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It can take upwards of a year to make funding available under a Department of Housing and Urban Development grant program that the president wants to rework. There's at least some bipartisan support for reforms in Congress.
President Biden is proposing changes to speed up the delivery of money to states under a U.S. Department of Housing and Urban Development program that funnels billions of dollars to devastated communities after natural disasters, like floods, hurricanes and wildfires.
There’s bipartisan support in the Senate for changes similar to what Biden is backing. But, at the same time, some top Republicans are wary about how the possible overhaul could increase federal spending and question whether states shouldn’t be taking on more disaster-related expenses themselves, especially at a time when many of them are flush with cash.
The proposals would affect what’s known as the Community Development Block Grant – Disaster Relief program.
Unlike other disaster relief funds, HUD does not have money in the bank that it can quickly send out to states when disaster strikes. Instead, under the often painfully slow CDBG-DR process, Congress has to authorize the relief dollars for each natural disaster. That’s led to disparities in how quickly communities get the money, with it sometimes taking a year or more.
Whether members of Congress will be able to resolve their differences in the months ahead during negotiations over the fiscal 2023 budget is uncertain, said Andy Winkler, director of housing and infrastructure projects at the Bipartisan Policy Center, which supports the reforms.
HUD’s program, created in 1992, is aimed at helping states with costs that other federal disaster relief programs do not cover, and provides funding that can be used to help communities recover from disasters or to be better prepared for future ones.
During a webinar sponsored by the Bipartisan Policy Center on April 25, emergency management directors from the states of Texas, Florida, California and New York City said the money has been used for a variety of purposes.
Texas has used its CDBG-DR funds to rebuild homes destroyed by Hurricane Harvey, and to build new housing, said George P. Bush, commissioner of Texas’ General Land Office, which administers the aid for the state. The state has also used the money to study and recommend changes in zoning laws, with an eye towards reducing future destruction from severe weather.
In California, the state’s 2017 wildfires were so strong “they literally melted the underground infrastructure,” said Maziar Movassaghi, chief disaster recovery officer, for the California Department of Housing and Community Development.
California, he said, used some of its money to replace water pipes. The state also spent on improving rural roads, hoping to improve options for people to escape future blazes.
Dane Eagle, executive director of the Florida Department of Economic Opportunity, said the state used its funds, among other things, to retrain timber workers left jobless after Hurricane Irma in 2017 flattened forests.
“We appreciate the funds, we just want to speed it up,” Eagle said during the webinar.
A HUD official told Route Fifty on Friday that the department agrees “there is a need for changes” with CDBG-DR. The problem, the official said, is that while the program has been around for 30 years, Congress has never made it permanent.
Last September, for instance, Congress appropriated $5 billion for the program to cover disasters that happened in 2020 and 2021. HUD didn’t issue guidance to states on how to get the funds until February. For states where disasters hit in 2020, like the magnitude 6.4 earthquake that struck Puerto Rico that January, it meant the help did not become available for about two years, according to the Bipartisan Policy Center.
In contrast, Louisiana communities struck by Hurricane Ida in August 2021 only had to wait a few months until the money became available in February. Communities in the same state hit by Hurricanes Laura and Delta in 2020, on the other hand, had to wait over a year.
Under federal procedures, HUD has to start the grant process anew each time the money is appropriated. This means writing new requirements and publishing them in the Federal Register. States then have to submit an action plan on how they plan to use the dollars.
“HUD hasn’t had the ability to create semi-permanent regulations. When there’s new disaster funding, we have to write a whole new set of regulations,” the HUD official noted.
That can add time, Stephen Begg, HUD’s deputy inspector general, told the House Financial Services Committee during a hearing on the issue in January.
HUD, for example, was delayed publishing notifications to states about the availability of the grants after Hurricanes Irma, Maria, and Harvey in 2017 because it went through “extensive negotiations” with the Office of Management and Budget over the requirements.
Frustrating to states, Eagle said during the webinar, “is the time it takes for notices to go up so that we can begin working on an action plan.”
Bush agreed. “It shouldn’t take this long to draft what should be considered to be boilerplate from disaster to disaster,” he said.
Biden in the budget plan he released in March for fiscal 2023 called for making the CDBG-DR program permanent.
His plan would “require HUD to establish consistent regulatory requirements for CDBG-DR across all future disasters, eliminating the current practice of establishing new requirements in response to each supplemental appropriation.” Those new rules would emphasize helping disadvantaged communities and prioritizing resilience to future disasters, the proposal said.
A more detailed measure from a bipartisan group of senators last year, led by Sen. Brian Schatz, a Hawaii Democrat, calls for establishing a more permanent pot of funding for the program so that HUD would be able to send out the money quickly after a disaster, rather than having to wait for Congress’ approval.
And, similar to Biden’s plan, one of the other changes the legislation proposes is to “codify program requirements” in order to cut down on the delays that arise with the current process publishing notices about CDBG-DR funding in the Federal Register.
“With natural disasters increasing in frequency and intensity, it is critical that states have the necessary resources to respond,” Susan Collins, a Maine Republican and one of the other Senators backing the bill, said in a statement at the time. The proposed changes, she said, “would allow communities to immediately focus on helping families and local businesses recover instead of navigating the federal bureaucracy in the wake of a natural disaster.”
The bill has the support of Sen. Sherrod Brown of Ohio, the Democratic chairman of the Banking, Housing and Urban Affairs Committee, which oversees HUD.
“Think about what these families are dealing with,” Brown said during a hearing on the issue in December. “Your home has been flooded or the business your family built was destroyed. You’re trying to deal with insurance claims. Bills are piling up. Debt collectors are calling. The last thing you want to deal with is more delays, more red tape, more confusion.”
To Winkler, the idea of making a federal program run more efficiently could attract GOP support, as well as the fact that many states hit hardest by natural disasters are Republican-leaning.
Some lawmakers, however, including Sen. Pat Toomey of Pennsylvania, the top Republican on the housing committee, are uneasy with the idea of making the program permanent, worrying that this would open the floodgates for more federal dollars to flow to it. He suggested at the hearing that states should be first in line to shoulder the responsibility with disasters.
“Theoretically, CDBG-DR is supposed to support longer-term recovery needs that aren’t met by other sources. I acknowledge there may be circumstances where it’s useful for the federal government to help meet these needs,” he said. “But we need to remember that states and local governments are primarily responsible for addressing such needs.”
And, he said, “currently, states and local governments are not lacking for financial resources to do that,” noting the federal dollars they are receiving through the American Rescue Plan Act, “record budget surpluses” and money on the way from the new infrastructure law.
“Why shouldn’t they plan and save for long-term disaster recovery and mitigation?” he asked.
Questioned by Toomey, Matt Mayer, who served as the U.S. Department of Homeland Security’s acting executive director for state and local government coordination during the George W. Bush administration, told the committee that more certainty with the federal funding would enable states to spend less on disaster preparedness.
“States and localities, like all creatures, will act according to their own interests and shift the money elsewhere,” he predicted.
Kery Murakami is a senior reporter for Route Fifty.
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