HUD Allocates $1 Billion In Recovery Act Funding To Support State And Local Community Development

CDBG funding designed to build critical infrastructure and create jobs

May 5, 2009 -- WASHINGTON - In an effort to stimulate community development and job growth, U.S. Housing and Urban Development Secretary Shaun Donovan today allocated $1 billion in funding to nearly 1,200 state and local governments through the American Recovery and Reinvestment Act of 2009 (Recovery Act). These grants will be provided through HUD's long-standing Community Development Block Grant (CDBG) Program and will primarily benefit low- to moderate-income persons living in these communities.

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CDBG enables state and local governments to undertake a wide range of activities intended to create suitable living environments, provide affordable housing and create economic opportunities. Under the Recovery Act, recipients shall give priority to prudent projects that can award contracts based on bids within 120 days of the grant agreement.

"Today, we make another investment in the economic recovery of our cities, counties and states," said Donovan. "President Obama and I are anxious to put this money to work for long-term, sustainable community development. And like this Administration, American taxpayers expect these funds to be spent prudently so they can quickly contribute to America's economic revitalization and growth."

President Obama directed all Recovery Act funding to be spent responsibly and in a transparent manner in order to provide a necessary economic boost, create jobs, and strengthen America's middle class. With today's announcement, HUD is reminding CDBG grantees that while the program has historically supported a wide variety of public improvements, the Recovery Act prohibits certain activities including "any casino or other gambling establishment, aquarium, zoo, golf course, or swimming pool."

In a letter to CDBG recipients of Recovery Act funds, Donovan wrote, "In accepting these funds, it is imperative that you be good stewards of these precious taxpayer dollars by focusing your efforts on the Recovery Act goals of investing in infrastructure that will create or sustain jobs in the near-term and generate maximum economic benefits in the long-term."

Since 1974, CDBG has provided more than $123 billion to state and local governments to target their own community development priorities. The rehabilitation of affordable housing and the construction and improvement of public facilities have traditionally been the largest uses of CDBG funds although the program is also an important catalyst for job growth and business opportunities. Annual CDBG funds are distributed to communities according to a statutory formula based on a community's population, poverty, and age of its housing stock, and extent of overcrowded housing.

Source: HUD