March 8, 2019 4:30PM

Community Development Block Grant Spending Is Poorly Targeted to Poor

Over the past two years, the White House budget called for eliminating Community Development Block Grants (CDBG) twice. If history is any indication, CDBG will once again be proposed for elimination when the budget is published next week. Most likely, Congress will afterward reject the White House’s suggestion, as it has in previous years.

If Congress cares about helping low-income people, it isn’t clear why they would reject the White House's suggestion, or at least why Congress wouldn't repurpose CDBG money for activities that address low-income needs directly.

Because “community development” is a broad and ambiguous goal, and CDBG is a flexible program, money is used on a variety of disparate activities with largely unmeasureable results. Simply reviewing a list of recently funded CDBG projects reveals exactly how disparate these activities are and how indirectly the program meets low-income people’s needs. Below are examples of projects that CDBG money has been used for in recent years:


  • Portions of a $432,400 hull repair for Kate “the lady of Moosehead lake” steamship in Greenville, Maine


  • $30,000 for LED lighting on a monument in Hamilton, Ohio


  • $500,000 to expand Niagara County brewing into North Tonawanda, New York


  • $515,000 for Northsiders Engaged in Sustainable Transformation (NEST) to purchase land for a grocery cooperative in Northside, Ohio


  • $20,000 for salaries for “Green Team” of highschool students and summer enrichment program, $15,000 to teach kids to sail and kayak in Lawrence, Massachusetts


  • $50,000 for a cinema that later foreclosed in Pittsfield, Massachusetts


  • $276,000 to fund a public skateboard park in North Adams, Massachusetts


  • $560,000 to fund the WNY (sustainable cheddar) Cheese Enterprise in Linwood, New York


  • $375,000 to open a burrito restaurant in Oneonta, NY


  • $225,000 for splash pad in Jacksonville, NC


  • $175,000 to fund a Jamaican cultural coalition in Queens, New York


  • $300,000 to revitalize a historic theater in Indianapolis, Indiana


  • $1 million to restore a historic hotel in Boyne City, Michigan


  • Up to $15,000 per eligible individual in Mobile, Alabama to pay for costs associated with historic homes


  • $2.7 million for “The Waterfront,” a 26,000 sf recreational facility that includes rock climbing walls, a golf simulator, etc. in Newark, New Jersey (plus $7 million through a HUD HOPE 6 grant)


  • $505,000 corporate subsidy to persuade Proctor & Gamble’s Natura acquisition to move to Fremont, California (part of a larger $1 million package of incentives)


  • (A portion of) $825,000 for a theatre feasibility study in North Adams, Massachusetts

Revitalizing historic buildings, expanding breweries, and teaching kids to sail are examples of spending that satisfy high-income preferences rather than low-income needs. At the very least, these are activities that local government should fund if they are important to local communities.