As the Community Development Block Grant (CDBG) Program Provides $35 Million to $51 Million to Assist Homeless Persons, Congress Should Maintain or Increase CDBG Funding for FY2017

U.S. Department of Housing and Urban Development (HUD) programs are currently funded for Fiscal Year (FY) 2017 through April 28 through two continuing resolutions, Pub. L. No. 114-223 and Pub. L. No. 114-254, at FY 2016 appropriated levels, including for Homeless Assistance Grants and other Community Planning and Development programs, with exceptions to provide sufficient funding to renew rental assistance for Public and Indian Housing Tenant-Based Rental Assistance and an additional $1.8 billion for Community Development Block Grant Disaster Relief (CDBG-DR) funding.

According to a Congressional Budget Office (CBO) report, in the Bipartisan Budget Act of 2015, Congress set the overall level of defense funding and non-defense discretionary funding for FY2017 at $551 billion and $518.531 billion, which are levels that are slightly higher than the FY2016 levels of $548 billion and $518.491 billion.  With similar overall caps for FY2016 and FY2017, funding for HUD programs should slightly increase in FY2017.  In extending the continuing resolution for FY2017, Congress should maintain or slightly increase the FY2016 funding enacted in Pub. L. No. 114-113 of $3.0 billion for the Community Development Block Grants (CDBG) program.

Instead, on March 16, President Trump submitted an appropriations request to Speaker of the House Paul Ryan that recommended Congress increase defense spending by $30 billion and reduce non-defense discretionary spending by $18 billion in FY2017 and on March 24, the Administration sent a memorandum to the House and Senate appropriations committees proposing to reduce the CDBG program by half from $3.0 billion to $1.5 billion in order to reduce the non-defense discretionary spending by $18 billion.

According to the Administration memorandum, the reasoning behind the Trump Administration’s proposal to reduce the CDBG funding for FY2017 by half is that no grants have been awarded yet for the fiscal year and the program is unauthorized and the program has been challenged to demonstrate its effectiveness given the breadth of the activities it can support.  In recommending that funding for the CDBG program only be reduced for wealthier communities that have per capita income greater than 105 percent of the national average, the CBO noted the rationale for the CDBG program as meeting national needs that some local governments cannot address adequately and may not justify redirecting money to wealthier communities and that dropping wealthier communities from the CDBG program could reduce efforts to aid low-income households within those communities unless local governments reallocated their own funds to offset the lost grants.  This indicates that enormous across-the-board funding reductions for the CDBG program are not appropriate.

The determination that enormous across-the-board funding reductions are not appropriate is supported by looking at the number of people assisted and the projects funded by the CDBG program.  With between $1.06 billion and $1.29 billion expended on public improvements and between $344 million and $445 million expended on public services to assist the general public and vulnerable populations such as children, seniors, and abused adults and children, more than $35.1 million to $51.7 million has been expended to assist homeless persons during each of the pasts five years from FY2012 through FY2016.

During Program Year 2014, the most recent year for which data are publicly available, 400,000 homeless persons were assisted.  Homeless persons were assisted in more than 350 communities in all 50 states and the District of Columbia.  In some of these communities, more than 10 percent and upwards of more than half of the total CDBG funding for the community was spent on operating funds for or on the construction or rehabilitation of homeless facilities.  Approximately two-thirds of the funding was used for operating costs for the operation of programs for homeless persons and AIDs patients such as staff costs, utilities, maintenance, and insurance and the other one-third was used for the acquisition, construction, or rehabilitation of homeless facilities.  With any significant reduction in the funding level of the CDBG program, funding to assist homeless persons could be greatly reduced or entirely eliminated with hundreds of thousands of people at risk of sleeping on the streets or not receiving assistance, especially in communities that are not able to increase local funding to respond to federal funding reductions.

With the critical importance of CDBG funding to respond to the varying needs of people in local communities and its role in providing significant operating and capital funding for homeless facilities, Congress should maintain or increase funding for the CDBG program for the remainder of FY2017.