocation of CDBG to community development need. Housing Policy Debate. 2014;24(1):91-118.

8 Pooley 2014* - Pooley KB. Using Community Development Block Grant dollars to revitalize neighborhoods: The impact of program spending in Philadelphia. Housing Policy Debate. 2014;24(1):172-191.

9 Rich 2014* - Rich MJ. Community Development Block Grants at 40: Time for a makeover. Housing Policy Debate. 2014;24(1):46-90.

10 PRRAC-Haberle 2021 - Haberle M, House S, eds. Racial justice in housing finance: A series on new directions. Washington, DC: Poverty & Race Research Action Council (PRRAC); 2021.

11 Urban-McCargo 2020 - McCargo A, Choi JH. Closing the gaps: Building black wealth through homeownership. Washington, DC: Urban Institute; 2020.

12 Kaplan 2007* - Kaplan J, Valls A. Housing discrimination as a basis for Black reparations. Public Affairs Quarterly. 2007;21(3):255-273.

13 Urban-Andrews 2019 - Andrews N. Race, gender, and equity in community development: Ten findings, six ways forward. Washington, DC: Urban Institute; 2019.

14 US HUD-CDBG profiles - US Department of Housing and Urban Development (US HUD). Community Development Block Grant (CDBG) performance profiles.

15 US HUD-CDBG grantees - US Department of Housing and Urban Development (US HUD), HUD Exchange. About grantees: View Community Development Block Grant (CDBG) grantees by location or organization.

16 IN OCRA-CDBG - Indiana Office of Community and Rural Affairs (IN OCRA). Community Development Block Grants (CDBG).

17 Port Arthur-CDBG - City of Port Arthur, Texas. Community Development Block Grants (CDBG).

18 Summit OH-CDBG - Summit County, OH. Community Development Block Grants (CDBG).

19 US HUD-CDBG-CV - US Department of Housing and Urban Development (US HUD), HUD Exchange. CDBG-CV program.

20 Urban-Congdon 2021a - Congdon W, Simms M, De Vita C. Assessing the impact of community-level initiatives. Washington, DC: Urban Institute; 2021.

21 Deslatte 2020 - Deslatte A, Hatch ME, Stokan E. How can local governments address pandemic inequities? Public Administration Review. 2020;80(5):827-831.

22 CATO-Calder 2019 - Calder VB. Community Development Block Grant spending is poorly targeted to poor. Washington, DC: Cato Institute; 2019.

23 Zdenek 2017 - Zdenek RO, Walsh D. Navigating community development: Harnessing comparative advantages to create strategic partnerships. New York: Palgrave Macmillan; 2017.

24 PPB-Jutte 2019 - Jutte D. The role of community development as a partner in health. In: Michener JL, Castrucci BC, Bradley DW, et al., eds. The practical playbook II: Building multisector partnerships that work. Durham, NC: Duke Family Medicine & Community Health, de Beaumont Foundation, and Centers for Disease Control and Prevention (CDC); 2019.

25 CRS-Jaroscak 2021 - Jaroscak JV. Flexible federal funding: Examining the Community Development Block Grant program and its impact on addressing local challenges. Congressional Research Service (CRS) TE10065; 2021.

26 US HUD-CDBG 2014 - US Department of Housing and Urban Development (US HUD), HUD Exchange. Basically CDBG for entitlements. 2014.

27 CRS-Boyd 2014 - Boyd E. Community Development Block Grants: Recent funding history. Congressional Research Service (CRS) R43394; 2014.

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