Statement of Nelson Breg�n
June 30, 2003
General Deputy Assistant Secretary
Office of Community Planning and Development
before the Committee on Financial Services
U.S. House of Representatives
Good morning Chairman Ney, Ranking Member Waters, and Members
of the Subcommittee:
Thank you for the opportunity to be here this morning as part of
the Subcommittee's examination of community and economic development
activities for the City of Los Angeles. My name is Nelson Rapha�l
Breg�n, and I am the Deputy Assistant Secretary for the Office of
Community Planning and Development.
I am here today on behalf of Secretary Mart�nez and Assistant
Secretary Bernardi to discuss one of HUD's most important tools
for community and economic development -- the Community Development
Block Grant (CDBG) program. As you are aware, State and local governments
depend on HUD and its system of grants to support community and
economic development projects that revive troubled neighborhoods
and spark urban revitalization. We at HUD are working to support
and strengthen these core programs by ensuring that grantees have
even greater flexibility to address locally determined priorities
and maintain long-term prosperity. Our goal is to make these programs
more effective by studying ways to reward communities that commit
to results-oriented, outcome-based performance plans.
This year HUD requested nearly $ 4.5 Billion for the CDBG program
to meet local community and economic development needs in more than
1,000 eligible cities, counties and states. More than $ 146 million
for Los Angeles and Los Angles County the Second largest recipient
of CDBG program dollars in the Nation.
We are all aware that one of the most important reasons for the
success of the HUD sponsored CDBG program is its reliance on local
community leaders to identify key revitalization priorities. CDBG
activities are initiated at the local level based on a community's
identified local needs, priorities, and benefits to the community,
as identified in its Consolidated Plan submitted to HUD in conjunction
with CDBG, HOME, and certain other HUD programs.
Entitlement communities such as Los Angeles may use CDBG funds
for a variety of community, housing and economic development activities
focused on neighborhood revitalization, economic development and
the provision of improved community facilities and services for
low- and moderate-income residents. Those communities receiving
a grant are free to determine what activities to fund as long as
certain requirements are met, including that the activity is eligible
and meets one of the following three national objectives:
1) Benefits low- and moderate-income persons;
2) Aids in the prevention or elimination of slums or
3) Meets urgent community needs that the community is
unable to finance on its own.
In addition, seventy percent (70%) of an entitlement grantee's
CDBG funds (including section 108 loan guarantee proceeds and EDI
and BEDI grants) must primarily benefit low and moderate income
persons, calculated in accordance with HUD regulations on a one,
two, or three year basis and certified by the grantee.
The responsibility for ensuring that local CDBG programs meet Federal
requirements rests initially and primarily with the executive authority
(e.g., Mayor, County Commissioner) of each CDBG grantee, subject
to monitoring by representatives of HUD's Office of Community Planning
and Development and audit by HUD's Office of Inspector General.
Working with local governments, nonprofit organizations are an
important and statutorily authorized conduit for neighborhood-based
program delivery. Nonprofit organizations are often asked to undertake
projects that are inherently risky because of factors such as location,
crime, poverty and disinvestments. Cities utilize nonprofits because
they have specialized skills and neighborhood acceptance. It is
important to note, however, that the primary responsibility for
ensuring that CDBG funds are used to revitalize low- and moderate-income
neighborhoods belongs to the CDBG grantee.
The CDBG program statute and regulations require that grantees
identify eligible activities that will provide benefits to communities,
especially low- and moderate-income communities. The flexibility
of the CDBG program allows grantees to implement community development
activities based on local decisions. Communities may choose to provide
assistance to nonprofit organizations for neighborhood development
initiatives, as they deem necessary. But, the success of any community
development initiative must include accountability for use of program
funds to create tangible results in its neighborhoods.
Working together with local leaders, state officials and Members
of Congress, we, at HUD, have forged a partnership that has made
CDBG a shining example of how government can work.
Thank you very much and this statement concludes my opening remarks.
Content Archived: June 25, 2010