Views on Proposed Revisions to the Regulations Governing the Community Development Block Grant Program

GAO discussed the impact of the Department of Housing and Urban Development's recently proposed revisions to the regulations governing the Community Development Block Grant (CDBG) Program. GAO directed its remarks to proposed changes in the regulation which: (1) eliminate the application review process; (2) may lessen the emphasis on low- and moderate-income benefits; and (3) impair the ability of HUD to evaluate and report on the overall effectiveness of the program. GAO stated that it appears that the proposed changes would make it easier for grantees to shift program benefits away from low- and moderate-income persons. The CDBG Program's primary objective, as stated in its authorizing legislation, is the development of urban communities by providing decent housing and a suitable living environment and expanding economic opportunities, principally for persons of low and moderate income. While the proposed revisions to the CDBG regulations continue to reflect the act's primary objective, they alter relations between the program's purposes in a way which appears to deemphasize the need to target benefits to lower income households. HUD would not review the benefit to lower-income persons of an activity which the grantee categorized as eliminating slums and blight. HUD stated that the proposed regulation changes will provide grantees greater flexibility in administering its programs. Reviews of CDBG programs suggest that program benefits have been reasonably well targeted to lower income persons. However, GAO has identified several problems related to targeting and to the reliability of data used to report program beneficiaries. Adequate program evaluation and management information is needed to support sound program and congressional oversight.