Subject
title
Public Hearing on Community Needs: FY 2028 Community Development Block Grant (CDBG) Funding
end
Department
Housing and Community Development
Recommendation
Staff recommend 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 29, 2026.
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 53, which is FY 2028.
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 2026 funding application to the county.
Table 1. FY 2026 CDBG Fund Allocation
|
Agency |
Scope |
Funding Level |
|
Community Reach of Montgomery County |
CRM will repair one of its units that serves as permanent supportive housing, Rockland House. |
$8,546 |
|
Habitat for Humanity Metro Maryland Inc. |
Habitat for Humanity Metro Maryland, Inc. will receive funds to provide two 65% AMI homebuyers with $30,000 interest-free down payment assistance when purchasing one of the homes at 107 Fleet Street, Rockville. |
$60,000 |
|
Rockville Housing Enterprises |
RHE will replace air complete roof replacements at 17 units in the David Scull Courts community. |
$94,454 |
|
City of Rockville |
Single-family Rehabilitation Program |
$100,000 |
|
TOTAL |
|
$263,000 |
|
|
|
|
The chart below shows CDBG allocations for the past five grant years, FY 2021 to FY 2027 (Federal Program Years 46 to 52)1
Chart 1. CDBG Allocation by Use - FY 2021 to FY 2027*
*anticipated funding
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 June 29, 2026. Funding applications are due to the City of Rockville on October 1, 2026. 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, 2026, with funding becoming available in the fall of 2027.
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.
In 2026, the Department of Housing and Community Development completed a comprehensive Housing Needs Assessment to better understand existing and future housing needs across the community. Key findings from the analysis included:
• Fifty-two percent of renters pay more than 30% of their monthly income in rent. This cost burden has been sustained without major shifts due to a stagnating rental market.
• Rockville has a significant shortage of affordable rental units for renter households making less than $100,000. For renter householders earning less than $50,000, there are only 31 affordable rental homes per 100 renter households. This is driven both by the loss of lower cost units and a relatively low number of subsidized affordable homes.
• The senior population is growing, suggesting an increased need for senior housing. Sixty-eight percent of senior renter households pay more than 30% of their monthly income on rent.
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.
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. 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.
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 opportunities 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
Annually, the Mayor and Council host a public hearing about the CDBG program. 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 over 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 28, 2026. Public notices announcing the public hearings were first notice on September 3, 2026, second notice on September 10, 2026, for the public forum on September 28, 2026. As requested by the Mayor and Council in previous years, the city hosted a Housing Providers Forums on August 25, 2026, and September 16, 2026, 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, 2026. 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.