Cities and urban counties used 27% of their Community Development Block Grants directly for housing projects in fiscal year 2005, while smaller communities used only 17% of their allotment for housing, according to a Government Accountability Office report.The GAO shows that the cities and urban counties spent 24% of their CDBG funds on public improvements (such as water lines and street improvements) and 17% on administration and planning. They also used the funds to a lesser extent for public services, acquisition of property, and economic development, which is supposed to benefit low- to moderate-income people. Smaller communities used 54% of their CDBG funds for public improvements and 15% for economic development. Congress provided $4.2 billion in CDBG spending in fiscal 2005 and fiscal 2006, not including special funding provided to Gulf Coast states for housing and community development projects in the aftermath of hurricanes Katrina, Rita, and Wilma. Congress is likely to approve $4.2 billion for fiscal 2007, even though the Bush administration has requested a $1.2 billion cut.

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