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The Community Development Block Grant (CDBG) program is a longstanding federal grant designed to support local governments in providing affordable housing and expanding economic opportunities for low to moderate income people. The US Department of Housing and Urban Development (HUD) distributes funds to localities, who then determine how best to allocate resources for community development.
While HUD assesses the program’s overall effectiveness, there is limited comparative research on how different cities’ stewardship strategies impact the targeted populations. This study conducts a cross-sectional analysis to examine variations in CDBG implementation across localities by comparing funding amounts and allocation strategies. The funding cycles observed are 2011 and 2017, with short term comparisons being made from 2011-2013 and 2017-2019. The outcomes observed are based on the federal goals of the CDBG program. This research aims to identify the most successful ways local governments can leverage their CDBG funding to address housing affordability and economic hardship.
Key Findings
For Illinois in 2011, the greater the amount of funding awarded to a city, the more the percentage of low-income homeless individuals lowers and the lower the concentration of high poverty neighborhoods, as seen in Chicago. However, cities focusing their funds on housing and the low-income homeless population does not necessarily lower the percentage of homeless individuals there are, as seen in Urbana. Furthermore, the more cities focus on poverty solutions rather than mitigation and the more they focus their funds on high poverty neighborhoods, the lower the concentration of high poverty neighborhoods and the lower the homelessness percentage.
In 2017, the overall CDBG allocation decreased for both cities, showing that small decreases in funding may not have a negative impact on the percentage of low-income homeless individuals and the concentration of high poverty neighborhoods. Both Chicago and Urbana’s homeless population percentages and poverty concentrations decreasing from 2017 to 2019 may be due to the large allocations the cities made to public services/facilities. This is a change from 2011, where the poverty allocations were lower, especially in Urbana. This change resulted in more dramatic changes for both cities’ poverty percentage, and a shift from an increase to a decrease in the homelessness percentage and poverty concentration for Urbana.
Conclusion
Though the amount of funding that localities receive overall may have some impact on the effectiveness of their programming, it does not seem to be the main cause of changes. The comparisons between Chicago and Urbana in both 2011 and 2017 show that high public services allocations are the most effective way to use the CDBG to decrease the homeless percentage and poverty concentration in high poverty neighborhoods in cities. These public services target the root of both homelessness and poverty by providing assistance and counseling on the biggest pressures on those in poverty, while housing is just one, albeit important, aspect of homelessness and poverty.
Future research can be done on more states and cities to make this research more generalizable. Preliminary research for cities in California and Indiana from this study shows similar results to Illinois. More detailed research can also be done by looking at what specific public service programs seem to be common throughout successful cities. The main takeaway for this research is that local governments should focus their funding on poverty allocations such as public services and facilities to most effectively use their CDBG funding.
Sophie Guo is a senior at Indiana University studying Law and Public Policy at the O’Neill School of Public and Environmental Affairs and Criminal Justice in the College of Arts and Sciences. She is attending law school in the fall.
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