By Jenna Thomas and Jack Brancatelli, Cleveland Documenters
In this video, Cleveland Documenters Jenna Thomas and Jack Brancatelli rundown the history of Community Development Block Grants.
What are Community Development Block Grants?
Community Development Block Grants (CDBGs) are part of a federal assistance program that aims to build stronger and more resilient communities by providing flexible money to local governments. Cities become eligible if they meet certain requirements.
History of Community Development Block Grants
In 1973, President Richard Nixon cut funding for the U.S. Department of Housing and Urban Development (HUD) and its competitive grant programs that intended to improve housing conditions, city services and public facilities to make more liveable cities. Prior to this cut, the federal program included categories such as housing rehabilitation, historic preservation, and water and sewer infrastructure.
The loss had a huge impact on cities and counties with low-income residents who relied on this funding. The Housing and Community Development Act of 1974, passed by Congress, revamped the program, adding flexibility and giving power to cities to decide how best to spend the money.
Where does the money go?
Community development is a huge umbrella, so the federal government created a range of activities for spending the grant money, including:
- Housing demolition and rehabilitation
- Storefront renovation
- Public services for residents, such as the Senior Homeowner Assistance Program and Clean Cleveland
- General administrative costs, such as staffing in the city’s Department of Community Development
- Community Development Corporations (CDCs) Note: Cleveland is unique in the nation for its funding of CDCs, which serve specific neighborhoods
Frequently Asked Questions
Why is it a separate budget?
The city’s General Fund collects taxes, fees and services. Since CDBG money comes from the federal government–not through city-generated revenue – it gets its own budget.
What can’t CDBG grants pay for?
General administration costs (outside of community development) such as public safety forces or routine city services.
How does the federal government decide who gets the money?
HUD uses two formulas to decide which cities get funding. The first formula takes into account the city’s population, rate of poverty, and number of overcrowded housing units. The other formula looks at population-growth lag since 1960, poverty and pre-1940 housing units.