Subject
title
Public Hearing on Community Needs: FY 2026 Community Development Block Grant (CDBG) Funding
end
Department
Housing and Community Development
Recommendation
Staff recommends that the Mayor and Council (1) Receive a brief overview of the upcoming CDBG funding cycle and application process, (2) Conduct a public hearing on community needs, and (3) Hold the public record open until September 23, 2024.
Discussion
Each year, the City of Rockville receives federal Community Development Block Grant (CDBG) funds through a cooperative agreement with Montgomery County. CDBG funds must be used for housing and community development projects that primarily benefit low- and moderate-income persons or neighborhoods. It is anticipated that Rockville will receive approximately $263,000 in CDBG funding for federal Program Year 51, which is FY 2026.
The city has focused its CDBG allocation to rehabilitating different types of housing. For example, for the FY 2025 funding application to the county, the Mayor and Council approved the following projects described in Table 1.
Table 1. FY 2025 CDBG Fund Allocation
|
Agency |
Scope |
Funding Level |
|
Community Reach of Montgomery County (CRM) |
CRM is seeking funding for repair and maintenance of one of its units that serves as permanent supportive housing, Jefferson House. The specific proposed scope of work at Jefferson House includes maintenance and improvement projects to the interior and exterior of the Jefferson House. |
$22,185 |
|
Housing Unlimited (HU) |
HU proposes to include installation of new kitchen cabinetry, countertops, and appliances in the kitchen; upgrade two bathrooms to include walk-in showers, new vanities, and toilets; and painting and flooring throughout the unit. This shared housing assists the mental health recovery of residents. HU purchased the unit in 2023. |
$70,870 |
|
Interfaith Works (IW) |
IW is planning to renovate the IW Women’s Center at Taft Court to improve the physical living conditions and enhance safety. The specific work items include installation of a new shower (for staff); enhance security and safety (installation of 5 floodlights); electrical configuration; replacement of exterior windows; and repaint and restripe parking lot. |
$19,945 |
|
Rockville Housing Enterprises (RHE) |
RHE proposes to replace air conditioning units in twenty-eight (28) multi-family public housing units of the David Scull Courts community and community center (2 HVAC units). The committee recommended partial funding to complete air conditioning unit replacements at 15 of the requested 30 units. |
$75,000 |
|
City of Rockville |
Single-family Rehab Program |
$75,000 |
|
TOTAL |
|
$263,000 |
The chart below shows CDBG allocations for the past five grant years, FY 2019 to FY 2024 (Federal Program Years 44 to 49).
Chart 1. CDBG Allocation by Use - FY 2018 to FY 2025
Source: City of Rockville, HCD, 2024. *Anticipated award amount Funding anticipated in fall of 2025.
Public Hearing
This public hearing is a prerequisite to applying for CDBG funds. The purpose of the public hearing is to obtain public input on community needs and priorities. The applicants and their applications for CDBG funds should be focused on these community needs and priorities. The application period for external agencies began on July 3, 2024. Funding applications are due to the City of Rockville on October 16, 2024. After reviewing and scoring submitted applications, staff will recommend the use of the CDBG funds to the Mayor and Council for consideration and approval in November or December. The city's funding application will reflect the Mayor and Council’s decisions and is due to Montgomery County by December 31, 2024, with funding becoming available in the fall of 2025.
Community Needs
Federal guidelines require that CDBG activities be responsive to community needs. The section below is a summary of Rockville’s population trends and housing needs.
Demographic and Other Characteristics Affecting Housing Needs and Trends
Between 2020 and 2040, Rockville’s population is projected to increase from 67,139 residents to approximately 82,000 residents (Chart 2), who would be housed in approximately 10,000 new housing units. Below is a graphic illustration of the city’s historic and projected population and household growth.
Chart 2. Projected Population and Household Growth
Rockville’s population is aging, resulting in a need for different types of senior housing for residents who want to remain in Rockville in retirement. Below is a graphic illustration (Chart 3) of the city’s current and projected population by age cohort.
Chart 3. Age Distribution
• The 2021 5-year estimates suggest that Rockville’s area median household income is roughly $116,031 in 2021.
• The 2021 5-year estimates suggest that 7% of the city households live below the federal poverty line. Poverty levels differ for certain families. In 2020, 10.2% of female-headed households lived below the federal poverty line, compared to 4.6% of families with children under 18 years.
• Nearly 73% of the student body at one Rockville elementary school receives Free and Reduced Priced Meals (FARMs), indicating that there are neighborhoods with higher concentrations of low-income households. Within Montgomery County, 43% of students receive Free and Reduced Priced Meals (FARMS).
• Prior to the COVID-19 pandemic, Rockville anticipated that over 30,000 new jobs would be added between 2020 and 2040; most will be office jobs. While the pandemic has passed, many new buildings have to potential to be converted into affordable housing for residents.
• The city is largely built-out with respect to existing land use. Future housing development will occur through the redevelopment of existing sites. This makes it very challenging to find available land within or immediately outside of Rockville city limits that would accommodate single-family development.
Housing Characteristics
• There were approximately 27,953 total housing units in 2021.
• Of the total housing units, approximately 95.4% of the units are occupied in 2021.
• Of the occupied units, approximately 55.2% are owner-occupied and 44.8% are renter-occupied in 2021.
• Approximately 2,500 units are affordable (existing housing stock with or without income restrictions) for moderate- or low-income households.
• Approximately half of the housing stock was built between 1950 and 1980, and nearly 43% of the stock was built between 1990 and the present.
• Of the renter households, approximately 43.9% of renters spend more than 30% of household income on rent. Of these rent overburdened households, approximately 89% spend more than 35%.
• As a result of high housing costs and comparatively low wages, in 2022, over 55% of Rockville renters are considered housing cost-burdened, paying more than 30% of their income for housing, and over 20% are considered severely housing cost-burdened, paying more than 50% of their income for housing. Hispanic or Latino, “Some Other Race,” mixed-race, and Black households are disproportionately housing cost burdened (Chart 4).
Chart 4. Gross Rent as a Percentage of Household Income, By Race (2021)
Source: U.S. Census, 2021 American Community Survey
• The City of Rockville has one of the highest average rents in the county. The average monthly rent in Rockville was $1,994 in 2021 compared to a Montgomery County average of $1,844.
• The median home value in the City of Rockville in 2021 was $554,800 compared to $508,600 for Montgomery County.
Housing Needs
• With Rockville’s high cost of housing, there is an ongoing need for more affordable and workforce housing. This is demonstrated by the percentage of households with housing cost burdens - households paying 30% or more of their gross income on mortgage/rent and utilities.
• There are currently approximately 785 rental units and 437 homeownership units in the Moderately Priced Dwelling Unit (MPDU) program in the city.
• An aging population of homeowners on fixed incomes often cannot afford regular maintenance or address emergency repairs in older single-family homes. About 2,200 households with members 65 and older are living in units that were constructed before 1980.
• Rockville has a high demand for low-income housing through Rockville Housing Enterprises (RHE), the city’s Public Housing Authority.
• RHE manages 80 public housing (David Scull and scattered site) units, and 500 households are on the waitlist for these units. They report that there are an average of five public housing turnovers per year.
• RHE manages 462 rental vouchers, and 1,388 households are on the waitlist for these subsidies. RHE turns approximately five vouchers a year.
Federal Requirements
Eligible CDBG activities are governed by federal regulations and requirements. Federal environmental review, federal labor standards (i.e., prevailing or Davis-Bacon wages) and compliance, lead-based paint regulations, and fair housing requirements may apply depending on the activity proposed. Staff will assist applicants in understanding which, if any, of these requirements will apply to the project.
Mayor and Council History
This is the first time in this funding cycle that this item has been brought before the Mayor and Council. The City of Rockville has been a recipient and administrator of the CDBG Grant for the last 50 years and the Mayor and Council has always supported the administration of this grant due to the large benefit it serves to many nonprofit organizations and Rockville residents.
Public Notification and Engagement
The funding application and public hearing announcement were e-mailed to civic associations, homeowners associations, and community organizations on July 10, 2024. Public notice announcing the public hearings was published in the Washington Post on August 10 and 17, 2024. As requested by the Mayor and Council in previous years, the city hosted a Housing Providers Forums on July 18 and August 26, 2024, where housing providers were notified of the upcoming funding cycle and provided with information on the application submission process and requirements.
Next Steps
Funding applications from housing providers are due to the city on October 16, 2024. Applications are reviewed and scored by a cross-departmental staff review committee, which makes funding recommendations to the Mayor and Council. Staff anticipates returning to the Mayor and Council in November with recommendation(s) and then submitting the grant application to the county in December following the Mayor and Council's approval of the application.