CMM Economic Development & Housing 2 — Questions and Answers
Question 1: Which federal program provides grants to states and localities for community development activities that benefit low- and moderate-income persons?
- HOME Investment Partnerships Program
- Community Development Block Grant (CDBG) (Correct answer)
- Low-Income Housing Tax Credit (LIHTC)
- Section 108 Loan Guarantee
Correct answer: Community Development Block Grant (CDBG)
CDBG is a flexible federal grant program administered by HUD that supports community development activities benefiting low- and moderate-income residents.
Question 2: A municipality wants to attract a large manufacturer that will create 500 jobs. Which incentive tool directly reduces the company's property tax burden for a set number of years?
- Tax Increment Financing (TIF)
- Tax Abatement Agreement (Correct answer)
- Industrial Revenue Bond
- Enterprise Zone Designation
Correct answer: Tax Abatement Agreement
A tax abatement agreement temporarily reduces or eliminates a business's property tax liability to incentivize location or expansion within the municipality.
Question 3: What is the primary purpose of a Consolidated Plan required by HUD?
- To set municipal zoning regulations for the next decade
- To plan capital infrastructure improvements citywide
- To identify housing and community development needs and allocate federal funds accordingly (Correct answer)
- To establish a municipal budget for economic incentives
Correct answer: To identify housing and community development needs and allocate federal funds accordingly
The Consolidated Plan is a HUD-required planning document that identifies a community's housing and community development needs and outlines how federal formula grants will be used to address them.
Question 4: A city is experiencing 'housing cost burden.' By HUD's definition, this means residents are spending more than what percentage of their income on housing?
- 25%
- 30% (Correct answer)
- 40%
- 50%
Correct answer: 30%
HUD defines housing cost burden as spending more than 30% of gross income on housing costs, including rent or mortgage, utilities, and insurance.
Question 5: Which type of zoning approach allows for a mix of uses—residential, commercial, and sometimes light industrial—within the same zone or building?
- Euclidean zoning
- Mixed-use zoning (Correct answer)
- Agricultural zoning
- Cluster zoning
Correct answer: Mixed-use zoning
Mixed-use zoning permits multiple land uses in the same area or structure, promoting walkability, economic vitality, and housing density.
Question 6: An Opportunity Zone is a designation created by which federal legislation?
- Community Reinvestment Act of 1977
- American Recovery and Reinvestment Act of 2009
- Tax Cuts and Jobs Act of 2017 (Correct answer)
- Dodd-Frank Wall Street Reform Act of 2010
Correct answer: Tax Cuts and Jobs Act of 2017
Opportunity Zones were created by the Tax Cuts and Jobs Act of 2017 to incentivize long-term private investment in low-income census tracts.
Question 7: What is 'inclusionary zoning'?
- Zoning that allows all commercial uses in residential areas
- A policy requiring or incentivizing developers to include affordable units in new housing developments (Correct answer)
- A federal mandate to zone land for public housing
- Zoning that eliminates minimum lot size requirements
Correct answer: A policy requiring or incentivizing developers to include affordable units in new housing developments
Inclusionary zoning requires or encourages private developers to set aside a percentage of new housing units as affordable for low- or moderate-income households.
CMM Economic Development & Housing 2
Which federal program provides grants to states and localities for community development activities that benefit low- and moderate-income persons?