To protect funding for the Community Development Block Grant Program (CDBG) and the Home Investment Partnerships Program (HOME), NACo stepped up efforts to inform Administration officials of the importance of these two programs to local governments. NACo, in conjunction with four other national associations, testified before the Subcommittee on Housing and Community Opportunity in the U.S. House of Representatives on May 22.

Randy Patterson, executive director of the Lancaster County (Pa.) Housing and Redevelopment Authorities, testified before the Financial Services Subcommittee, chaired by Rep. Marge Roukema (R-N.J.). The hearing was convened to discuss housing affordability issues.

Patterson’s testimony highlighted the need for more affordable housing and commented on the effectiveness of HOME and CDBG in expanding affordable housing opportunities and neighborhood revitalization activities. Cumulative data compiled by the U.S. Department of Housing and Urban Development (HUD) illustrates that most HOME funds have been used to create housing for very-low-income people and extremely low-income people since the program’s inception in 1990.

Funding is used for the construction and rehabilitation of housing, down payment and closing cost assistance to help families become home owners, and gap financing for investment projects.

Patterson also noted that the 27-year-old CDBG program is the most successful federal domestic program. The flexibility provided through continuous annual appropriations provides local governments with an invaluable resource to address local housing and neighborhood revitalization needs. HUD’s most recent annual report to Congress states that between FY93 and FY96, an estimated 14 million–17 million households benefited from the CDBG funding. In addition, more than 114,799 jobs were created through CDBG-funded economic development activities.

Patterson also stressed the importance of the Low-Income Housing Tax Credit Program, tax-exempt private activity bonds and homeless housing assistance programs. All those testifying urged the committee to increase funding for CDBG and HOME and provided examples of why local governments need CDBG, HOME and additional resources to address housing challenges in their communities. NACo has joined a coalition that will focus efforts on Capitol Hill to raise awareness on CDBG and HOME funding issues.

The testimony noted NACo’s opposition to H.R. 1191, the Community Development Block Grant Reform Act. Introduced by Rep. Carrie Meek (D-Fla.), the bill is designed to amend the CDBG program through the implementation of new targeting requirements for CDBG activities. Among other things, the bill increases the amount of funding that must benefit low - and moderate - income persons from 70 percent over three years to 80 percent over three years.

In addition, 40 percent of that amount must benefit low-income persons with income at or below 52 percent of the area median income. Moreover, the proposed legislation does not permit low - and moderate-income benefit credit for activities undertaken in areas that are not primarily residential in character.

The net effect of these and other provisions in the legislation is to diminish the flexibility local governments currently enjoy under the CDBG program. NACo joined a coalition formed to defeat passage of this bill and will continue efforts to preserve local governments’ flexibility and funding options under the CDBG program.