The Community Development Block Grant (CDBG), one of the longest-running programs of the U.S. Department of Housing and Urban Development, funds local community development activities with the stated goal of providing affordable housing, anti-poverty programs, and infrastructure development. CDBG, like other block grant programs, differ from categorical grants, made for specific purposes, in that they are subject to less federal oversight and are largely used at the discretion of the state and local governments and their subgrantees.
History
The CDBG program was enacted in 1974 by President Gerald Ford through the Housing and Community Development Act of 1974 and took effect in January 1975. Most directly, the law was a response to the Nixon administration's 1973 funding moratorium on many Department of Housing and Urban Development (HUD) programs.
President Ford emphasized the bill's potential for reducing inefficient bureaucracy, as the grant replaced seven previous programs that were "too fragmented to provide comprehensive solutions to complex local needs". He also noted its potential for improving government effectiveness by "replacing Federal judgments on local development with the judgments of the people who live and work there": placing more decision-making power on local funding choices in the hands of local governments who "are most familiar with local needs". The CDBG was presented as explicitly meant to "redistribute influence from the federal bureaucracies to local governments" - in Ford's words, to "return power from the banks of the Potomac to people in their own communities".
It had bipartisan support, reportedly because liberal legislators shared its goal of extinguishing poverty and "urban blight" and conservative legislators appreciated the control the program placed in the hands of private investors and the reduction it made in the role of the United States government. Decentralizing control over community development appealed to some Democrats because the central administration of previous programs meant benefits often did not reach the targeted low-income communities, while Republicans appreciated that the program was represented as meant to "limit the powers of the federal bureaucracy", a political and ideological presentation reflective of "growing public resentment of big government and big bureaucracy".
The law ultimately passed both houses with large bipartisan majorities.
Later Congressional changes created additional small CDBG set-asides that fund programs in minority-serving universities (Section 107), in US territories such as Guam, and for large-scale rehabilitation loans (Section 108).
Allocation of funds
CDBG funds are allocated on a formula basis.
Upon reauthorizing CDBG in 1978, Congress instituted a dual formula to strengthen controls on how money was spent and to better serve communities with different types of problems. A city's proportion of the overall CDBG allocation is either the average of the area's fractions of the US's total population, total poverty and total amount of housing overcrowding, or the average of the area's fractions of the country's total growth lag, total poverty, and total age of housing. Formula A typically benefits rapidly growing cities with high poverty that lack affordable housing. Formula B tends to benefit cities with large shares of old housing and low growth, including many affluent suburbs.
HUD calculates both formulas for all entitlement grantees and awards the larger amount, but Congressional appropriation has ultimate determination on program funding. These formulas have become less well matched to community need over time, and improvements or revisions have been proposed by several analytical reports.