This is the fifth post in NLC’s 90th Anniversary series.
The Community Development Block Grant Program (CDBG) turns 40 this August, marking an important milestone for the National League of Cities (NLC) and other stakeholders. To observe the occasion, NLC has teamed up with the co-chairs of the Congressional Urban Caucus, Representatives Chaka Fattah (D-PA) and Michael Turner (R-OH), to support H.Res. 668, Supporting the goals and ideals of the Community Development Block Grant program. Additional cosponsors are welcome, and you can help.
The 40th Anniversary of CDBG is also an opportunity to reflect on how NLC’s views of the program have evolved over successive legislative campaigns. NLC has been a champion of CDBG from the very beginning, when President Gerald Ford enacted the program by signing the Housing and Community Development Act on August 22, 1974.
In the intervening years, NLC has led numerous campaigns to turn back efforts to weaken or eliminate the program. Although campaigns to “Save CDBG” have been successful thanks to the advocacy of thousands of local elected officials, NLC has taken a more nuanced view of legislative proposals regarding program flexibility over CDBG’s 40 year history.
CDBG was conceived and enacted in the 1970’s, following significant social upheaval and ongoing disparities within cities and towns. The program replaced 7 previous federal programs – Urban Renewal, Model Cities, Water and Sewer Facilities, Open Spaces, Neighborhood Facilities, Rehabilitation Loans and Public Facility Loans. NLC advocated in support of the consolidation and rallied support for the new CDBG program. There were many reasons for this, but two stand out.
First, many of the programs CDBG replaced, like Urban Renewal, had become racially divisive within communities and highly politicized within Congress. Second, CDBG replaced several highly targeted programs with one flexible program that provided local officials with a greater degree of local control over federal funds. Upon signing the bill, President Ford expressed this second reason by saying “this bill will help return power from the banks of the Potomac to people in their own communities. Decisions will be made at the local level.”
At some point in the 1980s however, NLC’s leadership was concerned that the pendulum was swinging too far in the direction of flexibility and actually came out against a proposal to eliminate the requirement that CDBG primarily benefit those in low and middle income brackets. NLC’s President at that time, Cleveland Mayor George Voinovich, who would go on to be a U.S. Senator from Ohio, testified to Congress that, “without meaningful guidelines and review by HUD of a city’s compliance with the primary objectives of the Act . . . pressures to fund a wide range of unfocused activities will be very severe.” 
He put it more bluntly in an UPI interview, “we insist the program be used for low and moderate income people. Otherwise it becomes revenue sharing and then it disappears. It is money meant to rebuild our cities. It is not meant to meet a lot of other needs.” Mayor Voinovich proved correct when general revenue sharing was eliminated in the late 1980s.
NLC was almost too successful, however, in turning back the proposal to drop CDBG targeting requirements. By the 1990s NLC had refocused on increasing flexibility and local control under the CDBG program. A survey of NLC members in 1994 showed that local official’s views on CDBG were evolving again.
On a question about local community development, a majority of respondents said the primary goal of community development was to improve the tax base. Poverty alleviation was secondary.
More recently, questions of program flexibility have receded as successive budget crises have resulted in significant funding cuts for the CDBG program. Still, in the 2000s, NLC lead two successful campaigns to turn back Administrative proposals to eliminate CDBG by means of consolidation. And despite recent program cuts, CDBG continues to stand out as one of the few federal programs to maintain a significant bipartisan base of support.
Moreover, it has remained sufficiently flexible to be repurposed to meet contemporary challenges. The CDBG program proved effective for local efforts to overcome the recent home foreclosure crisis and subsequent national economic downturn, serving in many instances as a crucial source of gap funding for projects and services that otherwise would have been cut from local budgets.
In addition to housing and infrastructure, CDBG is being used in ways entirely unforeseen in the 1970s, supporting economic development efforts that have led to much-needed job creation.
The next challenge to CDBG is not likely to be too far off. For 40 years, CDBG has funded thousands of projects and programs and not every project is a success. After 40 years, it’s almost inevitable that some funding would find its way to unscrupulous use.
With such an expansive history, it’s possible for CDBG champions and opponents alike to create further lists of projects that demonstrate the best and worst uses of the program. Program funding grows more challenging each year as well, as the percentage of the HUD budget required to fund housing vouchers steadily climbs. History suggests simply preserving the status quo is a formula for diminished returns.
About the author: Michael Wallace is Program Director for Community and Economic Development at the National League of Cities. As a member of the Federal Advocacy team, Michael works closely with mayors, council members and municipal staff to represent local priorities in the areas of housing, community development and economic growth.
 Richard P. Nathan and Paul R. Dommel, Political Science Quarterly, Vol. 93, No. 3 (Autumn, 1978), pp. 421-442  Timothy Conlan “From New Federalism to Devolution”, pp. 47-50  Ferguson, Ronald F., Urban Problems and Community Development, p. 146  National League of Cities. 1994. “Attitudes toward Economic Development and Poverty.”