Research to Develop A Community Needs Index

In order to understand the most efficient and fair way to allocate Community
Development Block Grant funds, HUD staff since 1976 have worked on developing
measures of community needs. This study, Research to Develop a Community Needs
Index, marks a further advance by developing an index that not only shows current needs
but also can be used to demonstrate changing community conditions.
The study draws on a number of public databases, including the American
Community Survey (ACS). It tests the feasibility of relying on the ACS for annual
information about community needs, and it devises a method to compare those needs
over time. Specifically this study used 2005 ACS data and other readily-available
sources in order to create an index of community needs. Itthen applied that index to
measure changes in community needs since 2000.
This study also develops and implementsan innovative index of real fiscal
capacity, which measures the extent to which communities are capable of dealing with
their problems without federal assistance. Toconstruct this index, the study compares
the ability of cities to raise revenue from various sources. The “real fiscal capacity”
index ranks 234 cities on the real resources that they could have used in order to solve
their community needs in 2005.