We Call on Congress to Provide at least $4.2 Billion for CDBG in FY 2026

We, the undersigned national, state, and local organizations urge Congress to provide at least $4.2 billion for the CDBG program in FY 2026. For five decades, CDBG has been the most effective and flexible tool used by states and localities to support infrastructure, affordable housing, tackle economic distress, and address a wide array of community needs. The program’s current funding level of $3.3 billion is not sufficient to meet increased program needs and costs.

CDBG Impacts the Nation

CDBG reaches every corner of the country from urban cities to rural towns and populations in between. Nearly 1,250 state and local governments receive annual CDBG allocations to support housing rehabilitation programs, public infrastructure projects, small business assistance, and a broad range of public service programming.

From FY2005 to FY2024, CDBG facilitated the creation and retention of 581,495 economic development related jobs, contributed to infrastructure developments benefiting over 59 million persons, assisted over 204 million persons through public service activities, and met the housing needs of nearly 2.1 million households.[1]

CDBG Lowers Housing Costs

CDBG helps preserve affordable housing and expand the affordable housing stock. In FY24, CDBG grantees spent over $453 million to rehabilitate single-family owner-occupied homes.[2] This activity preserves affordable housing, addresses unsafe living conditions, lowers housing costs through energy efficiency improvements, allows seniors to age in place, and provides accessibility improvements for people with disabilities. Likewise, CDBG grantees spent over $101 million in FY24 to rehabilitate multifamily properties to provide decent, safe, decent affordable housing to a multitude of renters.[3]

CDBG Builds Critical Infrastructure

As the foundation for commerce, social, physical, and environmental activities, infrastructure maintains a prominent role in community well-being. CDBG contributes extensively to public facilities and improvements (infrastructure). Roads, streets, and other infrastructure improvements connect people to neighborhoods, businesses, parks, services, and jobs.

Communities use CDBG to provide greater accessibility, mobility, and connectivity by funding these improvements. One of the largest investments of CDBG is public utility development specifically for water and sewer improvements as well as stormwater drainage for low- and moderate-income communities.

CDBG Serves Local Communities

CDBG grantees can use up to 15% of their annual allocation for public services to address a wide range of community needs. These services include employment training, meals and other services for the elderly, services for abused and neglected children, aid to local food banks, homelessness prevention, and support for many other community services and agencies. Services are provided by large and small public and private organizations in diverse settings such as schools, community facilities and other venues.

CDBG Drives Economic Success

CDBG economic development activities help communities tackle economic distress, stimulate private investment, and spur business growth. Small businesses are the cornerstone of the American economy and CDBG helps socially and economically challenged small businesses start and grow. Likewise, CDBG investment in large-scale commercial projects leads to area renewal, job creation and retention, and retention or creation of important businesses that serve to anchor a community and provide important services. CDBG has a great return on investment with every dollar of 2022 CDBG funding leveraging an average of $5.02 in local investment.[4]

The Need for Investment

With inflation and stagnant CDBG allocations, the program is not able to assist as many people as in the past. States and local communities often receive more CDBG funding requests than they can accommodate. The cost of materials and labor related to the program’s two major activities, infrastructure and housing rehabilitation, has increased exponentially. And with rising inflation and housing costs, more people need assistance.

For example, seniors need assistance to make emergency improvements to their homes to age in place. With the acute shortage of affordable housing, preservation of affordable housing through single-family and multifamily rehabilitation is essential. Small and rural communities need assistance to install water and sewer upgrades and the rise in homelessness has increased demand for public services.

CDBG often serves as critical gap financing for a wide array of projects and services that are essential to local economies. In FY24 alone, CDBG funding created or retained 11,754 jobs, benefitted more than 7.2 million people through public services and provided public improvements and infrastructure projects for more than 1.8 million people.[5] Investments in CDBG provide support for locally driven projects that otherwise might not be feasible.

CDBG formula grants have never been adjusted for inflation causing diminished resources for communities. The program’s latest appropriated level - $3.3 billion in FY24 is $150 million less than in FY21 and far less than its highest mark of $4.5 billion in FY95. As a result, fewer funds are available to drive local solutions to varying affordable housing and community development challenges.

CDBG has a 50-year record of successful projects, and a broad network of state and local agencies trained to manage community development grants. We call on Congress to provide necessary funding for CDBG by providing at least $4.2 billion for CDBG formula grants in FY 2026. Please feel free to contact Vicki Watson, National Community Development Association, vwatson@ncdaonline.org or Jenna Hampton, Council of State Community Development Agencies, jhampton@coscda.org with any questions. 

1 U.S. Department of Housing and Urban Development, CDBG National Accomplishment Report.

2 U.S. Department of Housing and Urban Development, CDBG National Expenditure Report

3 Ibid

4 U.S. Department of Housing and Urban Development, FY25 Congressional Justification

5 U.S. Department of Housing and Urban Development, By the Numbers FY23