Whose Neighborhood Needs? Assessing the Spatial Distribution of Federal Community Development Funds

Abstract

Local governments must balance their growth ambitions against needs arising from social inequities. The Community Development Block Grant (CDBG) program aims to redress these disparities by directing funds toward disinvested tracts. We ask whether a city's institutional design, public and private actor composition, and resource availability influence the decision to invest in communities with greater levels of social need. Utilizing a social equity framework, we connect place-level procedural fairness mechanisms with neighborhood-level access equity consequences. Combining U.S. local government survey data over two decades with census tract-level CDBG expenditures, we find that in neighborhood where 51 percent or more of the families are low-to-moderate income (LMI), its likelihood of receiving funds increases with its share of LMI population relative to the city's, but at a diminished rate compared to non-LMI tracts. Further, city-level factors moderate this relationship (e.g., including community development corporations in planning processes).