Where Does the Bucket Leak? Sending Money to the Poor Via the Community Development Block Grant Program

Housing Policy Debate, Virginia Polytechnic Institute and State University, Vol. 24, No. 1, 119-171, 2014

Posted: 17 Apr 2016

See all articles by Leah Brooks

Leah Brooks

George Washington University - Trachtenberg School of Public Policy and Public Administration

Maxim Sinitsyn

University of California

Date Written: November 1, 2013

Abstract

Since the inception of the Community Development Block Grant (CDBG) program in 1975, cities and large urban counties have been entitled to funding based on a formula designed to approximate community need. As with any such federally funded and locally administered program, there is a tension between federal and local control. At the federal level, one of CDBG’s main goals is to benefit low- and moderate-income (LMI) people and places. While a substantial literature assesses how well CDBG funds are targeted to needy recipient jurisdictions, evidence on how funds are distributed within recipient jurisdictions is much more limited. In this article, we examine the distribution of CDBG funds relative to the share of LMI people at the council-district and neighborhood levels in Chicago, Illinois, and Los Angeles, California, for 1998 – 2004. In Los Angeles, we find that relatively poorer council districts receive more than they would were funds distributed following the share of LMI people. In contrast, Chicago’s relatively poorer council districts receive lower funding than predicted by their share of the LMI population. This difference across council districts within the cities is partially explained by the greater sensitivity of allocations in Chicago to the location of high-income households. Despite these disparities, policy answers are not obvious; any policy that aims to enhance CDBG’s reach to LMI people must contend with the erosion of broad-based political support that this would engender.

Keywords: CDBG; Community Development Block Grant; Economic Development; Neighborhood

Suggested Citation

Brooks, Leah and Sinitsyn, Maxim, Where Does the Bucket Leak? Sending Money to the Poor Via the Community Development Block Grant Program (November 1, 2013). Housing Policy Debate, Virginia Polytechnic Institute and State University, Vol. 24, No. 1, 119-171, 2014, Available at SSRN: https://ssrn.com/abstract=2752038

Leah Brooks (Contact Author)

George Washington University - Trachtenberg School of Public Policy and Public Administration ( email )

805 21st Street, NW
Suite 601
Washington, DC 20052
United States

Maxim Sinitsyn

University of California ( email )

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