Neighborhood Home Price Impacts of Community Development Block Grant Spending: Longitudinal Evidence From Three Jurisdictions

Brett Theodos
The Urban Institute

George Galster
Wayne State University

Amanda Hermans
The Urban Institute

For a half-century, the Community Development Block Grant (CDBG) program has been one of the largest federal programs supporting local economic and community development, although few rigorous evaluations of its impacts have been conducted. This study measures CDBG’s local housing market effects using annual data collected over roughly the past 20 years in Jersey City, Los Angeles County, and Washington, D.C., which are analyzed with the adjusted interrupted time series quasi-experimental impact evaluation model. Considerable, non-random selection determines which places receive CDBG-funded investments. Nevertheless, this study finds plausibly causal evidence that these investments produced substantial, persistent changes in the housing price trajectories in low-income neighborhoods. Home prices within 2,000 feet of these investments in Los Angeles County, Jersey City, and Washington, D.C., rose, on average, 5, 16, and 19 percent more than the counterfactual, respectively, although those impacts generally eroded slowly over time. At all sites, effects were measurable up to 2,000 feet in distance but differed in the degree to which they decayed across space. Cross-site differences emerged with respect to when the effects commenced after the CDBG expenditure and how long the effects persisted. Those differences likely reflect cross-site variations in the composition, intensity, and context of CDBG expenditures.