Where Did the Money Go? Assessing the Distribution of the Community Development Block Grant - Disasters Recovery Funds

In recent years, the U.S. federal government has increasingly used the Community Development Block Grant-Disaster Recovery (CDBG-DR) program, administered by the Department of Housing and Urban Development (HUD), as a vehicle for distributing aid to disaster-affected communities. In this study, we compile a unique dataset of CDBG-DR awards across U.S. counties between 2001 and 2017 to present the first comprehensive assessment of the aid distribution from this program. We empirically examine the factors associated with a county's receipt of CDBG-DR grants, including disaster damage, receipt of other disaster aid, socioeconomic and demographic characteristics, local government capacity, political ideology, and local geographic risk attributes. We utilize a double-hurdle approach to estimate both the likelihood of a county receiving CDBG-DR grants following a disaster and the amount of aid it received. Results show that both the receipt and amount of CDBG-DR funding positively correlate with other federal disaster assistance, while their relationship with disaster damage is more ambiguous. Counties with lower housing values are more likely to receive CDBG-DR grants. After controlling for income and other economic factors, counties with a higher percentage of Black populations receive less aid from this program, suggesting a potential racial bias in CDBG-DR fund allocation. We also find that counties in states with a legislator serving on a CDBG oversight committee are significantly more likely to receive CDBG-DR aid after a disaster.