Community Block Grant change means less for city


Another proposed change in a federal housing program, and another potential loss in money for Baltimore.

The change, proposed last week by the Bush administration, would alter the formula used by the Department of Housing and Urban Development to determine the distribution of Community Development Block Grant funds to cities and counties across the country.

The cost to Baltimore if the change goes through: $1.2 million, or about 5 percent of the money it currently receives from the program, according to HUD's own analysis.

That's about equal to the amount of money the city has earmarked from this year's funds to help low-income seniors fix their roofs, assist first-time homebuyers in the purchase of their houses, and help control rats and reduce lead poisoning.

That reduction would be on top of the approximately $3 million drop in funds for the city this year because of cuts in the program -- money the city is making up out of its own funds.

Also, it's separate from the Bush administration's proposal for the federal fiscal year that begins in October to cut overall funding for this 32-year-old community revitalization program by nearly 20 percent, to just under $3 billion.

City Housing Commissioner Paul T. Graziano said he had not seen the projections but called the continued decrease in funds "extremely disappointing, but not surprising."

Since 2002, he said, the city has seen its CDBG funding drop by 25 percent, representing a cumulative loss of $21 million in aid.

"HUD's own data ranks Baltimore in the top 10 percent of needy jurisdictions and demand for housing and community development programs rises yearly, yet our federal resources continue to fall at an alarming rate," Graziano said in an e-mail.

HUD says the change in the CDBG funding formula -- which has remained the same since the late 1970s -- is needed to ensure that federal money goes to the places that need it the most.

"This is about fairness," HUD Secretary Alfonso R. Jackson said in a statement accompanying the introduction in Congress of the Community Development Block Grant Reform Act of 2006. "Communities with the greatest needs deserve more funding compared to relatively less-needy places."

And so the agency wants to modify the formula to exclude poverty rates of post-secondary students and reduce the reliance on the amount of older housing -- elements that it says tend to favor college towns and some more affluent bedroom communities over genuinely troubled urban areas.

Another change in the act would end direct grants to smaller cities, which would have to go through their state governments to get money or join with their surrounding counties. In Maryland, that group includes Annapolis, Bowie, Frederick and Gaithersburg.

The proposal would also seek to hold communities accountable for achieving results with their money. And it would set up a $200 million competitive challenge grant fund that would allow jurisdictions to receive up to an extra 50 percent of their regular allocations -- a potentially good idea. But these competitive grants would not involve new funds, instead taking existing dollars from elsewhere in the program.

The formula for determining funding might well need some tweaking. After all, HUD issued a 216-page report last year saying it did. And under the newly proposed funding formula, such college enclaves as Berkeley, Calif.; Cambridge, Mass.; and Evanston, Ill., would lose at least half of their money if the new formula were applied to current appropriations, according to HUD's calculations.

While no formula is apt to be perfect, this one does seem to leave something to be desired. As Graziano pointed out, Baltimore gets a 10, the highest possible rating, on the agency's needs index. Yet under the new formula, the city would see its allocation drop from $24 million to $22.8 million.

Meanwhile, Sun Belt cities such as Reno, Nev.; Albuquerque, N.M.; and Sarasota, Fla., with need ratings of 6 and 7, would see their allocations rise between 4 percent and 40 percent. That's fairness?

Among the neediest cities, Philadelphia would receive 10 percent more under the new formula, or $40.10 per person; Detroit, 2 percent more, or $44.01 per person; Buffalo, 13 percent less, or $50.65 per person. Baltimore's allocation would be $35.57 per person, a drop of $1.80.

At the risk of sounding like a parochial, pork-barrel congressman, every little loss hurts.

No one claims that the CDBG program has been perfect, or perfectly run. The dispute over a sweetheart deal funded with CDBG money more than a decade ago and given to a developer for a Mount Vernon building is evidence enough. And a strong case can be made that more bang for the buck might be achieved by funding fewer programs concentrated in certain areas, instead of spreading the money on a wide array of programs through the city.

But there's no doubt that it has helped fund important programs, in and out of government. In Baltimore, nearly a quarter of the money goes to repay leveraged federal loans that helped launch such signature programs as the East Baltimore redevelopment initiative centered around the biotech park.

The city's current CDBG funding is about at the same level it was in the late 1980s and early 1990s -- and down drastically from its peak of $44 million in 1978.

The timing -- as well as the degree -- of federal government disinvestment is particularly unfortunate. The city is not only showing tangible signs of rebounding from decades of decline; it is also benefiting from powerful demographic and economic tailwinds, such as the increasing number of empty-nesters and the relative affordablity of city housing.

It's a time, and environment, when federal money, appropriately used, can go a long way. It's not the time to reduce dollars -- through budget cuts or, more stealthily, through changes in funding formulas.

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