What Are Community Development Block Grants?

Community development block grants, sometimes referred to by the acronym CDBG, are grants designed to help revitalize and spur economic development in a community. Typically, the program is for low-to-moderate income housing in blighted areas. Some money is provided directly to cities at the federal level by the United States government, and some of it goes to the states. The states then distribute the money to various cities or other forms of local governments based on a competitive grant process.

The qualifications for the grant program differ based on which division of the community development block grants a location is seeking. The portion directly allocated to the municipalities and counties directly from the federal government is known as the entitlement communities grants. Eligible cities include major cities within a metropolitan statistical area, but some cities can qualify in other ways based on population. Projects funded with these grants include acquisition of real estate, relocation, and construction. While the grants are commonly associated with housing, infrastructure improvements such as sewers and roads are also possible grant targets.

State governments administer community development block grants as well through the Small Cities CDBG Program. In this program, each state comes up with criteria by which projects will be judged. While all projects might be required to meet certain federal standards, the states are given a great deal of leeway in choosing projects that are right for them. Some grants for smaller cities are also directly administered by the Department of Housing and Urban Development.

One area of community development block grants tends to be heavily used by businesses. This is the Brownfields Economic Development Initiative. The program takes commercial and industrial locations that have been abandoned or that sit unused, and helps redevelop them. In this case, the locations must pose some sort of threat of contamination to the environment if not cleaned up properly. Therefore, most businesses would not be interested in the sites without some sort of financial assistance for the rehabilitation effort.

Some community development block grants also target Native American tribes in an effort to help those living in impoverished conditions on tribal land. These grants may be for housing or some types of business development as well, but they specifically cater to the needs of a unique demographic. As with all such grants, funding is limited and therefore projects may be chosen on a competitive basis. Still, groups have a better chance to receive money because the competition is more restricted.