By Elena Temple
March 20, 2006

Leaders from five national organizations – The United States Conference of Mayors (Conference of Mayors), the National League of Cities (NLC), the National Association of Counties (NACo), National Association of Housing and Redevelopment Officials (NAHRO), and Local Initiatives Support Corporation (LISC) – along with the Real Estate Roundtable held a press conference at the National Press Club March 15 to release the results of a national survey that shows the devastating economic impact of recent cuts to the Community Development Block Grant (CDBG) program on the America’s communities.

These organizations are a part of a larger coalition of 20 national organizations that all support the 30-year old CDBG program, and are committed to keeping the program intact.

Designed by NAHRO at the request of the coalition, the survey entitled Consequences for American Communities specifically highlights the impact of FY ’06 federal cuts to the program and raises awareness of the ‘real-world’ effect of these cuts. Though the CDBG program is acknowledged by the current Administration as successful, coalition members believe recent funding reductions represent a consistent chipping away of the program toward its complete elimination.

According to the survey, more than five million low- and moderate-income Americans will see significant reductions in a range of services provided to them as a result of two years of cuts to CDBG. The survey also found that hundreds of thousands of senior citizens, children, persons with special needs and the homeless would lose programs that directly benefit them. Everything from housing rehabilitation and homebuyer assistance programs to job creation and projects to reduce environmental contamination and to construct fire and public safety facilities will be negatively affected.

“The results of the survey suggest that the 14 percent reduction in formula funding for CDBG over the last two fiscal years has had a substantial, negative effect on the collective ability of states, cities, and counties to serve Americans in need, promote homeownership, grow local economies, and strengthen the nation’s infrastructure,” said Montez Martin, NAHRO’s Vice President of Community Revitalization and Development.

Following the Administration’s latest move to reduce CDBG funding by an additional 25 percent, the coalition launched a Congressional effort to restore CDBG to its full formula funding for Fiscal Year 2007. While the survey is not a direct response to the President’s Fiscal Year 2007 budget proposal, its findings will assist the coalition and members of Congress as they work to restore CDBG formula funding for Fiscal Year 2007.

“As we did last year, this coalition of national organizations is taking our fight to preserve the CDBG program to Capitol Hill. Because this program benefits so many communities in every part of our country, we expect that the bi-partisan support we saw in Congress last year for CDBG remains in both houses of Congress,” said Akron (OH) Mayor Donald L. Plusquellic, immediate past-president of the Conference of Mayors.

Clarksburg (WV) Councilman James C. Hunt, NLC President, agreed. “On CDBG, our message is united: this program is too precious – too important to us as a critical tool to revitalize and preserve the quality of life for our citizens. We cannot let the Congress try and balance the budget on the backs of our local communities. … At the end of the day, we have to make sure that our cities and towns have $4.3 billion for CDBG at HUD for FY 07,” Hunt stated.

Survey respondents cover thirty-four states and 317 communities, representing approximately 50 percent of all CDBG formula grants for FY 2006. Highlights include:

• Five million low- and moderate-income people no longer have access to programs funded through CDBG, including 256,000 elderly, 391,000 children and young people, 253,000 people with special needs, and 196,000 homeless.

• 50,000 households will no longer be assisted through housing rehabilitation programs, including 5,200 elderly.

• 5,600 fewer businesses, including minority-owned businesses, will lose support and the potential for 15,000 new jobs will be lost.

• 158 new water and sewer projects serving 120,000 people would be canceled or delayed, with another 30 or more involving sites suspected with environmental contamination postponed.

• 303 new projects for street improvements will be canceled or delayed, and 127 projects to build community and neighborhood centers for seniors, youth, children, and the disabled and handicapped will be canceled or delayed, along with 208 new parks and recreational projects and 26 new fire stations and purchases of fire equipment.

The results underscore what mayors and local officials already know.

“CDBG funds are critical for us at the county level. They not only help us serve our less fortunate citizens, but they allow us to address various quality of life, public safety, and economic development issues specific to our individual communities,” said National Association of Counties President-Elect Colleen Landkamer, Blue Earth County (MN) Commissioner.

Further illustrating how invaluable the program is to local officials, CDBG dollars are often used to leverage private funding to bring jobs and a fresh start to many blighted communities.

“Community Development Block Grants are indispensable to rebuilding low-income rural and urban communities,” said Michael Rubinger, President and CEO of Local Initiatives Support Corporation (LISC). “CDBG’s flexibility allows locally based non-profits to attract private investment in economic development, affordable housing, and community facilities,” he added.

Roger Platt, Senior Vice President and Counsel for the Real Estate Roundtable, said that business wholeheartedly supports the CDBG program. “CDBG funds are critical to attracting private capital and building public-private partnerships for brownfields and other important development projects. These partnerships combine very different, but complementary, strengths of the business community and the public sector to ensure seed money from the CDBG program is leveraged to produce maximum benefit to local communities, including affordable housing,” he stated.

Members of the CDBG Coalition include: American Federation of State County Municipal Employees, Council of State Community Development Agencies, Enterprise, Habitat for Humanity International, Housing Assistance Council, International Economic Development Council, Local Initiatives Support Corporation, National Association for County Community and Economic Development, National Association of Counties, National Association of Development Organizations, National Association of Housing and Redevelopment Officials, National Association of Local Housing Finance Agencies, National Community Development Association, National Conference of Black Mayors, National Housing Conference, National League of Cities, National Low Income Housing Coalition, National NeighborWorks Association, National Rural Housing Coalition, and The United States Conference of Mayors.

The entire survey is available online here.