“Community Development Block Grant-Disaster Recovery Program – Stakeholder Perspectives.”
INTRODUCTION
Chairman Wagner, Ranking Member Green, and members of the
Enterprise invests in disaster recovery work, because people of modest means are most likely to be harmed by disasters and tend to be the slowest to recover. We work to ensure that the people who need help the most are able to get back on their feet more quickly. We have worked to help communities rebuild from disasters since Hurricane Katrina, when we established an office in the
Enterprise assisted
Enterprise's policy recommendations are informed by our work with grantees and communities and are aimed to utilize disaster recovery resources more efficiently and get help to the people who need it the most more quickly. To strengthen the CDBG-DR program, Enterprise recommends that
. Create a set-aside for capacity building and technical assistance for all CDBG-DR appropriations.
. Require HUD to allocate a portion of assistance within 60 days and expand the remaining balance in a longer but specified timeframe.
. Direct HUD to design pre-approved model programs and systems that grantees can take off the shelf and implement wholesale.
. Ensure that grant funds reach those who need them the most.
. Direct HUD and grantees to implement mitigation standards.
. Expand resources for HUD's administration of disaster recovery;
. Ensure that disaster recovery funding reaches all who need help.
I have worked on disaster recovery since 9/11. When I was just a year out of law school, serving as a lawyer for the CDBG program at HUD, I lost a dear family friend in the
My testimony will cover three subjects: 1) the importance of CDBG-DR to communities, 2) the benefits of mitigating future risk, and 3) opportunities to strengthen the CDBG-DR program to make it faster and less expensive for low-income families and communities to recover.
1) CDBG-DR IS A VALUED RESOURCE FOR URBAN, SUBURBAN AND RURAL COMMUNITIES AFTER DISASTERS
As the frequency and intensity of natural disasters continue to increase, CDBG-DR has become an important program for recovering communities. Last year, natural disasters caused a record-breaking
It has been said that there is never a time when people need the federal government more than after a disaster. After major catastrophes, CDBG-DR is the difference maker for property owners whose insurance proceeds,
CDBG-DR gives states and communities control over how to design their rebuilding programs--some states may choose to focus on homeowner rehab, while other states may want to stand up buyback programs. CDBG-DR is also flexible and can be used as leverage for other public funds and private resources. For example, after Hurricane Katrina, Enterprise and
2) MITIGATION IS AN ESSENTIAL PART OF FEDERAL INVESTMENTS IN RECOVERY
CDBG-DR allows states and localities to rebuild in a forward-facing manner, not putting back what was lost as it was, but rather rebuilding stronger and safer so that federal dollars do not put people back in harm's way or throw good money after bad. Uses of CDBG-DR for mitigation include buying out homes most likely to experience repeated flooding and moving residents to higher ground, then restricting the future use of the property to green space; creating gray and green infrastructure solutions to prevent flooding, such as natural berms and installing pumps and erecting sea walls; attaching roof straps and hardening structures in tornado-and earthquake-prone areas; and installing windows rated to withstand high winds; Enterprise applauds
Mitigation measures have been proven to more than pay for themselves. A
HUD requires elevation of critical facilities such as nursing homes and hospitals even higher above the base flood elevation, when they are located in flood plains and substantially assisted with CDBG-DR. We recommend that
3) OPPORTUNITIES TO STRENGTHEN THE CDBG-DR PROGRAM
We recommend permanent authorization of CDBG-DR, which would allow HUD to write regulations and develop model programs, policies, and systems that grantees could adopt to shorten the time it takes to get people home again permanently. Authorization of CDBG-DR could also settle key matters of policy that have been treated inconsistently over time by
Agency officials working on disaster recovery across all levels of government should be held in high regard for diving into the taxing and unpredictable work of rebuilding communities that have been torn apart by a major disaster. However, it is indisputable that our nation's disaster recovery must be improved so that taxpayer dollars get to work on the ground rebuilding communities with greater speed and accountability.
One major challenge for communities is the time it takes for HUD funds to reach them.
Even after
RECOMMENDATIONS
Create a set-aside for technical assistance and capacity building for all CDBG-DR allocations.
No community is ever truly prepared for a catastrophic disaster. Residents and local government officials must navigate multiple federal agencies and programs, each with their own rules. This is not a case of high-capacity versus low-capacity jurisdictions; Even New York City, our nation's largest city and the single largest recipient of yearly CDBG entitlement funds, took well over a year to begin rebuilding through its CDBG-DR homeowner rebuilding program after Hurricane Sandy; HUD's disaster recovery team is small, with fewer than 20 permanent staff assigned to working on CDBG-DR at any given time. This mean each individual staffer has a portfolio of billions of dollars to manage. Though supported by term hires authorized in supplemental CDBG-DR appropriations, HUD's career-service CDBG-DR experts cannot provide the individual attention and customized training and strategic support states and localities would like to have to design and implement efficient programs in a timely manner. We recommend that
We also recommend that future disaster appropriations include funding for providing cross-cutting support to disaster-impacted communities through a network of non-profit or private sector organizations that have a proven track record of providing assistance to multiple jurisdictions across various disciplines, including housing recovery, economic development, workforce development, fiscal efficiency, and promoting best practices. Disaster impacted jurisdictions have often asked HUD for more opportunities to come together and connect with other communities facing similar challenges. Creation of a peer network would remove some of the burden on HUD staff to support grantees.
Technical assistance and capacity building support for disaster recovery grantees can build on the success of the National Resource Network (NRN) model. NRN is administered through a consortium selected by HUD, including Enterprise, and was created to support economic turnaround in economically-distressed smaller cities. Since its launch, NRN has partnered with more than 50 cities in 22 states to address local challenges including poverty, health care access, and unemployment to increase their overall competitiveness. Communities recovering from major disasters could benefit from a network of experts while administering their hundreds of millions or billions of dollars in CDBG-DR.
Require HUD to allocate a portion of assistance within 60 days and expand the remaining balance in a longer but specified timeframe.
HUD should allocate CDBG-DR funding as quickly as possible after it is appropriated so that grantees can prepare for an influx of disaster funding by doing back-of-the-house work such as ensuring sound financial management policies, procedures, and systems and hiring sufficient staff to prevent and detect fraud, waste, and abuse over the course of the recovery.
We recommend that
Getting long-term recovery dollars to move more quickly into communities will have the collateral benefit of moving private investments more quickly as well.
CDBG-DR pairs well with philanthropic funding. After disasters, philanthropic donors often wait to get an idea of what role the federal government will play. Permanently authorizing CDBG-DR and pushing grant funds within 60 days of appropriation will make it quicker for private philanthropy to gain certainty about what role they can play to fill gaps in individual projects and identify disaster victims who have not been served by government programs and cannot afford to recover on their own.
Direct HUD to design pre-approved model programs and systems that grantees can take off the shelf and implement wholesale.
HUD should design pre-approved model programs and systems that grantees can take off the shelf and implement wholesale. While different communities have different needs, having each grantee design disaster housing assistance programs essentially from scratch after each disaster wastes time and money to create programs that often look very similar. HUD could design programs that would comply with all of its own requirements, thus giving grantees a safe harbor in using pre-approved programs. Those programs should include the ability to reimburse property owners for work done according to a reasonable "blue book" value of the cost of non-luxury repairs, verified by documented on-site damage inspection reports before work commences and inspection of properties upon completion. This approach, rather than requiring submission of individual receipts, allows for much faster flow of funds without sacrificing oversight.
By doing the work to offer efficient program designs upfront, HUD would enable jurisdictions to be able to plan for how they would use CDBG-DR funds if ever needed, before a major disaster is ever on the horizon. While we know of no studies comparing the total cost of recovery to the amount of time households are in emergency and interim housing, it stands to reason that the better financial option for the government is getting people home again more quickly and thus paying for only one home per household.
Ensure that grant funds reach those who need them the most.
The usual CDBG requirement is that 70 percent of funds benefit people with low and moderate income (calculated as up to 80 percent of area median income). CDBG-DR appropriations have allowed differing degrees of flexibility to lower this bar over time, sometimes giving the Secretary express authority to lower the overall benefit requirement to just about half of funds being used to primarily benefit the low-and moderate-income households, effectively permitting a greater percentage of funds to reach higher-income people. We support retaining the 70 percent requirement unless a grantee can establish that there is a compelling need to lower it once the needs of lower-income households, including homeless people, have been addressed.
CDBG-DR is put to its best use in helping low-income households recover, but there are many circumstances when it would be appropriate to serve higher-income households in order to ensure the entire community's recovery; We recommend that grantees be required to establish reasonable caps on assistance to families by income level.
Direct HUD and grantees to implement mitigation standards.
CDBG-DR should include the rebuilding and mitigation standards promulgated by HUD earlier this year in 83 FR 5844(6)(B) and codify that buildings built or substantially rehabilitated using CDBG-DR funds be required to meet elevation standards and home construction standards that mitigate the risk of future harm and reduce energy costs, including continuing to encourage the use of Enterprise's
Green Communities Criteria.
Require households earning over 120 area median income to apply for
Enterprise supports HUD's current policy prohibiting CDBG-DR funds from being used to repay an SBA loan. From a public policy perspective, if a household is deemed creditworthy and able to afford a disaster recovery loan by the SBA, then that household should repay their own loan. We recommend that families with income over 120 percent AMI be required to apply for, and if approved, take and use SBA homeowner loans before applying for CDBG-DR to address any additional costs of rebuilding that remain after SBA loans (and
Streamline the environmental review process.
While we wholeheartedly support the concept of ensuring that federal investments are not used to create unsafe living conditions or undue harm to the environment, in practice environmental reviews (including compliance with related laws such as historic preservation) have added incredible time and cost to the recovery process. A particular cause of frustration for communities has been meeting competing requirements when funds from multiple agencies - like
Increase HUD's resources for oversight and administration of disaster recovery.
HUD's disaster recovery division has fewer than 20 permanent staff; Given the tens of billions of dollars in the portfolio, we recommend that
We recommend increasing the amount available for HUD's own CDBG-DR administration, which is used for purposes such as hiring temporary employees to assist with grant management and evaluation, training of grantees, management of grantee reporting systems, and travel costs for HUD staff to do on-site monitoring of grantees. Dedicated funding should be provided for the
We support giving HUD the ability to combine administrative fund accounts from multiple disaster appropriations, for ease of administration.
Create a carve-out in CDBG-DR for small businesses.
Too often after disasters, small businesses fail before CDBG-DR assistance arrives a year or more after the disaster. Many small businesses have never had a loan of any kind, and therefore small business owners lack experience filling out applications. SBA loan can be too complex or not offer enough for recovering small businesses. We recommend creation of a carve-out in CDBG-DR for a pre-approved small business assistance program that would help grantees reach small businesses to help them get back on their feet within the first several months post-disaster.
Ensure that disaster recovery funding reaches all who need help.
Despite the best of intentions, government-led recovery programs often miss or fail to fully serve large groups of disaster victims who qualify or would qualify to receive long-term recovery assistance. For example, past grantee outreach efforts have failed to reach owners and renters of manufactured and mobile homes, public housing residents, the low-income elderly, and homeless individuals. We recommend that HUD direct CDBG-DR grantees to work with local nonprofit organizations to reach local residents as soon as possible after the disaster and on an ongoing basis to assess and address their recovery needs. Enterprise is committed to sharing publicly successful strategies to identify and take applications from storm victims wherever they are located, including from our current work with the
Support communities receiving households dislocated by disaster.
After the worst disasters, some residents make the tough choice to leave their home jurisdictions completely, relocating to non-disaster-impacted areas in search of stable homes, jobs, schools, health care, and transportation. The costs of the communities taking in low-income people who have been displaced can be considerable, but no federal program specifically supports receiving communities at scale. We recommend that
CONCLUSION
Disaster recovery is never fast enough for impacted families. As I have traveled to disaster-impacted communities and met survivors from all over the country, I have been told many times, some variation of this: "If I had known how long it would take to get back home again, or find a new place to live permanently, I would have done things differently;" People who are initially grateful for their safety and willing to try to make the best of living on a family member's couch or shuttling between
n1
n2 Wing, Bates, Smith, et al; "Estimates of present and future flood risk in the coterminous
n3
n4 The Times-Picayune's
n5 Leicht, Holly, "REBUILD THE PLANE NOW: Recommendations for Improving Government's Approach to Disaster Recovery and Preparedness;"
Read this original document at: https://financialservices.house.gov/UploadedFiles/HHRG-115-BA09-WState-MMcFadden-20180517.pdf
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