March 7, 2005

Community Development Block Grants

The Governors strongly support the Community Development Block Grant program. CDBG helps states and local jurisdictions tackle their most serious community development challenges, including public works and infrastructure, decent and affordable housing, public services, and economic development. The CDBG program annually creates more than 78,800 jobs and rehabilitates nearly 159,000 housing units. The hallmark of the CDBG program is its flexibility. This important block grant program allows state and local governments to choose programming to address their specific needs. States use the CDBG program for housing for rural areas in increasing proportions. In fiscal 2004, states used more than $225 million — or 16 percent of state CDBG expenditures — directly for housing, mostly to rehabilitate seriously substandard housing for low- and moderate-income homeowners. Over the past three years, these activities have garnered an increasing percentage of state CDBG dollars. In addition, more than $500 million was used by states for public facilities such as water, sewer, and roads to mostly support new and existing residential areas allowing other housing programs to do their work. Governors support maximum feasible deference and flexibility for states in CDBG programming and administration.

se activities have garnered an increasing percentage of state CDBG dollars. In addition, more than $500 million was used by states for public facilities such as water, sewer, and roads to mostly support new and existing residential areas allowing other housing programs to do their work. Governors support maximum feasible deference and flexibility for states in CDBG programming and administration.

The availability of CDBG funds is an essential component of efforts by the states to leverage additional resources from their own sources and other public and private sources. It is important that CDBG maintain its focus on developing and sustaining affordable housing and livable communities. In addition, maintaining the current funding levels and the current allocation balance between entitlement and nonentitlement communities is necessary to ensure that, in particular, the nation's rural areas and smaller municipalities continue to have reliable partners for their efforts to address locally identified needs.

States have administered the CDBG program for more than 20 years, yet administrative fees used to run the program have never been adjusted. During this time, there has been a significant increase in the number of program requirements. To administer the program properly, states now require an improved administrative fees structure comparable to state administration of other HUD programs.