How eliminating CDBG affects communities

The Trump Administration budget sent to Congress on March 16th, 2017 would eliminate the $3 billion federal Community Development Block Grant (CDBG), which provides affordable housing and services to vulnerable individuals. In its place Trump proposes to “devolve community and economic development activities to the State and local level, and redirect Federal resources to other activities.” However, cities rely on federal funding to implement activities.

Eliminating CDBG will do nothing to decrease the demand for housing and services. Officials in 22 cities surveyed between September 1, 2014 and August 31, 2015 identified lack of affordable housing as the leading cause of homelessness among unaccompanied individuals, followed by poverty, mental health and substance abuse, according to the U.S. Conference of Mayors (USCM) Hunger and Homelessness Survey.

In Baltimore City, one of the cities included in the USCM survey, the largest portion of CDBG funding pays for housing construction, acquisition, and rehabilitation, as well as code enforcement, and lead testing and abatement. Under funded housing activities, first time homebuyers with total family income at or below 80% of area median income can receive $5,000 toward down payment and settlement expenses through the City’s Homeownership Assistance Program.

chartPoverty and the lack of affordable housing are salient in Baltimore City. More than half of households pay over 30 percent of their total income toward rent and housing-related expenses. In Belair-Edison, a neighborhood in northeast Baltimore, that proportion escalates to 71.5 percent. The median income in Belair-Edison is $38,905. About 37 percent of the  neighborhood’s children live below the poverty line.

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2014 Demographics, Belair-Edison and Baltimore City
Belair-Edison Baltimore City
Affordability Index – Rent 71.5% 51.8%
Median Household Income $38,906 $41,819
Percent of Children Living Below the Poverty Line 36.9% 34.6%
Unemployment Rate 16.8% 14.2%

Source: http://bniajfi.org/community/Baltimore%20City/

Due in part to $100,000 in CDBG funding, the community nonprofit Belair-Edison Neighborhoods, Inc. (BENI) is able to provide “pre-purchase, budget, default and foreclosure prevention counseling; outreach and related services; technical assistance to businesses and property owners located in the commercial district; and other activities necessary for continued revitalization of the Belair-Edison neighborhood.” According to BENI’s financial report, since 2000, the organization has increased home values in target blocks and facilitated more than 80 home improvement loans worth nearly $4 million. Simultaneously, BENI has cultivated commercial renovations worth nearly $5.1 million, and facilitated over 80 resident-led block projects.

According to Johnette Richardson, Executive Director of BENI, “Belair-Edison, one of Baltimore’s most critical neighborhoods, is a community that hasn’t [apart from CDBG] had much other large-scale investments. For decades we have relied on creating a community of educated home buyers who invest in their homes and in the community as a whole. Programs like CDBG help us to be able to provide this education, not only for prospective homebuyers and homeowners in the Belair-Edison community, but for all of Baltimore City.

It would be devastating to end a program like CDBG.”

Counter to the Trump administration’s claim that CDBG “is not well-targeted to the poorest populations and has not demonstrated results,” Baltimore allocates more than $7 million in CDBG funds to approximately 60 nonprofit organizations providing “programs for seniors and youth, health services, literacy programs, home ownership counseling, child day care service, and project-delivery costs related to rehabilitation.” According to the Baltimore budget documents, in FY 2016 this funding provided socio-economic services to 21,500 individuals.

In FY 2017 (which began on July 1, 2016) Baltimore’s community development block grants funded:

  • $48,560 to the Women’s Housing Coalition, which provide comprehensive support services and case management, life skills training and other services to formerly homeless women and families.
  • $65,500 to the South Baltimore Learning Center, which provides adult educational program aimed at assisting low- and moderate-income persons with reading, math, writing, GED preparation, and career counseling.
  • $35,000 to the Public Justice Center, to provide legal services to low- and moderate-income tenants who are under the threat of eviction or who live in homes with conditions that pose a threat to public health and safety. In addition, this funding was used to educate housing organizations and public agencies regarding fair housing laws and practices.

Baltimore’s Department of Housing and Community Development (DHCD) anticipated that in FY 2018, (which begins in July 2017) it would receive over $19 million in CDBG funding, 90 percent of which would be used for activities benefiting low- and moderate-income persons. The CFY funding will be based on a continuing resolution that reflects current year funding levels. According to Steve Janes, Assistant Commissioner of Research & Compliance at DHCD, the draconian nature of the administration’s budget proposal makes the assumptions underlying the projection that much less certain.

These unknowns put Baltimore and all cities and their community partners in profound jeopardy if CDBG is eliminated and municipalities have to find new funding sources to serve these vulnerable populations.

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Do you have a story about how cuts to CDBG would affect your community? Contact us at govex@jhu.edu @gov_ex @katklosek