The Department of Housing and Urban Development has announced how it will divide $980 million that the economic-stimulus legislation—the American Recovery and Reinvestment Act—provided for Community Development Block Grants. The CDBG aid will be split among about 1,200 state, city, and county governments.

CDBGs, established in 1974, can be used for many different purposes. Over the program's history, the most popular uses have been affordable-housing rehabilitation and upgrades to infrastructure such as streets, sewers, and community centers.

But for the stimulus CDBGs, HUD says in a technical guidance document released May 5 that it “strongly urges grantees to use funds for hard development costs associated with infrastructure activities that provide basic services to residents, or activities that promote energy efficiency and conservation through rehabilitation or retrofitting of existing buildings.”

HUD adds: "While the full range of CDBG activities is available to grantees, the department strongly suggests that grantees incorporate consideration of the public perception of the intent of the Recovery Act in identifying and selecting projects for [stimulus] CDBG funding."

The economic-stimulus legislation says that localities that receive the grants should place a priority on projects for which contracts can be awarded within 120 days of the grant agreement.

By June 5, cities and counties must file amendments to their “action plans,” telling HUD how they plan to use the stimulus CDBG money. States have until June 29 to file their amended plans.

A HUD spokesman also notes that the ARRA specifically bars the use of stimulus funds by states, localities or private entities for casinos, aquariums, zoos, golf courses, or swimming pools.

The CDBG aid is awarded according to a formula that includes a jurisdiction's population, poverty, age of housing, and amount of overcrowded housing.

The largest allotment of the stimulus CDBGs goes to New York City, with $48.3 million. Chicago will receive $22.4 million.

The stimulus measure contained a total of $1 billion for HUD CDBGs. Of that, $10 million is to go to the Indian Community Development Block Grant program. In addition, $10 million can be used for management and oversight of the program.

To see the full breakdown of the HUD stimulus CDBGs, go to http://www.hud.gov/recovery/cdblock.cfm

Read more economic news in our Recession and Recovery special section.