The Equity Factor

What Happened to Federal Funding for Community Development?

New tool offers insight and suggests a plan to reverse a dramatic downward trend in CDBGs.

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In 2012, three St. Louis community development corporations (CDCs) decided to explore merging. The Shaw Neighborhood Housing Corporation, Grand Oak Hill Community Corporation and Southwest Garden Housing Corporation had each been active in adjacent neighborhoods of south St. Louis for decades, purchasing properties, developing or rehabbing them into affordable housing and commercial and community spaces. Typical CDC stuff.

As with most mergers, there were multiple reasons to do so, but perhaps the most pressing was the dramatic fall in public funding that historically supported CDCs. Cumulatively among the region’s CDCs surveyed in 2011, half of their total collective income came from government sources. These three CDCs were no exception.

According to a February 2016 case study documenting the merger, “SNHC, GOHCC and SGHC agreed that they had an immediate need to come together to increase their capacity to deliver on initiatives and compete for CDBG (community development block grant) dollars under the new process established in 2013. The merger was official in 2014, creating the Tower Grove Neighborhood CDC.

The state of Missouri has experienced $39 million in budget cuts to CDBG funding since 2010. The new process the case study refers to requires more scrutiny and other reforms, and was merely an aftereffect of reduced CDBG funding distribution.

St. Louis and Missouri aren’t alone: No state has been spared cuts to CDBG funding; overall, the source has been cut by $2.5 billion since 2010, and cut in half since 2000. That’s a huge loss of a once steady and reliable source of funding for CDCs around the country. Now, a new policy tool offers insight into how they might reverse that trend.

“Hearings are a gold standard for whether Congress is interested in something,” says Bryan Jones, who focuses on congressional studies at the University of Texas at Austin. If you want to gauge public interest, he explains, you could look at press coverage, bills introduced in Congress, how many times a president mentions something in speeches. “But Congress has to go through a lot of trouble to schedule a hearing. If it’s just going to be of transient interest, they’re not going to do that.”

Jones directs the Comparative Agendas Project, which monitors policy processes by tracking the actions that governments take in response to the challenges they face. These activities can take many different forms, including debating a problem, delivering speeches, holding hearings, introducing or enacting laws, or issuing judicial rulings.

The Comparative Agendas Project website, launched earlier this month, features a tool that allows users to examine trends in public policy activity over time. The exact number ebbs and flows, but since the 1990s, U.S. Congressional Committees have held around 1,500 hearings a year. According to the project’s categorizing of hearings, since 1994, around 20 hearings a year have dealt in some way with the Department of Housing and Urban Development, which administers CDBGs.

Even more precisely, CDBGs came up as hearing discussion topics in just 13 different years since 1975, usually once or twice each year and no more than six times in a single year, for a grand total of 25 congressional hearings on CDBGs since 1975. That’s 25 times Congress has had a hearing about CDBGs in the past 40 years, out of thousands upon thousands of hearings.

The trend line isn’t good either.

“You can see after Republicans take control in the early 1990s, there’s some interest in cities, but drops off pretty quickly,” Jones notes.

Congressional hearings that may have touched in some way on Department of Housing and Urban Development funding and programming, including CDBGs (Credit: Comparative Agendas Project)

Even under President Barack Obama’s administration, CDBGs have been a congressional hearing topic only once, and in that instance as a form of disaster relief (not long-term urban development, which most CDCs focus on). That’s a stark contrast from the 1960s and 1970s, even through the 1980s, when hearings on urban development were more frequent. The last three consecutive years in which CDBGs were topics of congressional hearings: 1975-1977.

A strategic response to CDBG funds vanishing, Jones explains, is a bit paradoxical: Suggest problems as hearing topics more frequently, and with greater specificity. It’s about the process. Advocates could help with logistics as well, holding more gatherings of mayors or other urban leaders in Washington, D.C., and trying to coordinate hearing schedules around such gatherings. The few CDBG hearings since 2000 have addressed specific impact in NYC, L.A., Ohio and even one on Missouri.

Suggesting city-level or state-level hearings about urban issues can be one way to get past the partisan challenge of Democrats in the minority representing urban areas and Republicans in the majority representing everywhere else. If you can be effective in getting Congress to talk about problems, Jones says, he has seen time and again that is the best way to get to solutions.

“If you don’t raise a problem, you won’t get a solution. Just pressuring people isn’t as effective,” he adds. “You don’t even need to ask for money, or a specific bill at first, just ask Congress to look into it. The same thing could be done at the state level. It’s important to grasp how important these inputs are to the system.”

The Equity Factor is made possible with the support of the Surdna Foundation.

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Oscar is Next City's senior economic justice correspondent. He previously served as Next City’s editor from 2018-2019, and was a Next City Equitable Cities Fellow from 2015-2016. Since 2011, Oscar has covered community development finance, community banking, impact investing, economic development, housing and more for media outlets such as Shelterforce, B Magazine, Impact Alpha and Fast Company.

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Tags: congresscommunity development corporationscommunity development block grants

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