In the first attempt since the 1970s to change the way block grants are disbursed, the federal Department of Housing and Urban Development has proposed new rules that could raise the amount of money New York gets from the federal Community Development Block Grant (CDBG) program by 30 percent.

The proposal, released two weeks ago and currently being debated by advocates and on Capital Hill, would change the way CDBG money is allocated. New funding amounts would be based on five criteria:

The government says the new rules are needed because demographic changes over the past generation have meant that less CDBG money is getting to communities with high poverty and other social difficulties. While New York City could benefit under the proposal, other municipalities in the state could suffer. Buffalo could see its allocation drop by 13 percent, Albany by 16 percent and Troy by 30 percent. In addition, small cities and counties that received less that $500,000 a year in CDBG money would be dropped from the program altogether.

“We certainly would never oppose a new system that is in pursuit of fairness,” said Jeff Falcusan, housing and community development policy analyst with the National Association of Housing and Redevelopment Officials. “But we think it needs to be done in consultation with the grantees.”

Despite the new allocation formula, the Bush Administration plans to cut the CDBG budget by 25% in 2007. If the new proposal were implemented along with the budget cut, New York City’s CDBG allocation would shrink by 2 percent, while Albany would suffer a 37 percent cut, Buffalo a 35 percent cut, and Troy would lose almost half its CDBG funding.

Any change in block grant allocation requires Congressional action, which insiders suggest is unlikely in an election year.