1. What is the Community Development Block Grant Program?

                       

2. What types of projects can get CDBG funds?

                       

3. But isn't this a program for low-income people?

                       

4. I'm still not sure if my project is eligible.

                       

5. How are the funds distributed?

                       

6. How are funding decisions made?

                       

1. What is the Community Development Block Grant Program?

The Community Development Block Grant (CDBG) Program is a federal program of grants to local governments, administered by the U.S. Department of Housing and Urban Development (HUD). The Housing and Community Development Act of 1974 established CDBG as a replacement for a variety of federal urban renewal, housing, and neighborhood development programs. CDBG was the first of the federal block grant programs.

In Marin County, all eleven cities have signed cooperation agreements to participate with the County government in a single joint CDBG program. This qualifies Marin County as an "urban county," giving us an annual grant allocation established by formula. Marin County administers the CDBG program for all eleven cities, as well as the unincorporated parts of the County. Both government agencies and nonprofit organizations are eligible for funding.

Public Services:

We are permitted to spend up to 15% of our CDBG funds on public services, which are very broadly defined. Some of the public service projects we've funded include day care programs for children and seniors, transportation for special needs groups, counseling programs, social service referrals, senior services, employment assistance, emergency food, educational services, and medical services. However, CDBG funds may not be used to replace cutbacks in local government support for public services. CDBG public service funds should be used for the direct delivery of services, and not for overhead or administration.

But isn't this a program for low-income people?

Yes, even if a project fits one of the eligible categories, it must also pass the low-income benefit test. Most projects qualify if at least 51% of the users will be low-income, as defined by HUD. The income limit for a single-person household is $63,350 and for a family of four it is $90,500. A project meets the standard if at least 51% of the beneficiaries have incomes below the limit, or if it benefits a neighborhood with a high percentage of low-income people.

For housing, if a structure contains two dwelling units, at least one must be occupied by a low-income household. If a structure contains more than two units, at least 51% of the units must be occupied by low-income households. For example, a four-unit building must have three units occupied by low-income households. For this calculation, adjacent rental (not owner-occupied) buildings under common ownership and management may be treated as a single structure. For new construction of multi-family non-elderly rental housing, the requirement is reduced to 20%. Rents for low-income units may not exceed 30% of the tenant's income.

If a project gives scholarship assistance to low-income people, we count only those who actually receive assistance. Facilities and accessibility improvements for the elderly or for people with disabilities are automatically eligible. As a substitute for low-income benefit, projects may also qualify if they eliminate slums or blight or meet emergency needs, but the regulations make it extremely difficult to qualify under these categories.

2. What types of projects can get CDBG funds?

CDBG funds can be used for three general types of projects that assist low-income people: housing, capital, and public service projects.

Housing:

Eligible housing activities include housing rehabilitation, acquisition of existing housing, acquisition of sites for housing construction, off-site improvements needed for housing development, fair housing services, and housing planning and predevelopment costs. While CDBG funds can support housing development by paying for property acquisition, off-site improvements, or predevelopment costs, CDBG funds cannot ordinarily be used directly for housing construction itself. Types of housing projects we've funded include low-cost rental and ownership housing, senior housing, group homes, housing for people with physical and mental disabilities, homeless shelters, owner-built housing, and shared housing.

Capital:

Eligible capital projects include most types of public facilities and community facilities, such as community centers, senior centers, centers for people with disabilities, day care centers, parks, recreation facilities, public works, buildings that house public services, and removal of architectural barriers which limit accessibility. This category also includes economic development activities.

Public Services:

We are permitted to spend up to 15% of our CDBG funds on public services, which are very broadly defined. Some of the public service projects we've funded include day care programs for children and seniors, transportation for special needs groups, counseling programs, social service referrals, senior services, employment assistance, emergency food, educational services, and medical services. However, CDBG funds may not be used to replace cutbacks in local government support for public services. CDBG public service funds should be used for the direct delivery of services, and not for overhead or administration.

3. But isn't this a program for low-income people?

Yes, even if a project fits one of the eligible categories, it must also pass the low-income benefit test. Most projects qualify if at least 51% of the users will be low-income, as defined by HUD. The income limit for a single-person household is $63,350, and for a family of four it is $90,500. A project meets the standard if at least 51% of the beneficiaries have incomes below the limit, or if it benefits a neighborhood with a high percentage of low-income people.

For housing, if a structure contains two dwelling units, at least one must be occupied by a low-income household. If a structure contains more than two units, at least 51% of the units must be occupied by low-income households. For example, a four-unit building must have three units occupied by low-income households. For this calculation, adjacent rental (not owner-occupied) buildings under common ownership and management may be treated as a single structure. For new construction of multi-family non-elderly rental housing, the requirement is reduced to 20%. Rents for low-income units may not exceed 30% of the tenant's income.

If a project gives scholarship assistance to low-income people, we count only those who actually receive assistance. Facilities and accessibility improvements for the elderly or for people with disabilities are automatically eligible. As a substitute for low-income benefit, projects may also qualify if they eliminate slums or blight or meet emergency needs, but the regulations make it extremely difficult to qualify under these categories.

CDBG Income Limits:

4. I'm still not sure if my project is eligible.

Call us! We encourage all potential applicants to contact the CDBG staff before submitting an application. There are many more eligibility requirements than we could summarize here. Generally, construction expenses for new housing, furnishings, maintenance, and income payments are ineligible, but there are exceptions. Staff can tell you whether your project, or a part of your project, is eligible.

5. How are the funds distributed?

Marin County will receive about $1.8 million this year. After subtracting administrative expenses, the funds are divided so that 40% goes to housing on a countywide basis and the remaining 60% goes to six local planning areas for housing, capital, and public service projects. At least 30% of each planning area's funds must be used for housing.

6. How are funding decisions made?

In November, staff holds a workshop during which we explain the CDBG regulations, talk to potential applicants, and learn what the public sees as priorities.

Applications are due at the Marin County Community Development Agency at 5:00 pm, on Friday, December 10, 2004. In late December, CDBG staff begins reviewing applications, requesting additional information if needed, and making staff recommendations about which projects should be funded. (City of San Rafael staff will review applications for San Rafael Planning Area funds.)

Typically, the requests for CDBG assistance total more than three times the amount of funds available. Because of the competition for limited funds, many applicants cannot be recommended for funding and many are recommended for funding at less than the amounts they requested. Competition is most intense in the public service category.

Most planning areas have a Local Area Committee, consisting of a County Supervisor from that area and one City or Town Council member from each of the cities and towns within the area. During January, February, and March, each of the Local Area Committees holds a hearing to make recommendations for the use of planning area funds. The San Rafael City Council now serves as the Local Area Committee for the San Rafael Planning Area, and San Rafael Planning Area funds now include San Rafael's share of CDBG Countywide Housing funds.

The Countywide Priority Setting Committee, consisting of one County Supervisor and a representative from each of the City and Town Councils, then holds a hearing to consider the recommendations made for the local planning area funds, and to make the initial recommendations for Countywide Housing funds.

Then, in early May, the Board of Supervisors holds a final public hearing on all the recommendations of the Countywide Priority Setting Committee for both planning area and countywide housing funds. In mid-May, the County sends its annual list of projects to the U.S. Department of Housing and Urban Development.

For more information, call the CDBG staff.