The Community Development Block Grant (CDBG) is one of the longest-running programs of the U.S. Department of Housing and Urban Development. CDBG funds are allocated more than 1,100 local and state governments on a formula basis, at $4.7 billion in FY2005. Because communities can determine the best local use of funds, within national priorities, and because it is a long-running program, CDBG plays a major role in local community development activities such as affordable housing, anti-poverty programs, and infrastructure development.

Larger cities and urban counties, called "entitlement communities," are required to prepare and submit a "Consolidated Plan" that establishes goals for the use of CDBG funds. Proposed uses of CDBG must be consistent with broad national priorities for CDBG: activities that benefit low- and moderate-income people, the prevention or elimination of slums or blight, or other community development activities to address an urgent threat to health or safety. CDBG funds may be used for community development activities such as real estate acquisition, relocation, demolition, rehabilitation of housing and commercial buildings, construction of public facilities and improvements, such as water and sewer facilities, streets, neighborhood centers, and the conversion of school buildings, public services, ands economic development and job creation/retention activities.

The Community Development Block Grant (CDBG) was enacted in 1974 by president Gerald Ford through the Housing and Community Development Act of 1974 and took effect in January 1975. It had bipartisan support. The liberal leaning legislators liked that it required that local governments try to extinguish poverty and "urban blight." Conservative leaning legislators appreciated the grant because it placed a lot of control in the hands of private investors while simultaneously reducing the role of the government. Cities automatically qualified for the grant if they met the requirements, but were required to submit allocation reports (showing to who and where the money was spent) and quarterly reports to the United States Department of Housing and Urban Development. HUD did not keep good records, southern cities in particular spent grant money in affluent neighborhoods. CDBG funds were distributed in such a way as to generate a bias against older (declining) frostbelt cities, cities that were losing population to the sunbelt. This problem was rectified after a bitter dispute in 1978. Compare to Urban Development Action Grants (UDAG).

United States Department of Housing and Urban Development

http://www.hud.gov/offices/cpd/communitydevelopment/programs/