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City of Palo Alto Community Development Block Grant – California


The City of Palo Alto is pleased to present the U.S. Department of Housing and Urban Development (HUD) funded Community Development Block Grant (CDBG).

Donor Name: City of Palo Alto

State: California

City: Palo Alto

Type of Grant: Grant

Deadline: 11/21/2022

Size of the Grant: $10,000


This packet is intended to explain the federal and local goals of the CDBG program and to assist you in applying for funding under the City’s two-year funding cycle that includes FY 2023-24 (July 1, 2023 to June 30, 2024) AND FY 2024-25 (July 1, 2024 to June 30, 2025). Included in the packet are a summary of program administration procedures, instructions to complete the CDBG application, and an explanation of activities eligible for funding.

The CDBG program is a flexible program that provides communities with resources to address a wide range of unique community development needs. Beginning in 1974, the Community Development Block Grant (CDBG) program is one of the longest continuously run programs at the Department of Housing and Urban Development (HUD). The CDBG program provides annual grants on a formula basis to general units of local government and States.

The purpose of the CDBG program is to enhance and maintain viable urban communities through the provision of decent affordable housing, a suitable living environment and the expansion of economic opportunities, principally for low- and moderate income persons. CDBG is an important tool for assisting local government agencies to tackle serious challenges facing their communities. The CDBG program has made a
difference in the lives of millions of people and their communities across the nation.

In order for an activity or program to be eligible for Community Development Block Grant (CDBG) funding it must qualify as meeting one or more of the following Department of Housing and Urban Development (HUD) three National Objectives:

National Objective #1

Activities benefiting low- and moderate-income persons/households

The definition of a low- or moderate-income person or household is one having an income equal to or less than the income limits established by HUD. A minimum of 70% of the City’s total allocation must be used for this purpose. In order to determine if a project qualifies under this criterion, it must fall under one of the following two activities:

I. Direct Benefit Activities

A direct benefit activity requires the sub recipient to document that the program is benefiting low- and moderate-income persons. At least 51% of the recipients of Public Service programs must be within low- and moderate-income limits. Certain other activities, such as Housing rehabilitation, require 100% of the program participants to be low- and moderate-income households.

  • Economic Development Activities
    • Economic development activities include all endeavors aimed at increasing or maintaining the level of business activity in the City. These activities mandate that a business create or retain permanent jobs, of which 51% will be available to persons of low and moderate income. Examples include loans or grants to businesses providing job training opportunities for low- and moderate-income persons, and advertising and recruiting efforts directed to areas where substantial numbers of low- and moderate income persons reside.
  • Public Services
    • Up to 15% of the City’s total annual CDBG allocation may be used for Public Service Activities. At least 51% of a public service activity’s clientele must be documented as low- and moderate-income residents. Public service projects must be a new service or an increase in the existing level of service. Examples of public services include homeless needs, senior programs, childcare, domestic violence, drug abuse, and crime prevention programs.
  • Presumed Benefit
    • Certain groups are presumed by HUD to meet the low- and moderate-income criteria. HUD has defined these groups as: abused children, battered spouses, elderly persons, “severely disabled” adults, homeless persons, illiterate adults and migrant farm workers.
  • Housing Activities
    • Housing activities involve the acquisition or rehabilitation of properties, or new housing construction for the purpose of benefiting low- and moderate-income households. The following are examples of Housing activities which meet these criteria:
      • Rehabilitation of Housing occupied by low- and moderate-income persons. Improvements must eliminate sub-standard or deteriorating property conditions.
      • Rehabilitation of multi-unit rental Housing of which at least 51% of the units are occupied by tenants whose income is less than or equal to 80% of the County median income.

II. Area Benefit Activities

These are activities that serve geographic areas where not less than 51% of the households are low and moderate income. To meet this criterion, 51% of household incomes must be equal to or less than 80% of the County’s median income. Examples of Area Benefit Activities include public improvements such as street, sidewalk, curb and gutter improvements (and related design and engineering) and community centers.

  • Public Facilities and Improvements
    • Construction and/or general improvements to a neighborhood are allowable when the area is primarily composed of low- and moderate-income residents. General improvements include, but are not limited to, street and related improvements, sidewalks, public facilities, and water and sewer facilities.

National Objective #2

Activities which aid in the prevention or elimination of slums or blight

  • Projects may qualify if benefiting a slum or blighted area as defined under state or local law and containing a sub-standard number of deteriorating or dilapidated buildings or infrastructure within the area. Redevelopment project areas qualify under this category.
  • In order to be eligible, the activity must be designed to address one or more of the conditions which qualified the area as slum and blighted. Residential rehabilitation qualifies if the property is considered substandard per local definition.
  • Projects which may qualify outside a slum or blighted area include acquisition, demolition, rehabilitation, relocation and historic preservation. Under this standard, rehabilitation is limited to the extent necessary to eliminate substandard conditions detrimental to public health and safety.

National Objective #3

Activities designed to meet community development needs having a particular urgency

Activities must be designed to alleviate existing conditions which pose a serious and immediate threat to the health or welfare of the community, and which became urgent within the past 18 months. Other sources of funding must be available.


The goal of the City of Palo Alto, with funding from CDBG, is to increase self-sufficiency and economic opportunity for lower-income residents and individuals with special needs so that they can achieve a reasonable standard of living. Specifically, from July 1, 2020 through June 30, 2025 the City has established the following priority needs and subsequent goals as a guide for allocating CDBG funding:

  • Affordable Housing
    • Assist in the creation and preservation of affordable housing for low income and special needs households. Per the Needs Assessment, there is a 1,350- unit gap of affordable housing units for households earning between 0%- 30% AMI
  • Homeless
    • Support the local Continuum of Care strategy to aid homeless persons and families, and to end chronic homelessness
  • Community Services and Public Improvements
    • Support provision of essential human services, particularly for special needs populations, and maintain/expand community facilities and infrastructure
  • Fair Housing
    • Promote fair housing choice
  • Economic Development
    • Support economic development activities that promote employment growth and help lower income people secure and maintain jobs

Grant Amount

Proposals will be reviewed by City staff for completeness, program eligibility and minimum funding request of $10,000.

Eligible Activities

Public services, within certain limits

  • The City awards CDBG funding to nonprofit agencies to provide public services and housing for low-income and special needs households, such as
    • Single Room Occupancy (SRO) resident supportive services for lowincome residents to help them maintain housing stability
    • Long-term care ombudsman to service the elderly
    • A one-stop, multi-service, day drop-in center to provide services for the homeless within the City
    • Domestic violence services; and
    • Housing and emergency services
  • Interim assistance necessary to arrest deterioration or alleviate emergency conditions threatening the public health and safety
  • Housing services
  • Construction of housing
  • Homeownership assistance
  • Provision of assistance to carry out economic development and job creation/retention activities
  • Rehabilitation and preservation of residential and non-residential structures, both publicly and privately owned
  • Activities relating to energy conservation and renewable energy resources


The City of Palo Alto receives funds from the U.S. Department of Housing and Urban Development (HUD) to administer the Community Development Block Grant (CDBG) program. This program funds various nonprofit agencies to implement services that benefit low- and moderate-income persons and address community development needs.

Grantees are generally selected through a competitive process and provide services such as case management to secure affordable housing and employment, fair housing, employment training senior daycare and housing rehabilitation.

For more information, visit Community Development Block Grant.

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