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Community Development Block Grant Job Creation

Community Development Block Grant Job Creation. Paul Herdeg , Cuyahoga County, Ohio NACCED Conference 2011. Brief history of CDBG and jobs. Economic Development Lending Need to demonstrate Low/Mod Benefit Ratio of $35,000/job is hard-wired in regs CDBG-R and other 2009 stimulus programs

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Community Development Block Grant Job Creation

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  1. Community Development Block Grant Job Creation Paul Herdeg, Cuyahoga County, Ohio NACCED Conference 2011

  2. Brief history of CDBG and jobs • Economic Development Lending Need to demonstrate Low/Mod Benefit Ratio of $35,000/job is hard-wired in regs • CDBG-R and other 2009 stimulus programs Early confusion over how to count Full Time Equivalent – directly funded jobs only • Little or no published research available

  3. NACCED working group ideas • Encourage voluntary “CDBG-R” counting • Attempt to define a new methodology • Review literature for existing work on point • Keep members’ limited resources in mind

  4. Literature Review (Lite) • Startup incubator studies • Wind energy studies • Arts studies • Homebuilder studies • Best fit - 2011 CDBG study in progress now

  5. Startup incubator studies • Focus on business survival and growth • Job creation usually a secondary focus • Bias towards technology startup efforts • Fuzzy estimates: “$15,000 or more per job” (Halpern, 1995) • Kitchen study estimated $5K to $9K per jobbut omitted some costs (Hall, 2007)

  6. Wind energy studies • Focus on taxes paid to local governments • Only direct jobs counted in most studies • High cost per job: $175,000 in one study (Kammen, 2004)

  7. Homebuilders’ 2009 study • Claim to count both direct and indirect jobs • Focus on local tax revenue as well as jobs • Averages from$99K per job (new single-family) to $375K per job (new apartments) • Remodeling $128K per job

  8. Americans for Arts 2007 study • Extensive surveys of nonprofit arts groups • Both direct and indirect jobs counted • Leveraged funds (audience spending) counted • Modeled indirect jobs by type of spending • Cost per job $33,000 to $35,000

  9. 2011 IHS Global CDBG Study • Commissioned by Mayors, NACO, NLC • Surveyed 12 CDBG entitlement cities/counties • Used HUD data to group expenditures by type • Surveyed jurisdiction for leverage amounts • Counted both direct and indirect jobs • Modeled by type of activity using IM-PLAN

  10. Preliminary IHS Global Results • Cost per job varied somewhat by jurisdiction • Average cost per job approx. $33,000 • Valid regardless of region, size of grantee • Methodology confirmed by analyst, 9/2011 • Final report unlikely, little additional data

  11. Recommendation • Adopt $33,000 average cost per job from IHS Global study • Compare with Arts study with same results • Count both direct and indirect jobs • Distinguish from CDBG-R direct job counting

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