The New Federal Housing and Community Development Legislation

George Dinges, Chief of the Office of Research and Planning, Department of Local Government Affairs

On August 22, 1974, the federal Housing and Community Development Act was signed into law. The new legislation is broadly-based and incorporates federal funding support for a range of community development activities, housing programs, and planning and management efforts.

One key feature of the legislation is the community development block grant program. Several categorical grant programs of the federal Department of Housing and Urban Development are consolidated into a single community development block grant approach. For example, communities would no longer prepare a separate application for a HUD water grant, sewer grant, or open space funds. Rather, communities would apply for a single community development block grant that could be used for a number of locally determined purposes.

A total of $2.5 billion in federal funds has been authorized for the first year of the community development block grant program. Some highlights include:

• The primary objective of the community development block grant program is the development of viable communities by providing decent housing and a suitable living environment and the expanding of economic opportunities, principally for persons of low and moderate income.

• The following HUD programs are consolidated into the new block grant approach: model cities; urban renewal, including neighborhood development program; water and sewer, open space land; public facility loans; neighborhood facilities; and rehabilitation loans.

• The community development funds can be used for a broad-range of locally determined activities, including, among others: acquisition of real property which is blighted or deteriorated; acquisition or construction of water and sewer facilities, parks, playgrounds, and recreation facilities; code enforcement in deteriorating areas; and improving public services and facilities, including those concerned with employment, child care, drug abuse, or recreation needs of persons.

• Eighty percent of the funds are earmarked for metropolitan areas, twenty percent for non-metropolitan areas.

• Cities of more than 50,000 in population and specifically defined urban counties are entitled to funding, assuming application requirements are met.

• Local governments that received certain HUD funds in the past, e.g., for urban renewal or model cities programs, would receive a calculated amount of community development funds, being "hold harmless" local units.

• Other local governments can apply for discretionary funds that are available.

• There are no local matching requirements for the receipt of the funds.

The federal Housing and Community Development Legislation will have a major impact upon Illinois communities. For example: 1) the consolidation of a number of previously separate grant programs into a block grant program will alter and simplify grant application procedures; 2) local governments will be given greater flexibility and discretion in the employment of federal funds; and 3) local governments will be required to assume a greatly increased role in identifying overall community development needs, establishing priorities, and allocating resources.

Park districts in Illinois, also, will be affected by the new legislation. Most immediately, HUD no longer will have a separately funded open space grant program. Again, the new federal Housing and Community Development Legislation authorizes funding for a range of community development activities, open space and recreational programs being one of those activities. Local governments will have to make the final determination as to the expenditure of the funds, park districts not being eligible to apply for the HUD funding. As such, park districts will be required to strengthen their working relationships with local governments, helping to assure that open space and recreational needs are recognized and incorporated into the shaping of community development strategies.

Illinois Parks and Recreation 15 November/December, 1974