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This is a story about one way local governments get funding for community development. Here's Big City. Big City is in a major metropolitan area. A lot of people live there. Big City has problems they need money to fix. Their roads are bad. One of their neighborhoods has a lot of abandoned homes. Some buildings downtown are deteriorating. There aren't enough jobs. Working class families have a hard time finding places to live that they can actually afford. Here's Small Town. Small Town has the exact same problems. For both Big City and Small Town, the problems are so large there just isn't any way for the local government to pay for solutions on its own. That's where Community Development Block Grant (or CBG) funding comes in. This is money from the federal government. Of course, the government isn't giving funding away for just anything. They say CBG must go toward community development and at least 70% has to benefit people with low or moderate incomes. The rest of the funding can be used for blight elimination or disaster relief regardless of income. Big City says, “We can fix the bad roads in low income neighborhoods, eliminate blight, improve buildings everyone uses, build some affordable housing, and create jobs, so let's apply for CBG.” Because of their size and metropolitan status, Big City is actually entitled to CBG funding. To get the money set aside for them, they send HUD something called a “Consolidated Plan” that says how they plan to use CBG money to benefit low and moderate-income people living in Big City. Small Town is not entitled to funding like Big City. Small Town actually has to apply to the state government for CBG funding, and their project has to fit into the community development goals the state chooses. Funding is competitive, so Small Town might not get anything. Big City and Small Town apply, and they both get funding. Now if they want, they can subgrant CBG funds to local organizations that specialize in community and economic development. That's the Community Development Block Grant program in a nutshell. For technical information and application guidelines, visit HUD.gov, or look around your state government's website to see which agencies administer CBG funding.
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