The Community Development Block Grant Program Can Be More Effective in Revitalizing the Nation's Cities

CED-81-76: Published: Apr 30, 1981. Publicly Released: May 4, 1981.

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The Community Development Block Grant Program allows cities to undertake a wide variety of activities to provide decent housing, jobs, and neighborhoods for their residents. Funds can be used for the acquisition and disposition of property, street improvements, water and sewer facilities, the rehabilitation of private properties, public services and parks, playgrounds, and other recreational facilities. The program's legislative history shows that, while Congress intended communities to have great flexibility in implementing their block grant programs, cities were to design their individual programs within broad national objectives.

The lack of limitations on how funds may be used is diluting the program's impact. Cities often spread funds too widely, and rehabilitation funds are spent for questionable purposes and are not always provided to persons with the greatest need. In addition, there is sometimes insufficient information to determine whether funds are properly spent for eligible activities. The Department of Housing and Urban Development (HUD) has taken several initiatives to encourage better targeting by communities and, in response to past reports of weaknesses in its monitoring of block grant recipients, it has modified its grantee monitoring system. The GAO review raises questions as to whether local flexibility should be tempered with more Federal guidance on the overall limits within which cities can operate their block grant programs.

Matter for Congressional Consideration

  1. Status:

    Comments: Please call 202/512-6100 for additional information.

    Matter: The appropriate congressional committees should examine the overall impact of assistance provided under the Community Development Block Grant Program and identify additional measures needed to meet the objectives of the Housing and Community Development Act of 1974. Specifically, the following issues should be considered: (1) the need for all grantees to concentrate their block grant funds in distressed geographic areas small enough so that visible improvements can be achieved in a reasonable time period and to ensure that claimed benefits to low- and moderate-income persons are, in actuality, occurring; (2) the need to reduce the broad list of activities currently eligible so that funds can be focused on those activities which meet the cities' most urgent revitalization needs; (3) the need to develop overall income eligibility requirements for recipients of block grant-supported rehabilitation; and (4) the need to limit eligible rehabilitation work to that which is essential to restore the housing unit to a safe, decent, and sanitary condition, specifically prohibiting non-essential and luxury items, so that more homes needing basic repairs can be rehabilitated.

Recommendation for Executive Action

  1. Status:

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of HUD should direct the Inspector General to conduct an analysis to determine the extent of problems in grantees' controls over expenditures of block grant funds and to recommend solutions to the problems. Such an analysis could be performed in two phases. The first phase should assess whether or to what degree such problems continue to exist. The second phase, if warranted, should concentrate on identifying the basic causes of the problems and suggesting corrective actions.

    Agency Affected: Department of Housing and Urban Development


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