How CDBG Came to Pass

Abstract

After 40 years, it is hard to remember the context in which the Community Development Block Grant (CDBG) was created and became an established program. Proposed by a Republican president, it was enacted by a Democratic Congress that was in the process of impeaching him. It replaced a program that had been in existence for 25 years and had strong political supporters, as well as half a dozen other categorical programs, each with its own constituency. This paper will describe the policy process by which the CDBG program came into existence in the early 1970s, identifying the major concerns and their resolution.

Keywords::

• block grant
• community development
• urban policy

Acknowledgments

The authors thank Christopher C. DeMuth, Robert S. Kenison, Edgar O. Olsen, Rudolph G. Penner, Lawrence L. Thompson, and George S. Tolley for helpful discussions about CDBG and the predecessor programs. We alone are responsible for all interpretations and any errors.

Notes

^1. A useful compilation of this literature is given by Wilson (1966).

^2. One critic, a professor of sociology and urban studies, described the workable program as “a document of good intentions [that] is substituted for other measures of the program” (Greer, 1965, p. 27).

^3. For analyses of Model Cities, see Banfield (1991a) and Savage (2004).

^4. The OEO had a short life, however. The day after his re-election, President Nixon stated that the federal government was too big and he was going to set an example by cutting the size of his own office in half. Two days later, people realized that his office consisted of two organizations, the Office of Management and Budget and the Office of Economic Opportunity, and he was terminating the Office of Economic Opportunity. (One of us was then at the OEO on a leave of absence, and remembers vividly the resulting chaos and confusion.) The OEO was terminated, but many of its programs were transferred to a new independent agency, the Community Services Administration. The Health Insurance Study was assigned to the Department of Health, Education and Welfare; most of the professional social scientists at the OEO went with it. The Community Services Administration continued until 1981.

^5. In a response, Chairman Colean stated that “Time did not permit thorough study of the revenue sharing proposal, but it was recognized that in any case, it could not at once become a full substitute for specific aid programs” (President's Task Force on Urban Renewal, 1970, p. 11).

^6. Prior to 1977, the federal government's fiscal year ran from July 1 of calendar year 1 to June 30 of calendar year 2 and received the number of calendar year 2. The budget for the fiscal year was submitted to Congress in January or February, four to five months before the start of the fiscal year. Secretary Romney's letter was dated January 5, 1971.

^7. The metropolitan-balance concept was superseded by a decision to allow urban counties to be entitlement communities, with funds allocated by formula. This resulted from a vigorous lobbying campaign by the National Association of Counties, beginning in 1972. Urban counties were included in the president's 1973 proposal, discussed in the next section.

^8. The universe for this correlation is not explicitly stated, but it appears to be central cities, suburbs with at least 50,000 population, and urban counties, the jurisdictions which received funding by formula.

^9. The discussions of targeting were the nearest Congress came to considering the relative merits of “people-based” and “place-based” programs. Otherwise, the subject did not come up in the political process. We have no record or recollection of it being raised at any point, certainly not in those terms. It was raised by Professors Muth and Tolley in their criticism of the Urban Renewal Task Force report; they expressed the view that urban problems could be better mitigated with more emphasis on reducing poverty and less on physical restructuring (Colean, 1970).

^10. This summary of the administration's reasons for not having a detailed applications process is taken from testimony by HUD secretary James Lynn before the House Subcommittee on Housing (U.S. House 1973, p. 311).

^11. It should be noted that the application issue was centered on the cities and urban counties that would receive funding allocations by formula, and neither the 1974 nor the 1981 legislation applied to nonmetropolitan communities applying for funds from the states' share of CDBG.

^12. P.L. 93–383, Title I, Sec. 104(a)(6). A convenient source for the text of the original law is HUD's first annual report to Congress on CDBG (U.S. Department of Housing and Urban Development, Office of Community Planning and Development 1975, pp. 121–130).

^13. The text of laws can be found at http://uscode.house.gov/statutes/, followed by the year of the statute, and then by the year of the statute, the number of the Congress, and the number of the law. For example, P.L. 97–035 can be found at http://uscode.house.gov/statutes/1981/1981-097-0035.pdf.

^14. Neither of the initial reports on CDBG discusses the matter of which program activities were being funded by CDBG. The Brookings report briefly describes Urban Renewal and Model Cities as “major steps leading toward” CDBG (Nathan et al., 1977, p. 22), which Model Cities at least was, but neither was a step leading to CDBG in the way that their advocates expected. The Advisory Commission on Intergovernmental Relations (ACIR, 1977) does not mention program activities as a major issue raised during the political process.

^15. We are indebted to Edgar O. Olsen for providing us with this tabulation, calculated from the HUD Statistical Yearbooks for the years 1970–1974.

^16. In 1982, meanwhile, HUD secretary Samuel Pierce wrote in the foreword to a published evaluation of UDAG by the department's Office of Policy Development and Research: “The results of the study establish that the program is worthwhile, that it is an effective and proven asset in our efforts to help America's cities” (U.S. Department of Housing and Urban Development, Office of Policy Development and Research 1982, p. iv).

^17. Authors' calculations from U.S. Department of Housing and Urban Development, 1999, Exhibit 2-6, through 1998, subsequent CDBG annual reports to Congress through 2010 (the latest report), and HUD's Congressional Budget Justifications for FY2013 and 2014. The latest data available are for FY2012.

^18. The Reagan proposals were so extensive that there are different counts of the number of block grants. The New York State Community Action Association lists 8 (Masters, 1989); the Urban Institute lists 11 (Finegold, Wherry, & Schardin, 2004).

Additional information

Notes on contributors

Charles J. Orlebeke

Charles J. Orlebeke is Professor Emeritus of Urban Planning and Policy at the University of Illinois at Chicago. He has served in appointive positions in state and federal government, including Executive Assistant to Governor George Romney of Michigan and at the U.S. Department of Housing and Urban Development as Deputy Under Secretary for Policy Analysis and Program Evaluation (1970–1973) and Assistant Secretary for Policy Development and Research (1975–1977). His research interests and publications have focused on national urban policy, intergovernmental and urban finance, community-based development, and housing policy. He has participated in several evaluations of federal urban initiatives, including workforce development programs, the Community Development Block Grant program, and the Empowerment Zone program.

John C. Weicher

John C. Weicher is Director of the Center for Housing and Financial Markets at Hudson Institute. He has served in several appointive positions at the U.S. Department of Housing and Urban Development, including Director of the Division of Economic Policy (1973–1974) and Deputy Assistant Secretary for Economic Affairs (1975–1977). He has participated in several studies of housing and urban policy, including the National Housing Policy Review at HUD (1973–1974) and two evaluations by the National Research Council. His most recent book is Housing Policy at a Crossroads: The Why, How, and Who of Assistance Programs (AEI Press, 2012).