Lesson 6: Eligible activities

Meeting a national objective is not enough on its own. An activity also has to be one of the kinds of activities CDBG is allowed to pay for in the first place. That list lives at 24 CFR 570.201 through 570.206, six sections covering everything from acquiring land to running the grant program itself. This lesson is a map of that list, weighted toward the sections that touch GCHS's actual work. One caution first: 570.201 through 570.206 are the Entitlement rules. TxCDBG runs under Subpart I, where 570.482 says the eligible activities are those listed at section 105(a) of the Act (42 USC 5305(a)). The two lists overlap heavily, but for a TxCDBG award the State's program design and manual decide what a local government can actually fund.

570.201, basic eligible activities

This is the largest section, running through a long list of paragraphs. The ones worth knowing by letter: (a) acquisition of real property; (b) disposition; (c) public facilities and improvements; (d) clearance, demolition and environmental remediation; (e) public services; (f) interim assistance; (g) payment of the non-Federal share required in connection with a Federal grant program; (h) completion of an urban renewal project; (i) relocation payments and assistance; (j) loss of rental income; (k) housing services and housing counseling; (l) privately owned utilities; (m) construction of certain housing under Section 17 of the United States Housing Act of 1937; (n) direct homeownership assistance; (o) microenterprise assistance; (p) technical assistance for neighborhood revitalization or economic development; (q) assistance to institutions of higher education under defined circumstances.

That list is broad by design. CDBG was written as a flexible block grant, not a narrow categorical program, and 570.201 is where that flexibility shows up most.

570.202, rehabilitation and preservation

This is the section most GCHS work falls under. It covers rehabilitation of residential, public, commercial, and nonprofit-owned property, and manufactured housing. It also covers energy and water efficiency improvements, connection of housing to water and sewer lines, homeowner warranties and insurance, improvements that remove material and architectural barriers restricting the mobility and accessibility of elderly or severely disabled persons (570.202(b)(11), the heart of GCHS's accessibility work), code enforcement in deteriorating areas, historic preservation, renovation of closed buildings for use, lead-based paint activities, and broadband installation. Broadband is not optional in one case: substantial rehabilitation of a building with more than four rental units must include it unless the recipient documents that it is infeasible or an undue burden (570.202(g); 570.482(c)(5) for States, which also covers new construction).

Notice how wide this section's definition of rehabilitation actually reaches. It is not limited to structural repair. Energy efficiency, utility connections, and lead work all sit inside the same eligible activity category as the structural work itself.

570.203, special economic development

This covers acquisition and construction of commercial and industrial buildings, direct assistance to private for-profit businesses, and economic development services connected to those activities. This is the section a partner jurisdiction is more likely to use than GCHS directly, since GCHS's work is rehabilitation and accessibility rather than business assistance.

570.204, activities by community based development organizations

A qualified community-based development organization, a CBDO, can carry out neighborhood revitalization, community economic development, and energy conservation activities under a somewhat different eligibility framework than a standard grantee-run activity. Whether GCHS itself operates as a CBDO on a given grant depends on how that grant is structured, but the category is worth recognizing because it changes what an organization in GCHS's position can be authorized to do.

570.205, planning and capacity building

This covers the plans, studies, analyses, and policy development work that supports a CDBG program without being construction or direct service itself. A needs assessment for a rehabilitation program, or a study of housing conditions in a target area, fits here.

570.206, program administrative costs

This covers the cost of running the CDBG program: general management, oversight and coordination, public information, fair housing activities, and indirect costs charged under an approved cost allocation plan. This is the section that interacts directly with the 20 percent planning and administration spending cap covered in the next lesson. Every dollar spent under 570.206, together with planning costs under 570.205, counts against that cap for an Entitlement grantee. For States, the administrative limits sit at 570.489(a).

Reading the six sections as a set

A useful way to hold these six sections in mind: 570.201 is the general catalog, 570.202 is where GCHS's rehabilitation work actually lives, 570.203 and 570.204 are economic development routes a grantee or CBDO can take, 570.205 is the thinking and planning that supports a program, and 570.206 is the cost of running the program itself. An activity has to fit somewhere in this list before the question of which national objective it meets even comes up. Eligibility and national objective are two separate gates, in that order.

What this means in practice for GCHS

Nearly every GCHS project starts its eligibility analysis at 570.202. The practical habit worth building is to identify the specific paragraph of 570.202 an activity fits under before writing the project description, because 570.202's own list, structural rehab, energy and water efficiency, utility connections, accessibility improvements, code enforcement, lead work, is broad enough that a project can often be documented under more than one paragraph at once. Being specific about which paragraph an activity relies on makes the file easier to defend later, and it also makes clear whether a piece of work, such as broadband in a substantial rehab of a larger rental building, is actually required or covered or needs a separate eligibility basis.