Community Development Block Grant (CDBG)
What is CDBG?
Through the US Department of Housing and Urban Development (HUD), the Community Development Block Grant (CDBG) Entitlement Program provides annual grants on a formula basis to entitled cities and counties to develop viable urban communities by providing decent housing and a suitable living environment, and by expanding economic opportunities, principally for low- and moderate-income persons.
The program was signed into law in 1974 in order to provide local communities the flexibility to decide for themselves how best to meet their own community development needs.
In order to receive CDBG funds, government grantees must develop a 5-year Consolidated Plan that provides a vision for housing and community development in the jurisdiction. The plan describes community needs, resources and priorities; sets goals; and establishes strategies to meet those goals.
In prior years, the City of Bloomington and Town of Normal have independently developed and submitted separate Consolidated Plans. In response to the 2017 Regional Housing Study and HUD's emphasis on inter-jurisdictional coordination, Bloomington and Normal partnered with the McLean County Regional Planning Commission to develop a joint Consolidated Plan (2020-2024) for the first time. While the jurisdictions receive their own funding allocations, the alignment of goals and strategies allows the funds to make a bigger impact on the shared housing and community development priorities of the region.
While many aspects of the Consolidated Plan have been addressed in recent planning efforts (Comprehensive Plans, Regional Housing Study), HUD requires information to be presented and submitted in a certain way in order to receive annual funding allocations. The Consolidated Plan is complementary to other planning efforts and aligns with identified implementation strategies.
As part of the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act, the City of Bloomington and Town of Normal will be receiving a special, additional allocation of Community Development Block Grant (CDBG) funding for Program Year 2020-2021. These funds, referred to as CDBG-CV (Coronavirus), are granted through the U.S. Department of Housing and Urban Development (HUD) and are to be solely used to prevent, prepare for, and respond to the coronavirus (COVID-19).
Public Outreach Analysis
Public outreach for the jointly developed 2020-2024 Consolidated Plan began in Fall 2018 with the Citizen Participation Plan and continued through July 2019. It included a public survey, a stakeholder survey of government agencies and nonprofits, stakeholder focus group meetings, and two public meetings, one in Bloomington and one in Normal. The following documents take an in-depth look at the results of these outreach efforts from a regional perspective, as well as for Bloomington and Normal individually.
An addendum was also prepared to examine the results of outreach conducted after the original survey window closed.
Analysis of Impediments to Fair Housing
As part of the Consolidated Plan, all grantees must certify that they will affirmatively further fair housing, which means conducting an Analysis of Impediments to Fair Housing Choice (AI), taking appropriate actions to overcome the effects of any impediments identified through that analysis, and keeping records of these actions. The Fair Housing Act protects people from discrimination when they are renting or buying a home, getting a mortgage, seeking housing assistance, or engaging in other housing-related activities. Discrimination is prohibited on the basis of race, color, religion, national origin, sex and gender, physical or mental disability, and familial status.
Both the City of Bloomington and Town of Normal have updated their Analysis of Impediments to Fair Housing using data and feedback gathered throughout the Consolidated Planning process.
CDBG funds may be used for activities which include, but are not limited to:
• Acquisition and disposition of real property
• Relocation and demolition
• Rehabilitation of residential and non-residential structures
• Homeownership assistance
• Construction of public facilities and improvements, such as water and sewer facilities, streets, neighborhood centers, and the conversion of school buildings for eligible purposes
• Public services, within certain limits (maximum 15% of yearly allocation)
• Loss of rental income
• Planning and capacity building
• Code enforcement
• Activities relating to energy conservation and renewable energy resources
• Activities related to privately-owned utilities
• Provision of assistance to profit-motivated businesses to carry out economic development and job creation/retention activities
Generally, the following types of activities are ineligible:
• Acquisition, construction, or reconstruction of buildings for the general conduct of government
• Political activities
• Purchase of equipment
• Operating and maintenance expenses
• Certain income payments
• Construction of new housing (with some exceptions)
The map below shows the low- and moderate-income block groups (FY 2021) in Bloomington-Normal where Area Benefit Activities are eligible.
Each activity must meet one of the following national objectives for the program: benefit low- and moderate-income persons, prevention or elimination of slums or blight, or address community development needs having a particular urgency because existing conditions pose a serious and immediate threat to the health or welfare of the community for which other funding is not available. At least 70% of the funding must be used to meet the low- and moderate-income objective.
Activities that benefit low- and moderate-income persons fall into four categories:
• Area benefit activities- activities that benefit all residents in a particular area where at least 51% of the residents are low- and moderate-income persons (ex-street improvements, neighborhood facilities)
• Limited clientele activities- activities that are designed to exclusively serve one or more groups of clientele, as long as at least 51% of those served are low- to moderate-income (ex-homeless services or senior services)
• Housing activities-activities that provide or improve permanent residential structures to be occupied by low- and moderate-income households. In structures with 3 or more units, low- and moderate-income households must occupy at least 51% of the units. (ex- downpayment assistance, rehabilitation assistance for homeowners)
• Job creation or retention activities-activities that are designed to create or retain permanent full-time jobs, at least 51% of which will be made available to, or held by, low- and moderate-income persons. (ex- loans to pay for the expansion of a plant or factory; and assistance to a business to prevent closure and a resultant loss of jobs for low- and moderate-income persons)
As mentioned above, at least 70% of the yearly CDBG allocation must be used for activities that benefit low- an moderate-income persons. In addition, up to 20 percent of each year’s CDBG grant plus program income can be obligated for planning and administrative costs, and up to 15 percent of each program year’s entitlement grant plus 15 percent of the preceding year’s program income can be used for public service activities.
CDBG funds are allocated on a formula basis. Each year, CDBG funds are distributed to state and local governments according to their population, poverty, and other housing variables.
The City of Bloomington and Town of Normal have each received annual allocations of CDBG funding since 1975. Just as the federal appropriations for the program have ebbed and flowed over the years, so have the allocations received by the City and Town. For example, the City of Bloomington received $2.1 million in CDBG funds in 1975, and only $552,428 in 2018.
Annual funding priorities are set by each community, subject to HUD eligibility, based on identified needs and priorities. In recent years, Bloomington and Normal have allocated their funds to a variety of programs, including homeownership assistance, residential rehabilitation and infrastructure improvements.
Citizen Participation Plan
Citizen participation and stakeholder consultation is an essential part of the Consolidated Planning process. The Citizen Participation Plan outlines the guidelines and procedures that allow citizens and stakeholders to help influence the decisions that affect housing and community development in their community.
In preparation for the 2020-2024 Joint Consolidated Plan, the City of Bloomington and Town of Normal partnered with the McLean County Regional Planning Commission to draft an updated Citizen Participation Plan to serve as the guiding document for the engaging the public in the Consolidated Planning and related processes.
As the effects of the pandemic will continue to evolve over time, the plans for the use of CDBG-CV funds must evolve with them. Using the expedited public comment process recommended by HUD and proposed by the Amended Citizen Participation Plan, the plan may be amended at any time to address different or increased needs as they arise.