Community Development Block Grants in Colonia Communities: Infrastructure, Housing, and Resources for Forgotten America

Keith Wiley
Manda LaPorte
Housing Assistance Council

The U.S.-Mexico border region is often in the news for immigration and border security concerns; however, the issues of substandard housing and living conditions in many of these communities— commonly referred to as “colonias”—are overlooked by the public. Over 2,000 known colonias are in the border region, and these communities are home to over half a million people (Federal Reserve Bank of Dallas, 2015). On the ground, stakeholders have sought assistance in addressing the most common housing and infrastructure needs of families within colonias, both recognized and informal. The federal government began responding to these calls in the early 1990s.

Beginning in 1991, HUD’s Community Development Block Grant (CDBG) nonentitlement program included a set-aside requirement that a percentage of funds be used for colonias. This set-aside was meant to ensure that CDBG resources are used to address the substandard living conditions that exist in these unregulated developments (colonia) found near the U.S.-Mexico border in all four border states (Arizona, California, New Mexico, and Texas). Despite having been in operation for over 32 years and requiring millions of dollars to be used to improve colonias, limited academic study has been conducted on colonias and the federal resources that flow to these communities.

This article seeks to improve understanding of the program through analyzing administrative data on the CDBG nonentitlement program and perspectives from experts and practitioners who work directly in colonia communities and the CDBG program. The analysis describes CDBG funds awarded during the 2014 to 2023 period in all four U.S.-Mexico border states and was augmented by interviews detailing CDBG’s role and impact to meet these distinct communities’ needs. The authors highlight that although nonentitlement colonia set-aside funds, in aggregate, most often support infrastructure and water/sewer treatment activities, uses vary across states. The authors further emphasize that these set-aside projects, along with other nonentitlement efforts, were closely related to the Federal Housing Finance Agency’s designated colonia investment areas. Experts and practitioners viewed the set-aside funds as an important resource for colonias that could be strengthened by altering the program’s definition by expanding its coverage and by increasing efforts to build up local capacity to both access and effectively use resources