Subject
title
Public Hearing on Community Needs: FY 2027 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 25, 2025.
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 52, which is FY 2027.
The city has used its CDBG allocation to rehabilitate multi-family rental housing and single-family homes. For example, projects as described in Table 1 were included in the FY 2025 funding application to the county.
Table 1. FY 2025 CDBG Fund Allocation
|
Agency |
Scope |
Funding Level |
|
Community Reach of Montgomery County (CRM) |
CRM will 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 will 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 |
|
Rockville Housing Enterprises (RHE) |
RHE will 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 2020 to FY 2026 (Federal Program Years 45 to 51)
Chart 1. CDBG Allocation by Use - FY 2020 to FY 2026
Public Hearing and Grant Application Process
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 4, 2025. Funding applications are due to the City of Rockville on October 1, 2025. 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 late fall. The city's funding application will reflect the Mayor and Council’s decisions and is due to Montgomery County by December 31, 2025, with funding becoming available in the fall of 2026.
Community Needs
Between 2020 and 2040, Rockville’s population is projected to increase from 67,117 residents to approximately 91,800 residents, representing a 37 percent increase. Rockville has a relatively high median income at $122,294, although has a nearly eight percent overall poverty rate. Both metrics have increased in recent years. Poverty disproportionately affects certain demographic groups and neighborhoods. For example, five of the seven Rockville elementary schools have a Reduced Priced Meals (FARMs) rate of at least thirty percent: Twinbrook (70%), Meadow Hall (66%), Maryvale (49%), College Gardens (43%), Bayard Rustin (41%).
In 2025, the Department of Housing and Community Development conducted a Human Needs Assessment to identify gaps and opportunities in the services continuum to better meet the needs of residents. The assessment found a need for navigation services; additional behavioral health services, including mental health and substance use treatment; affordable housing; and price adjustments to city services for households living just outside of city limits.
Affordable housing is a particularly acute issue, which has caused the Mayor and Council to name housing as one of its five focus areas. In recent years, both rental and for-purchase housing prices have significantly increased. At the same time, the city’s renter population has grown to consist of almost half of all residents. As of the 2023 American Community Survey, the median renter pays $2,244 - a 17 percent increase from 2019 - and would need an income of $89,760 to afford such a rent.
As a result of high housing costs and comparatively low wages, in 2021, over 55 percent of Rockville renters were considered housing cost-burdened, paying more than 30 percent of their income for housing, and over 20 percent are considered severely housing cost-burdened, paying more than 50 percent of their income for housing. Hispanic or Latino, “Some Other Race,” mixed-race, and Black households are disproportionately housing cost burdened (Chart 2).
The median home value in Rockville is $681,500 . A home at this price would have an estimated monthly mortgage payment of $5,432 . To afford this, a household would need to earn $217,280, which is $94,986 above the median income. As of 2023, 25.3 percent of homeowners are considered housing cost burdened.9 The median monthly cost for owner-occupied housing units is $3,009 . As a result of high housing prices, homeownership rates have declined, especially for younger and first-time homebuyers, which is aligned with national trends.
Chart 2. Gross Rent as a Percentage of Household Income, By Race (2021)
The CDBG program can play a crucial role in addressing these housing affordability issues. Through targeted funding, CDBG can support initiatives such as affordable housing development, down payment assistance, and housing rehabilitation programs. These investments can lower barriers to homeownership, helping bridge the gap between income levels and housing costs. By reducing housing cost burdens and promoting more equitable access to housing stability, the CDBG program offers a strategic tool to improve economic opportunity for Rockville residents. In doing so, it helps build stronger, more inclusive communities that reflect the needs and aspirations of all residents-not just those with higher incomes.
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. Staff are currently monitoring the budget at the federal administration to stay abreast of updates and potential effects. Staff are working closely with the county to ensure we are meeting compliances and requirements to participate in the CDBG program.
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 have always supported the administration of this grant due to the large benefit it provides to many Rockville residents.
Public Notification and Engagement
The funding application and public hearing announcement were emailed to civic associations, homeowners associations, and community organizations on June 30, 2025. Public notice announcing the public hearings was published in the Washington Post on August 28, 2025 and September 4, 2025. As requested by the Mayor and Council in previous years, the city hosted a Housing Providers Forums on August 21, 2025 and September 16, 2025, 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 1, 2025. Applications are reviewed and scored by a cross-departmental staff review committee, which makes funding recommendations to the Mayor and Council. Staff anticipate returning to the Mayor and Council in November with recommendations and then submitting the grant application to the county in December following the Mayor and Council's approval of the application.