Cities have used the substantial flexibility CDBG affords them to pursue a mix of geographic targeting and programmatic development strategies. CDBG funds may be spent on housing, economic development, public facilities, social services, land acquisition, and other activities. Although the national allocation of funds among activities has changed little from year to year, cities have engaged in significant program shifts in response to changing needs and priorities. Furthermore, CDBG funds have enabled cities to mobilize and leverage other resources to support CDBG programs and projects--some of which, like housing rehabilitation, might not have been pursued otherwise.
CDBG programs have tended to be small-scale, "bricks and mortar" initiatives. Housing dollars are concentrated in rehabilitation activities, public facility dollars are invested in traditional public works (i.e., transportation, sewers), economic development support emphasizes assistance to small and/or minority-owned businesses, while public service dollars tend to be directed toward services for very low-income persons. Evidence from CDBG-funded program agencies shows that 75 percent of their public facilities and services, 62 percent of owner-occupied housing rehabilitation, and 56 percent of business assistance programs started with CDBG dollars.
Despite the absence of geographic targeting requirements, CDBG has been primarily a "neighborhoods" program, with cities allocating an average of 54 percent of their 1992 funds to one or more neighborhood-based strategies. Central cities, highly distressed cities, and cities with spatially concentrated poverty were most likely to pursue neighborhood-based activities rather than citywide strategies. In addition to its neighborhood emphasis, CDBG has sustained benefits to the low- and moderate-income populations for which they were intended. In fact, CDBG expenditures to benefit lower income persons have substantially exceeded the minimums set by Congress (now at 70 percent).
The evaluation shows that CDBG has produced positive intermediate impacts, increasing the capacity of local institutions to plan for--and effectively deliver--community development programs. However, it also points out that local program coordination, strategic planning, and evaluation processes could be improved. Citizen influence in the CDBG process is growing, with 51 percent of cities going beyond CDBG public participation requirements to form citizen advisory panels.
Between 1980 and 1990, about one-third of census tracts receiving CDBG funds showed increasing poverty rates, about one-half were stable, and poverty declined in only 16 percent. Nonetheless, there are indications that significant, targeted, and sustained CDBG investment was directly linked to stabilizing or improving poverty rates. Indepth research in 16 cities also found that almost all of the improved or stabilized neighborhoods contained a mix of income groups, either of long standing or as a result of investments that attracted moderate- and upper-income residents. This evaluation provides new proof of the vital role that CDBG plays in stabilizing and revitalizing neighborhoods, and of its positive contributions to the institutional capacity of local government and nonprofit agencies. CDBG offers a proven basis for HUD's efforts to consolidate its community and economic development programs into a flexible and effective block grant. Federal Funds, Local Choices: An Evaluation of the Community Development Block Grant Program is now available from HUD USER for $4. A second volume, Methodological Appendix, is also available for $4. Please contact HUD USER to obtain print copies.