Must national objective compliance be demonstrated?
Date Published: January 2016
Yes. All CDBG assisted activities must be eligible and meet one of three national objectives—benefit to low- and moderate-income persons, elimination of slums/blight, and urgent need. If an activity is eligible but does not meet a national objective, that activity becomes ineligible.
The installation, rehabilitation, or reconstruction of public facilities and improvements [24 CFR 570.201(c)]; privately-owned utilities [24 CFR 570.201(l)]; and non-profit owned, non-residential buildings as identified at 24 CFR 570.202(a)(4) may meet the national objective of benefit to low- and moderate-income persons on an area basis [24 CFR 570.208(a)].
The rehabilitation of privately-owned buildings for residential purposes and new housing construction would meet the low- and moderate-income housing national objective [24 CFR 570.208(a)(3)].
Public service activities such as digital literacy classes may meet either the low- and moderate-income area benefit or low- and moderate-income limited clientele national objectives.
The assistance to for-profit businesses under 24 CFR 570.203(b) would meet the low- and moderate-income job creation/retention national objective [24 CFR 570.208(a)(4)]. Businesses that conduct a lot of online retail or have call centers are most likely to create jobs directly related to the provision of broadband services.
In addition, activities assisted under 24 CFR 570.203(b) must also meet the public benefit standards at 24 CFR 570.209. The business assisted must either provide goods or services to low- and moderate-income residents or create or retain one full-time equivalent, permanent job per $35,000 of CDBG funds used. Providing broadband service would fall under the category of goods or services.
For activities that meet the benefit to low- and moderate-income persons on an area basis, how is the service area defined?
Before an Entitlement Jurisdiction grantee provides any CDBG funds for an activity, it must determine the entire area that will be served by the activity. The service area must be in a primarily residential area where not less than 51 percent of the persons residing in the area are low and moderate income. Grantees must also consider the nature of the activity (its size and structure), the location of the activity, and the availability of comparable broadband infrastructure before proceeding.