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Assessing the Allocation of CDBG to Community Development Need

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  • Robert A. Collinson

Abstract

This article evaluates how well the current allocation formula for the Community Development Block Grant (CDBG) program allocates funds with respect to community development need. We assemble an index of community development need from a variety of demographic and economic indicators which capture the components of need that can be addressed directly by the CDBG program based on its statutory objectives. We use this index to estimate the relation between funding levels and community development need and how this relation has changed over time. In particular, we assess the effectiveness of targeting by examining the horizontal and vertical equity of the formula. Results suggest that the relation between the formula data inputs and community development need has deteriorated over the past two decades. The present formula is shown to underfund Formula A grantees conditional on need and to overfund a select number of high-income, slow-growth, older communities. Finally, we consider several alternative formula specifications, which we evaluate against the community development needs index.

Suggested Citation

  • Robert A. Collinson, 2014. "Assessing the Allocation of CDBG to Community Development Need," Housing Policy Debate, Taylor & Francis Journals, vol. 24(1), pages 91-118, January.
    • Handle: RePEc:taf:houspd:v:24:y:2014:i:1:p:91-118
    DOI: 10.1080/10511482.2013.854945
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    Cited by:

    1. Varady, David P. & Kleinhans, Reinout & van Ham, Maarten, 2015. "Community Entrepreneurship in Deprived Neighbourhoods: Comparing UK Community Enterprises with US Community Development Corporations," IZA Discussion Papers 8777, Institute of Labor Economics (IZA).
    2. David S. Lucas, 2017. "The Impact of Federal Homelessness Funding on Homelessness," Southern Economic Journal, John Wiley & Sons, vol. 84(2), pages 548-576, October.

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