Federal Reserve Bank of San Francisco

Community Development

Community Investments Vol 20, Issue 3
Strengthening Community Development Infrastructure: The Opportunities and Challenges of CDBG

Author(s): Naomi Cytron, Federal Reserve Bank of San Francisco

2008

Community Investments

Created in 1974, the Community Development Block Grant (CDBG) program, one of the longest continuously running programs at the Department of Housing and Urban Development (HUD), is one of the federal government’s largest community development and neighborhood revitalization programs. Program funds are distributed to local jurisdictions and states based on a standard formula, but as long as the funds principally benefit low- and moderate-income people, local actors are given broad discretion regarding their use. Coming out of the urban riots of the 1960s and the general recognition that large-scale urban renewal efforts were a failure, CDBG was developed with the idea that local governments and nonprofits are better situated to determine community development needs than a more centralized oversight body. The broad range of uses allowed under the program means that local allocation strategies can be crafted in ways that are responsive to local conditions. This flexibility has been held up as the program’s greatest strength.

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