CDBG: How HUD Offers a Hand Up

By Heidi Aggeler, Managing Director with BBC Research & Consulting

This column was originally published in the American Planning Association Housing and Community Development Division newsletter.


The poster child—or, um, poster senior?—of news articles expressing concern over the President’s proposed cuts to HUD was a little old lady receiving her lunch from Meals on Wheels.

The chance that the President’s budget could take away that little old lady’s lunch led to a great debate about whether or not Meals on Wheels—and similar programs—could survive without the Community Development Block Grant, or CDBG, which is currently on the chopping block. Not to worry, say many conservatives: Meals onWheels and other similar programs would likely be continued through private sector donations.

And that may be true. The private sector is very good at providing charitable, Hand Out, programs. Giving money to the disadvantaged makes people and business owners feel good. It’s also pretty good PR. There is a decent chance the private sector will step in and continue programs like Meals on Wheels—at least until another cause catches their attention.

Those arguing for elimination of CDBG also say that it isn’t effective in providing services to the most needy. One of the reasons that this may be true is because federal regulations limit the amount of CDBG that can be used for charitable programs to 15 percent of total funds. CDBG isn’t a major player in Hand Out programming simply because it isn’t allowed to be.

So…if CDBG isn’t really in the Hand Out business, what exactly does CDBG do? The real value in CDBG in its Hand Up effect.

By “Hand Up” I mean the infrastructure that leads positive economic outcomes. Outcomes like better educated and well trained workers. Stable housing. Safe neighborhoods. Thriving rural Main Streets.

In this realm, the public sector is simply better equipped than the private sector. Although the private sector has good intentions, the PR benefits of influencing the hot issue of the day far outweigh the practical side of community needs. Should I fund a program that provides computers to children of new immigrants or make façade improvements to Main Street in rural Indiana? The former is much more newsworthy.

We have all needed a Hand Up at some point in our lives. Think about that teacher, coach, parent, neighbor, admissions committee member. Someone believed in us at some point in time and, because of this, we believed in ourselves. Ben Carson had his mother; Barack Obama had his grandparents; Donald Trump had dad. Many children don’t benefit from family support and need to find this elsewhere—through an afterschool computer programming class, or by connecting with a mentor at a community center.

How does CDBG provide a Hand Up? Across the country, CDBG has funded the construction of community centers for at-risk youth, early childhood education centers, and education and training facilities—all places where the connections happen that deliver Hand Ups. In rural areas, CDBG funds the public infrastructure improvements that lead to economic development and support the longevity of small towns—a Hand Up. CDBG provides loans to small business owners to jump start their expansion. Hand Up.

CDBG is also responsible for the existence of housing and community planning departments across the U.S. This is not an area where the private sector will—or should—take the lead.

The civil servants who work for these departments worry about the things that are key to all of the things we value in America—safe, stable housing, good schools, economic achievement. They make sure that police officers and teachers can afford to buy a home, that quality schools are available throughout a community, that persons with disabilities have the same access to community amenities as those who are fully-abled. These are the real reasons that communities change for the better and that people can access economic opportunity.

HUD doesn’t exactly have a stellar reputation for creating programs that lead to positive economic outcomes…once there was redlining, and concentrating public housing.

Yet in CDBG—HUD has this one right.


Heidi Aggeler is a Managing Director with BBC Research & Consulting and leads the firm’s housing practice. Ms. Aggeler has more than 16 years of experience conducting economic analyses of housing markets. She is a nationally recognized expert in fair housing research and has managed the completion of several high-profile fair housing studies.

Prior to joining BBC, Ms. Aggeler worked for the Federal Reserve Bank of Minneapolis where she researched economic conditions for the Ninth District of the Federal Reserve System. Before joining the Fed, Ms. Aggeler conducted fair lending audits of financial institutions for the Federal Deposit Insurance Corporation (FDIC).

Ms. Aggeler has been invited to speak about her work at conferences held by HUD, the American Planning Association (APA), the American Institute of Architects (AIA) and the Colorado Civil Rights Division. Ms. Aggeler is a current member of the Denver Planning Board.


Articles in “From the Field” represent the opinions of the author only and do not represent the views of the Community Builders Network of Metro St. Louis or the University of Missouri-St. Louis.

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