Analyzing a Community Development Needs Index

Established in 1974, the Community Development Block Grant (CDBG) formula program at the U.S. Department of Housing and Urban Development (HUD) has allocated roughly $116 billion1 through fiscal year (FY) 2006 to cities, counties, and states to make improvements to distressed communities and improve the living conditions for low- and moderate-income households. The funds are allocated through a dual formula that was first fully implemented in 1981. The formula has remained substantially unchanged for 25 years. In 1976, 1979, 1983, 1995, and 2005, HUD developed indexes of community development need to rank cities, counties, and states by their relative level of community need and compare these levels against their CDBG formula allocation.This article takes a second look at the needs index developed for the 2005 report and shows how the needs index might be improved and also shows a method for better informing policymakers about the policy choices imbedded within the needs index