Sponsors
The bill boosts and inflation-protects housing assistance and redirects CDBG toward higher-poverty and older-housing areas—helping many low-income renters and high-need communities—while increasing federal spending, creating winners and losers among localities, and imposing administrative and capacity challenges.
Low-income individuals and renters will receive increased and inflation-protected housing assistance because section 106 is funded at $3.425 billion in FY2026 and authorized amounts are indexed to CPI–U.
Low-income people in high-poverty metropolitan cities and counties will receive more targeted CDBG allocations because the new formula weights poverty and older housing, directing funds to areas with concentrated need.
State and local governments (including nonentitlement/rural areas) gain more predictable, inflation-indexed funding levels which helps multi-year budget planning and preserves program purchasing power.
Taxpayers will face higher federal spending because the $3.425 billion appropriation begins in FY2026 and automatically increases with CPI–U, adding to budgetary cost or deficit pressure.
Some current CDBG recipients (local governments and the low-income residents they serve) could see reduced funding if they score lower under the new weighted metrics, leading to cuts in services or projects.
Areas whose needs are not captured by the specified ratios (for example infrastructure, job training, or other non-housing needs) may be disadvantaged and receive less support despite real community needs.
Based on analysis of 3 sections of legislative text.
Revises the CDBG allocation formula to emphasize poverty and older housing and authorizes $3.425B for FY2026 with CPI‑U indexing through FY2029.
Introduced December 11, 2025 by Stephen Cohen · Last progress December 11, 2025
Revises how Community Development Block Grant (CDBG) funds are allocated by changing the formula used to split funding between metropolitan cities, urban counties, and State nonentitlement areas so allocations depend on an average of four ratios (poverty rate, female‑headed households with children, pre‑1950 housing occupied by poor households, and housing overcrowding), with heavier weight on the poverty and older‑housing ratios. Also sets an initial authorized funding level of $3,425,000,000 for FY2026 and requires annual upward adjustments by changes in the CPI‑U for FY2026–FY2029.