CDBG Formula Targeting to Community Development
Need (February 2005, 208 p)
The primary objective of the CDBG program is the development
of viable urban communities, by providing decent housing,
suitable living environments, and expanded economic opportunities,
principally for low- and moderate-income persons. To divide
the annual appropriation of CDBG funds among jurisdictions,
Congress has designed a formula that seeks to provide larger
grants to communities with relatively high community development
need and smaller grants to communities with relatively low
community development need. The core formula variables in
the allocation formula have not been changed since 1978. This
report provides the latest assessment of how well the variables
being used in the CDBG formula continue to target funds toward
community development need. It shows that the formula does
generally continue to target to need, but that targeting toward
community development need has declined substantially over
the past 26 years. Over time, an increasing number of jurisdictions
with similar need have come to receive substantially different
grants. In addition, the amount of funds going to the most
needy grantees on a per capita basis has decreased, while
the amount of funds going to the least needy grantees on a
per capita basis has increased.
This report offers four alternative formulas that would substantially
improve targeting to community development need. Each provides
trade-offs in terms of formula simplicity, the amount of funds
reallocated, and the type of community development need to
be accorded the highest priority. It’s important to
recognize that any change to the existing formula that improves
targeting to need will result in a significant redistribution
of funds. Nonetheless, the Department hopes that serious attention
will be given to the alternatives presented in this report.
We look forward to working with Congress, CDBG grantees, and
other stakeholders to discuss alternatives to the current
formula.
|
| 
