“It’s purpose and relevancy in the New Millennia”

The CDBG Program “It’s purpose and relevancy in the New Millennia” A Policy Paper Presented By: NACCED Community Development Committee 2025 M Street, NW Suite 800 Washington, DC 20036 Mr. Nick Autorina – Chairman Cobb County, GA Ms. Cheryl Markham – Vice Chairman King County, WA

A Special Thank You NACEED’s Community Development Committee owes a special debt of gratitude to the following NACCED members who were gracious with their time and energy in providing statistics for this report. Without their help, this report would not be possible Allegheny County, PA Mr. Jack Exler Ms. Donna Joyce Ocean County, NJ Mr. Tony Agliata Anne Arundel County, MD Ms. Erin Shearman Karpewicz Cobb County, GA Ms. Diana Belanger NACCED Presentation V.2

“…HUD will put in place systemic reform and policy innovation, and harness private sector capital and talent as well as new kinds of partnership and collaboration to respond to the nation’s housing crisis, address new national priorities and change the way HUD does business.” -HUD Secretary Shaun Donovan’s opening remarks regarding HUD’s FY 2010 Budget to shift HUD’s focus on responsibility, effectiveness and transparency

Presentation Purpose: • Provide an Historical Overview; • Analyze the impact of CDBG regarding the program’s success and accomplishments assisting American cities and counties to preserve and sustain our communities; • Explain why the program – after 35 years – remains the cornerstone of federal urban policy; • Provide an overview of HUD’s strategic intent for CDBG in the future NACCED Presentation V.2

Original Legislative Intent “To develop viable urban communities, by providing decent housing and a suitable living environment and expanding economic opportunities, principally for persons of low and moderate income.” NACCED Presentation V.2

CDBG Statutory Requirements • Address the needs of low and moderate income persons, of which not less than 70% of all CDBG funds must benefit low-income persons; • Eliminate Slums and Blight; • Address urgent needs that pose an immediate threat to health, safety, and public welfare NACCED Presentation V.2

Inherent Flexibility • CDBG funds: • Enable communities to define and address their community needs at the local level under the governance of local elected officials; • Promote a viable funding source to revitalize and preserve older neighborhoods through strategic planning and implementation; • Can provide resources in time of urgent need NACCED Presentation V.2

Urgent Need • “9-11” • Congress appropriated $3.483 billion in CDBG funds to New York City to aid in the City’s recovery from a coordinated terrorist attack on the “Twin Towers” • “Hurricane Katrina” • December 2005-Congress appropriated $16.5 Billion in CDBG funds to address recovery efforts along the Gulf Coast after the destruction left by Hurricane’s Katrina, Rita and Wilma. NACCED Presentation V.2

Urgent Need • In 2008, HUD allocated $9.423 billion in CDBG funds for the following: • $6.123 billion to assist the victims of Hurricanes Ike; • $3 Billion for Gulf Coast Recovery; • $300 million for Midwest Flooding NACCED Presentation V.2

How Does HUD Allocate CDBG Funds? • CDBG funds are allocated by dual formulas, based on the following factors: • Population • Poverty • Overcrowded Housing • Aged Housing • Population growth lag NACCED Presentation V.2

Who Receives CDBG Funding? • Metropolitan Cities and Counties – 70% • Metro Cities – Populations that exceed 50,000 representing approximately 1,154 cities • Urban Counties – Populations that exceed 200,000 in 176 Counties, representing approximately 4,000 small cities • States – 30% • Approximately 5,000 small cities and towns receive funds through their state allocation NACCED Presentation V.2

Eligible CDBG Activities • As defined in 24 CFR 570 • Public Services • Projects Assisting “Limited Clientele” such as: • Abused Children • Battered Spouses • Elderly Persons • Homeless Persons • Illiterate Adults • Severely Disabled • Persons Living with AIDS NACCED Presentation V.2

Eligible CDBG Activities • As defined in 24 CFR 570 • Public Facilities • Acquisition of Land / or Buildings • Architectural Barrier Removal (ADA) • Construction of New Streets* • Construction or Renovation of Community Centers* • Construction or Renovation of Parks and Recreation Facilities* • New Sidewalks* • Property Acquisition / Disposition / Clearance / Demolition • Renovation of Historic Properties *Denotes work completed in LMI Service area NACCED Presentation V.2

Urban Counties • CDBG is designed to be a flexible funding mechanism to promote an intergovernmental, regional approach to urban community development and affordable housing strategies; • Counties represent multiple urban growth centers linked together geographically, politically, culturally and historically; • Funding decisions are based on cost effective, equitable regional planning efforts and an open citizen participation process. NACCED Presentation V.2

How do Urban Counties Allocate their CDBG funds? Through 2008, approximately176 Counties collectively received over $539 million through HUD for the CDBG Program. Counties used CDBG to primarily fund the following activities. Source: “HUD: Use of CDBG By Entitlement Communities” - 2008 NACCED Presentation V.2

NACCED Member Examples This presentation will highlight three current NACCED Members: Allegheny County, Pennsylvania Anne Arundel County, Maryland Ocean County, New Jersey 2008 Allocation: $2,083,194 2008 Allocation: $16,166,176 2008 Allocation: $1,383,405 NACCED Presentation V.2

Allegheny County’s Use of CDBG funds Versus National Trend 2008 Allegheny County Appropriations by Activity Type 2008 National Entitlement Trend by Activity Type NACCED Presentation V.2

Anne Arundel County’s Use of CDBG funds Versus National Trend 2008 Anne Arundel County Appropriations by Activity Type 2008 National Entitlement Trend by Activity Type NACCED Presentation V.2

Ocean County’s Use of CDBG funds Versus National Trend 2008 Ocean County Appropriations by Activity Type 2008 National Entitlement Trend by Activity Type NACCED Presentation V.2

Allegheny’s Funding Decline • From 2004 through 2008 , Allegheny County has experienced a 16.35% decrease in CDBG funding. 5 year high = $19,327,000 5 year low = $16,167,168 NACCED Presentation V.2

Anne Arundel’s Funding Decline • From 2004 through 2008, Anne Arundel County has experienced a 17.44% decrease in CDBG funding. 5 year high = $2,635,000 5 year low = $2,175,387 NACCED Presentation V.2

Ocean County’s Funding Decline • From 2004 to 2008, Ocean Countyhas experienced a 7.68% decrease in CDBG funding. 5 year high = $1,713,000 5 year low = $1,435,524 *2008 total includes $197,978 that was allocated to Jackson-which became its own entitlement NACCED Presentation V.2

CDBG Program Macro-Analysis • According to an analysis performed by Professor Stephen Fuller of George Mason University in 2001, the CDBG Program created: • 2 million jobs, and; • $50 billion in personal earnings from 1974 to 1998 • In 2008: • 31,723 jobs were created • 149,254 households received assistance • 4,521 became new homeowners • 18.6 million persons were served by new or reconstructed public facilities and infrastructure • 13.5 million people received assistance from CDBG-funded activities for employment training, battered and abused spouse services, transportation services, crime awareness activities, senior services, persons with disabilities and youth related activities • Grantees also leveraged $3 in private funding for every $1 dollar of CDBG dollars spent NACCED Presentation V.2

CDBG Program Macro-Analysis Source: “HUD-CDBG National Accomplishments Profile 2005 – 2008” NACCED Presentation V.2

Allegheny County Metrics2004 - 2008 NACCED Presentation V.2

Anne Arundel County Metrics2004 - 2008 NACCED Presentation V.2

Ocean County Metrics2004 - 2008 NACCED Presentation V.2

NACCED Member Summary • Regardless of the entitlement amount, the flexibility of CDBG still makes an impact; • Despite a funding decline over the past five years, the number of low/mod persons served continues to increase; • The jurisdiction’s area of greatest need can always count on CDBG NACCED Presentation V.2

The Future of CDBG • “Fully Fund the Community Development Block Grant: In the long run, regions are only as strong as their people and neighborhoods. The Community Development Block Grant (CDBG) program is an important program that provides housing and creates jobs primarily for low- and moderate-income people and places.” “2008 Obama-Biden Democratic Platform” NACCED Presentation V.2

HUD’s FY 2010 Budget: A change in the focus for CDBG “Since the mid 1970’s, CDBG has provided communities and states with extremely flexible funding to address locally determined community and economic development priorities.” “Despite these attributes, the formula driving the allocation of CDBG funds has been in place since 1977 and has neither kept current with shifting population and social dynamics nor distributed funds adequately to communities that are in most need.” NACCED Presentation V.2

HUD’s FY 2010 Budget: A change in the focus for CDBG “HUD hopes to ensure that its main community development programs reflect America as it is today, not as it was three decades ago before the impact of major population growth, as well as immigration shifts. Increased funding will allow an update to a formula this is more than 30 years old without any jurisdiction receiving a reduction in funding…” “With a higher funding level, HUD can hold all grantees harmless at their FY 2009 funding amount, leaving the proposed increase to expand funding for the needy communities that do not receive their fair share because of problems in the existing formula.” NACCED Presentation V.2

HUD’s FY 2010 Budget: A change in the focus for CDBG “HUD also seeks to strengthen CDBG performance by helping grantees tailor their community development strategies to local market and social realities while better measuring performance to enhance accountability… These efforts will focus on developing appropriate performance metrics to measure progress over time…” NACCED Presentation V.2

After 35 Years CDBG Still Works! CDBG… • Is Flexible; • Leverages Private Investment - 3:1; • Focuses on those in need at or below 80% AMI; • Open citizen participation process is a model for democratic governance ; • Supports balanced community growth through economic, community, and housing development; • Provides local jurisdictions with a funding mechanism for non-profit collaboration; • Provides necessary “gap financing” for local governments to aggressively pursue infrastructure and public facilities that cater to eligible clientele; • Helps provide funding sources to prevent housing decay, promote stabilization of existing housing, with a corollary tax benefit for home values; NACCED Presentation V.2

“It’s purpose and relevancy in the New Millennia”