THE COMMUNITY DEVELOPMENT BLOCK GRANT
I. OVERVIEW OF THE CDBG PROGRAM:
The Community Development Block Grant (CDBG) Program is authorized under Title I of the Housing and Community Development Act of 1974 and is administered by the U.S. Department of Housing and Urban Development.
CDBG grew out of the consolidation of eight programs under which communities competed nationally for funds. The consolidated programs were:
· Open Space
· Urban Renewal
· Neighborhood Development Program grants
· Historic Preservation grants
· Model Cities supplemental grants
· Public Facilities loans
· Neighborhood Facilities grants, and
· Water and Sewer grants.
II. PRIMARY CDBG OBJECTIVE:
The primary objective of Title I of the Housing and Community Development Act of 1974 is the development of viable urban communities. These viable communities are achieved by providing decent housing, a suitable living environment and expanded economic opportunities for persons of low and moderate income.
To achieve these goals, the CDBG regulations outline eligible activities and the national objectives that each activity must meet. As recipients of CDBG funds, grantees are charged with ensuring that these requirements are met.
III. ELIGIBLE CDBG ACTIVITIES:
CDBG offers grantees a high level of flexibility in choosing programs and activities. Grantees select activities that best meet the needs of their communities, in accordance with the national objectives and requirements of the CDBG Program. CDBG funds may be used for:
CDBG grew out of the consolidation of eight programs under which communities competed nationally for funds. The consolidated programs were:
a. Housing
b. Public Facilities and Improvements
c. Economic Development
d. Public Services
III. a. HOUSING:
CDBG funds may be used to assist existing homeowners with the repair, rehabilitation or reconstruction of owner-occupied units. Grantees have the flexibility under the CDBG Program to design repair and rehabilitation programs that meet the needs of their residents. Examples of the types of local programs that may be funded include:
- Eligible Activities:
· Substantial rehabilitation which brings the property up to local codes and standards.
· Energy efficiency programs for homes through additional insulation, or new windows and doors.
· Providing handicapped accessibility through the installation of ramps and grab bars.
· Emergency repair for certain elements of a house such as a leaking roof.
· Weatherization programs designed to improve a house's ability to withstand the elements such as insulation and weather stripping.
· Other housing activities include: property acquisition or rehabilitation of property for permanent housing, conversion of non-residential structures into permanent housing, and new housing construction by a community-based development organization (CBDO).
- Documenting National Objectives for Housing:
1. Low-Mod Benefit
· Low- and moderate-income persons must occupy structures with one unit. If the structure contains more than one unit, at least 51 percent must be LMI occupied.
2. Eliminating Slum and Blight
If a rehab activity does not directly benefit low/mod persons, it may qualify under the slum/blight national objective. The requirements for meeting the slum/blight national objective under the Area Basis criteria include:
· The area delineated by the grantee meets a definition of a slum, blighted, deteriorated, or deteriorating area under state or local law.
· There is a substantial number of deteriorated or deteriorating buildings throughout the area.
· The activity addresses one or more of the conditions that contribute or contributed to the deterioration of the area.
3. Eliminating Slum and Blight on a Spot Basis
· The rehab activity must eliminate specific conditions of blight or physical decay on a spot basis.
· The rehab must remove only those conditions that are detrimental to public health and safety.
III. b. PUBLIC FACILITIES:
The acquisition, construction, reconstruction, rehab or installation of public facilities and improvements is an eligible activity under CDBG and can be carried out by grantee, subrecipient or other nonprofit.
- Eligible Activities:
· Infrastructure improvements (generally construction or installation) (e.g., street improvements, water and sewer lines) · Neighborhood facilities (e.g., recreational facilities, parks, playgrounds); and
· Facilities for persons with special needs (e.g., facilities for the homeless or battered spouses, nursing homes or group homes for the disabled)
Eligible costs include:
· Energy efficiency improvements;
· Handicapped accessibility improvements;
· Architectural design features and other treatments aimed at improving safety, function, and aesthetic quality.
- Documenting National Objectives for Public Facilities:
1. Area Benefit
CDBG funded public improvements will typically be categorized as an area benefit activity. Under the area benefit criteria, the public facility must benefit all residents of an area where at least 51 percent of the residents are low/mod. The area does not have to be the same as census tract borders, but must be primarily residential.
2. Limited Clientele
Public facilities funded by CDBG may sometimes qualify under the limited clientele criteria of the low/mod national objective. The regulation stipulates that the facility benefit a specific targeted group of people, of which at least 51 percent must be low- and moderate-income.
· Public facilities such as homeless shelters or group homes for persons with special needs are two examples that qualify under the limited clientele criteria. The populations served by these facilities are populations that are presumed to be low- and moderate income.
III. c. ECONOMIC DEVELOPMENT:
CDBG funds may be used to undertake certain economic development activities.
- Eligible Activities:
· Acquiring, constructing, reconstructing, rehabilitating, or installing commercial or industrial buildings, structures and other property equipment and improvements (570.203(a));
· Assisting a private, for-profit business (e.g., loans, grants, interest subsidies) for the specific purpose of creating jobs (570.203(b));
· Job training, placement and other types of services area eligible if carried out in conjunction with for-profit business assistance or building acquisition/rehab/construction (see 570.203 (a) and (b) above);
· Loans and technical assistance/training to persons owning or developing a microenterprise, (defined as a commercial enterprise that has five or fewer employees, one or more of whom owns the enterprise) (570.201(o));
· Programs to assist persons who want to own or develop a microenterprise;
· Job training, placement and other types of services are also eligible and can be carried out as a separate activity (public service);
· CDBG ED funds may also be provided to Community Based Development Organizations (CBDOs) to carry out certain activities in connection with neighborhood revitalization, community economic development or energy conservation projects.
- Documenting National Objectives for Housing:
1. Area Benefit
In order to quality under the area benefit criteria, the economic development activity must benefit all residents in a particular area. In addition:
· At least 51 percent of the residents must be low-and moderate-income (LMI) persons;
· The service area must be primarily residential; and
· The activity must meet the identified needs of low-and moderate-income persons.
2. Job Creation/Retention
These are eligible activities designed to create or retain permanent jobs, at least 51 percent of which (computed on a full-time equivalent basis) will be made available to or held by low- and moderate-income persons.
The following requirements must be met for jobs to be considered created or retained:
· If grantees fund activities which create jobs, there must be documentation indicating that at least 51 percent of the jobs will be held by, or made available to, low- and moderate-income persons.
· For funded activities which retain jobs, there must be sufficient information documenting that the jobs would have been lost without the CDBG assistance and that one or both of the following applies to at least 51 percent of the jobs:
1. The job is held by a low- or moderate-income person.
2. The job can reasonably be expected to turn over within the following two years and steps will be taken to ensure that the job will be filled by, or made available to, a low- or moderate-income person.
The following requirements apply for jobs to be considered available to or held by low and moderate income persons.
· Created or retained jobs are only considered to be available to low- or moderate-income persons when:
1. Special skills that can only be acquired with substantial training or work experience or education beyond high school are not a prerequisite to fill such jobs, or the business agrees to hire unqualified persons and provide training; and
2. The recipient and the assisted business take actions to ensure that low- and moderate-income persons receive first consideration for filling such jobs.
· Created or retained jobs are only considered to be held by low- or moderate-income persons when the job is actually held by a low- and moderate-income person.
3. Limited Clientele
Individuals carrying out microenterprise assistance activities must be low to moderate income, and therefore eligible under the limited clientele objective.
III. d. PUBLIC SERVICES:
- Eligible Activities:
The CDBG regulations are very broad and allow the use of grant funds for a wide range of public service activities, including, but not limited to:
· Youth services (mentoring, after school and enrichment programs)
· Services for senior citizens; · Employment services (e.g., job training);
· Child care;
· Health services;
· Services for the homeless;
· Substance abuse services (e.g., counseling and treatment);
· Crime prevention;
· Recreational services
CDBG funds may be used to pay for labor, supplies and material as well as to operate and/or maintain the portion of a facility in which the public service is located. This includes the purchase or lease of a facility, equipment and other property needed for the public service. To utilize CDBG funds for a public service, the service must be either:
1. A new service, or
2. A quantifiable increase in the level of an existing service which has been provided by the grantee or another entity.
Furthermore, the service must not discriminate against any person on the basis of religion and will not limit such services or give preference to persons on the basis of religion and;
Must not:
· Provide religious instruction or counseling,
· Conduct religious worship or services, · Engage in religious proselytizing, · Or exert religious influence in the provision of services.
- Documenting National Objectives for Public Facilities:
CDBG-funded public service activities are typically categorized under the low/mod benefit national objective as either area benefit or limited clientele activities. The distinguishing factor between the two categories is whether the service will be offered to all residents of a particular low/mod income area or to a particular group of low/mod residents in the entire community.
IV. NATIONAL OBJECTIVES OF CDBG:
CDBG grantees are responsible for assuring that each eligible activity meets one of three national objectives:
CDBG grew out of the consolidation of eight programs under which communities competed nationally for funds. The consolidated programs were:
a. Benefit low and moderate income people
b. Aid in the prevention of slum and blight
c. Meet a need having a particular urgency (urgent need)
IV a. BENEFIT LOW- AND MODERATE-INCOME PERSONS:
Under this objective, CDBG-assisted activities must benefit low and moderate-income persons using one of the following categories:
CDBG grew out of the consolidation of eight programs under which communities competed nationally for funds. The consolidated programs were:
1. Area benefit activities
2. Limited clientele activities
3. Housing activities
4. Job creation or retention activities
1. Area Benefit
Area benefit is the most commonly used category for basic activities. It is an activity that benefits all residents in a particular area, where at least 51 percent of the residents are low- and moderate-income (LMI) persons. The service area must be primarily residential and the activity must meet the identified needs of low and moderate-income persons. Area benefit activity examples include street improvements, water and sewer lines, neighborhood facilities, and facade improvements in neighborhood commercial districts.
2. Limited Clientele
Limited clientele activities benefit a limited number of people as long as at least 51 percent of those served are low/moderate income (LMI) persons. These activities must:
· Benefit a clientele that is generally presumed to be principally low- and moderate-income (abused children, battered spouses, elderly persons, severely disabled adults (see the box below), homeless persons, illiterate adults, persons living with AIDS and migrant farm workers).
· Require documentation on family size and income in order to show that at least 51 percent of the clientele are LMI.
· Have income eligibility requirements limiting the activity to LMI persons only.
· Be of such a nature and in such a location that it can be concluded that clients are primarily LMI.
In addition, the following activities may qualify under the limited clientele national objective:
· Removal of architectural barriers to mobility for elderly persons or the severely disabled.
· Microenterprise activities carried out in accordance with the HUD regulations when the person owning or developing the microenterprise is LMI.
· Activities that provide training and other employment support services when the percentage of persons assisted is less than 51 percent LMI may qualify if the proportion of total cost borne by CDBG is no greater than the proportion of LMI persons assisted; and when the service assists businesses, CDBG is only used in the project to pay for the job training and/or supportive services.
Examples of limited clientele activities include: construction of a senior center; public services for the homeless; meals on wheels for the elderly; and construction of job training facilities for the handicapped.
IV b. ELIMINATION OF SLUM AND BLIGHT:
These are activities that help to prevent or eliminate slums and blighted conditions. The activities must meet the criteria of one of the three following categories:
· Prevent or eliminate slum and blight on an area basis. Examples include: assistance to commercial or industrial businesses, public facilities or improvements and code enforcement.
· Prevent or eliminate slum and blight on a spot basis. These are activities that eliminate specific conditions of blight or physical decay on a spot basis not located in a slum or blighted area. Examples include: elimination of faulty wiring, falling plaster, or other similar conditions that are detrimental to all potential occupants; historic preservation of a public facility; and demolition of a vacant, deteriorated building.
IV c. URGENT NEED:
Use of this category is extremely rare. It is designed only for activities that alleviate emergency conditions. For example, a coastal city is struck by a major hurricane within the last month and does not have any other resources to demolish severely damaged structures that pose a danger to occupants of neighboring structures.
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