Abstract
The State of Illinois has targeted economic development as a majorpriority in the Small Cities Community Development Block Grant program, although the state still accepts applications for public facilities and housing rehabilitation. This article examines the impact of this state priority on the application behavior of small cities. We find that grant applicants perceive that the state's economic development emphasis decreases their ability to be successful in obtaining housing rehabilitation grants. This perception has had an impact on subsequent application behavior. Cities no longer apply for grants that are most likely to benefit directly those with low and moderate incomes.
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