Our First Niche Market - family income by block

One of the biggest ways that the federal government conveys funds to state and local governments this thru the Community Development Block Grant Program (CDBG).

The CDBG program is administered in a way whereby funds are allocated downwards to county level and at the county level the funds can be spent in neighborhoods that qualify based on the income level of families (and unrelated individuals) who live there. All counties in the U.S. (all 3400 of them) spend their funds in areas that are defined by including or excluding census block groups. Census block groups are the defining elements because they are the lowest level of geography at which income information is available. Areas which do not qualify simply cannot receive CDBG funds.

Often there are small "pockets of poverty" where it is desired that funds be spent, but because the particular neighborhood is included with other higher income neighborhoods in the same census block group, it does not qualify. If the CDBG planning staff could use census blocks for defining areas, then the "pocket of poverty" might qualify. Carl House was hired in 1997 by Palm Beach County to develop a methodology for estimating income at block level for just that purpose. We learned that the number of people in areas qualifying (at the 70% level) was 62,447 when the HUD block group data was used, but when block level data was used, 117,855 people live in qualifying areas. The number of people living in areas qualifying at 70% was nearly doubled simply by using block level data for analysis. All data required for the methodology was available from the Census Bureau (1990 data).

Two counties are contracting with Carl to do the same work based on the 2000 census. The methodology must be revised because the 1990 census included a special tabulation (STP-19) which is not availabe for 2000. The proposal to Polk County has been made and according to County staff is will be accepted and is being processed. A proposal will be written for Lake County in early December and County staff there indicates it will be approved. Widespread discussion has already been had in Lake County and City departments.

The price tag for Polk County is $12,000 less $2500 for making maps. The price tag for Lake County will be about $7000 with no maps required as they will create their own. HUD, which oversees the CDBG program, takes the position that counties have a great deal of latitude on what methodology they will use (though HUD reserves the right to approve it). In the case of Polk County, HUD (Jacksonville office) has said that if the methodology is entirely based on Census data it is acceptable.

If in 2 or 3 months we have made two counties happy and have developed a computer program for generating the data, we should be able to sell the same work on an very profitable basis in other of Florida's 55 counties and other of the 3400 counties in the U.S. This could be the funding needed to finance the development of a user interface for our real estate software.