The Home Price Impacts of CDBG-Funded Investments: An Exploration into Nonlinear and Threshold Effects

Brett Theodos, George Galster and Amanda Hermans

Housing Policy Debate, 2025, vol. 35, issue 3, 422-451

Abstract: The Community Development Block Grant (CDBG) program has been one of the largest federal programs supporting lower-income communities, yet there have been few rigorous evaluations of whether it has been deployed to the greatest effect. We investigate CDBG’s nonlinear local housing market impacts using annual data collected from 2000 to 2020 in Washington, DC, which we analyze with the Adjusted Interrupted Time Series (AITS) quasi-experimental impact evaluation model to control for the non-random location of CDBG-funded, place-based investments. We employ a binned specification of the AITS model to assess how the relationship between CDBG expenditures and single-family home prices within 2,000 feet vary in a nonlinear fashion. We find that CDBG-funded investments below a threshold amount ($145,000 over the five most recent years, in constant 2019 dollars) yield no impacts. Beyond this threshold, greater spending is associated with larger impacts but not proportionally; impacts per unit of spending exhibit diminishing returns. Impacts are magnified in neighborhoods that show superior rates of appreciation prior to any CDBG intervention. Our results imply that CDBG grants can be marshaled most efficiently to alter local market trajectories by spatial targeting directing above-threshold but moderately sized investments toward many of the most-promising low-/moderate-income neighborhoods.

Date: 2025
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DOI: 10.1080/10511482.2025.2467131

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