The Impact of CDBG Spending on Urban Neighborhoods
(October 2002, 105 p.)
The largest of HUD's formula block grant programs, with
an annual appropriation of approximately $5 billion, the Community
Development Block Grant (CDBG) program is administered by
more than 1,000 metropolitan cities and urban counties and
50 State governments, which have great discretion in how they
spend their funds.
This study examines whether readily available data sources
can be used to track the outcomes of activities funded with
CDBG. The study concludes that two readily available data
elements median home loan amount and the number of
businesses-hold some promise as tools for helping local communities
measure the effects of concentrated CDBG expenditures, but
that additional research is needed to verify the utility and
clarify the limitations of this methodology. The study is
likely to be of greatest interest to researchers and local
communities interested in measuring the impact of concentrated
CDBG (and other community development) investments at the
neighborhood level.
Given the local flexibility afforded States and local governments
under formula block grants such as CDBG, the impacts of such
programs are difficult to measure, particularly at the national
programmatic level. Different performance measures might be
needed for different types of investments. Other factors complicating
measurement of the effects of CDBG expenditures include the
strong effects of such external factors as the economy and
interest rates and the fact that neighborhoods are also affected
by significant investments of non-CDBG funds.
The analysis presented in this study is a good first step
in identifying a relationship between CDBG spending and measurable
improvements in neighborhood quality, but this initial work
does not support the use of this methodology as the basis
for a national performance measure applicable to all CDBG
programs. Even as HUD continues to refine its research in
this area, the measures developed here may be useful to local
communities interested in assessing their own community development
performance and in furthering their understanding of the neighborhood
effects of past CDBG investments.
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