H.R. 6623: Community Development Block Grant Equity Act of 2025

This bill, titled the Community Development Block Grant Equity Act of 2025, aims to update the way federal community development block grant (CDBG) funds are allocated to cities and counties across the United States. Specifically, it revises the funding formula used to distribute these grants, which are typically utilized for various community development projects aimed at improving neighborhoods, supporting public services, and stimulating economic growth.

Key Changes to Allocation Formula

The bill introduces several significant changes to how the Secretary of Housing and Urban Development allocates funds:

• Metropolitan Cities: The allocation for each metropolitan city will be based on a new formula that considers:
  • The poverty rate among families and elderly households.
  • The number of female-headed households with children under 18.
  • The extent of housing built before 1950 that is occupied by low-income families.
  • The level of housing overcrowding.
• Urban Counties: The funding for urban counties will be determined similarly, utilizing the same criteria listed above.
• The bill specifies that the factors are weighted differently in the calculation: poverty rate is counted five times, housing age is counted three times, while the other factors are counted once.

State Allocations

For states, the allocation of funds will also be revised to reflect a formula that factors in:

• The poverty rate in nonentitlement areas (areas not designated to receive direct federal funding).
• The prevalence of female-headed households with children.
• The extent of older housing occupied by low-income families.
• The level of housing overcrowding.

Similar to the metropolitan area allocation, the new formula will weight the poverty rate more heavily in determining the overall funding amounts for each state.

Authorization of Appropriations

The bill sets an authorization amount of $3.425 billion for CDBG funding for the fiscal year 2026. This amount may be adjusted in subsequent years based on changes in the Consumer Price Index for All Urban Consumers (CPI-U). The proposed funding will increase as inflation adjusts the allocated amounts in the following years through 2029.

Definitions Update

The bill also amends existing definitions within the Housing and Community Development Act, simplifying the definition of “poverty” to mean having an income below the established poverty level. Other definitions will be adjusted or removed to streamline the allocation process.

Overall Impact

This bill aims to ensure that CDBG funds are allocated more equitably, with a focus on areas that experience higher levels of poverty and need. The revised formula seeks to direct funds to those areas that may have been underserved by previous allocation strategies, thereby enhancing community development efforts where they are most needed.

Relevant Companies

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