2.

THE SECOND FACTOR EXPLAINING THE FAILURE OF

PROGRAM COORDINATION IS THAT BLOCK GRANT ACTIVITIES

TEND TO BENEFIT HIGHER INCOME PERSONS RATHER THAN LOWINCOME CONSTITUENTS OF CDC. A STRONG, POSITIVE CORRELATION EXISTS BETWEEN THE LEVEL OF FUNDS TARGETED FOR URBAN SIAS AND THE MEDIAN FAMILY INCOMES FOR THOSE AREAS, INDICATING THAT LOW-INCOME PERSONS ARE NOT BENEFITING FROM THE BLOCK GRANT PROGRAM. (A SIMILAR ANALYSIS FOR RURAL SIAS WAS NOT POSSIBLE DUE TO

DIFFERENT REPORTING PROCEDURES.)

OUR STUDY FURTHER INDICATES THAT SHARED PRIORITIES

OF THE CDCS AND BLOCK GRANT RECIPIENTS SUPPORT A
POTENTIAL THRUST TOWARD GREATER COORDINATION OF THESE
TWO PROGRAMS. IN HUD'S REPORT OF THE FIRST YEAR OF

BLOCK GRANT ACTIVITIES, ENTITLEMENT GRANTEES WERE
ASKED TO LIST THEIR THREE TOP PRIORITIES.

SIMILARLY,

THE LAW PROJECT REQUESTED CDCS TO LIST THEIR OBJECTIVES

BY PRIORITIES.

TWENTY-SIX PERCENT OF BOTH THE CDC

AND BLOCK GRANT RECIPIENTS LISTED HOUSING AS A TOP
PRIORITY; 20. PERCENT OF THE CDCs AND 19 PERCENT OF
THE CITIES CITED COMMUNITY DEVELOPMENT.

PROGRAMS

DESIGNED TO MEET OTHER OBJECTIVES COULD EASILY BE

COORDINATED TO MUTUALLY SUPPORT ONE ANOTHER.

IT IS IN THE REALM OF ECONOMIC DEVELOPMENT

THAT THE GREATEST CONFLICT OF OBJECTIVES EXISTS.

ECONOMIC DEVELOPMENT WAS THE PRIORITY OF 77 PERCENT

OF THE CDCs BUT FOR ONLY 10 PERCENT OF THE ENTITLEMENT GRANTEES, THOROUGHLY INDICATING A DISCOURAGEMENT

OF NEEDED EMPHASIS ON ECONOMIC DEVELOPMENT IN THE

NATION'S URBAN NEIGHBORHOODS.

COORDINATING CDC AND BLOCK GRANT

COMMUNITY DEVELOPMENT PROGRAMS:

AN EVALUATION OF 1975 AND 1976

Timothy J. Smith
National Economic Development
Law Project

Earl Warren Legal Institute
University of California

2313 Warring

Berkeley, California

Tel: (415) 642-2826

December 1976

94720

INTRODUCTION

1

Enactment of the Housing and Community Development Act of 1974 (P.L. 93-383) constituted a fundamental change in the allocation of federal community development assistance to units of general local government. Title I of the Act consolidated seven existing categorical programs administered by the Department of Housing and Urban Development into the Community Development Block Grant (CDBG) program. Communities were given the authority to determine local community development needs, establish priorities, and allocate resources.

Federal assistance is provided with CDBG funds for seven specific objectives for which CDBG funds may be utilized, so long as the activities are consistent with the Act's primary objective. Congress clearly defined the primary objective of Title I which states:

The primary objective of this title is
the development of viable urban
communities, by providing decent housing
and a suitable living environment and
expanding economic opportunities, princi-
pally for persons of low and moderate

income.

In carrying out community development activities, funds may thus be used anywhere within the local

government's jurisdiction to serve principally the needs of low- and moderate-income residents.