American Institute of Certified Planners (AICP) Practice Exam

What major legislation eliminated categorical grants and created block grants in housing and community development?

1. Housing and Community Development Act

2. Urban Development Act

3. Community Renewal Act

4. Economic Growth and Tax Relief Reconciliation Act

The correct answer is: Housing and Community Development Act

The Housing and Community Development Act was significant in reshaping the federal approach to funding related to housing and community development. Prior to this legislation, the federal government primarily used categorical grants, which were funds allocated for specific purposes with strict requirements on how they could be used. The act introduced block grants, which provided more flexibility by allowing local governments greater discretion in how to spend the funds. This shift aimed to empower local authorities to address their unique community needs more effectively and respond to local priorities rather than strictly adhering to federal guidelines. This transformation in funding mechanisms was crucial in the context of urban planning and community development, as it allowed for a more tailored approach to combating issues such as housing deficits, urban decay, and community revitalization. By consolidating the funding into block grants, the federal government encouraged innovative, locally-driven solutions and fostered partnerships between different levels of government and community organizations. The other options listed do not directly pertain to the elimination of categorical grants or the establishment of block grants in the same specific context as the Housing and Community Development Act.