Virtual Hearing - Flexible Federal Funding: Examining the Community Development... (EventID=112789)

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On Wednesday, June 16, 2021, at 10:00 a.m. (ET) Housing, Community Development, and Insurance Subcommittee Chairman Cleaver and Ranking Member Hill will host a virtual hearing entitled, “Flexible Federal Funding: Examining the Community Development Block Grant Program and Its Impact on Addressing Local Challenges."

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Witnesses for this one-panel hearing will be:

• Joseph Jaroscak, Analyst in Economic Development Policy, Congressional Research Service

• George Mensah, Director, Department of Housing and Community Development of the City of Miami, Florida

• London Breed, Mayor, Mayor of the City and County of San Francisco, California

• Kimberly Robinson, Executive Director, Pioneer Valley Planning Commission

• Salim Furth, Ph.D., Senior Research Fellow, Mercatus Center at George Mason University


Overview

Originally authorized under Title I of the Housing and Community Development Act of 19741 and administered by the Department of Housing and Urban Development (HUD), the Community Development Block Grant Program (CDBG) was primarily created to invest in and develop viable communities that provide suitable living environments and economic opportunities for persons of low and moderate incomes. CDBG gives eligible grantees, which include states, cities, territories, and counties, the discretion to make locally informed and place-based decisions, and to use funds towards development projects and programs within specific activity categories. CDBG has been a reliable funding source for many granteesto ensure that individuals and families receive access to safe housing and services to support their growth and personal goals.

As a condition of receiving funding, CDBG’s authorizing statute requires state and local governments to certify that the proposed CDBG activities meet one of the program’s three national objectives. Eligible activities must: 1) benefit low- and moderate-income (LMI) persons; 2) aid in the prevention or elimination of slums or blight; or 3) meet a need having a particular urgency. The objective to deploy funds for the benefit of LMI persons is often considered the “primary” national objective because statute requires that recipients of CDBG funds expend 70% of their funds to meet this objective.

Recipients of CDBG funds must develop a consolidated plan, which includes the needs, resources, priorities, and proposed activities to be undertaken with CDBG funds. The consolidated plan process is designed to assist states and local jurisdictions in assessing market conditions and community development, and housing needs and to promote data-driven, place-based investment decisions. A grantee’s consolidated plan process must include a citizen participation plan, a housing needs assessment, and a community development plan. In addition, grant recipients must also submit an annual performance report detailing progress toward consolidated plan goals and activities in the prior year.

CDBG received its largest appropriation, $5.06 billion, in fiscal year (FY) 2002, but Congress has cut the program funding in subsequent years;specifically, the program’s overall funding level was reduced by almost 39% between 2010 and 2017. Since 2018, Congress has increased or level-funded the program, and in FY2021, Congress provided $3.44 billion for the program.

CDBG Program Design

The CDBG statute requires HUD to target funds to community development need, which it identifies as “poverty, neighborhood blight, deteriorated housing, physical and economic distress, decline, suitability of one’s living environment, and isolation of income groups,” among other factor. CDBG uses two separate formula processes to allocate funding to grantees. After setting aside funds for special purposes and projects specified by Congress, 70% of the total funds are allocated to entitlement communities, including insular areas. The eligible entitlement community grantees of the CDBG program include: principal cities of Metropolitan statistical Areas (MSAs); other metropolitan cities with populations of at least 50,000; and qualified urban counties with populations of at least 200,000 (excluding the population of entitled cities). The remaining 30% of funds are allocated to States and Puerto Rico. States disburse their allocations to units of local government that are not eligible to receive funds directly from HUD in accordance with methods developed by the state. Hawaii is the only state to have elected not to participate in the administration...

Program flexibility

One of CDBG’s most attractive features is its flexibility in how grantees can use their funding.....

Hearing page: https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=407954