May 21, 2018

Enterprise Testifies Before Congress on Strengthening the CDBG-DR Program

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Marion McFadden testifies before Congress

In a House Financial Services Oversight and Investigations Subcommittee hearing last week, Enterprise vice president for Public Policy Marion McFadden called for permanently authorizing and strengthening the Community Development Block Grant – Disaster Recovery (CDBG-DR) program. Marion highlighted challenges with the CDBG-DR program, including the time it takes for recovery funds to reach communities after disasters as well as HUD’s limited organizational capacity to administer program funds. She recommended solutions for strengthening the CDBG-DR program and to ensure that recovery funds are administered efficiently and effectively. 

Marion was joined on a panel of stakeholders and experts from the City of Houston, the State of Texas General Land Office, Harris County, TX; and the Urban Institute. Witnesses highlighted the value of CDBG-DR as a bridge between disaster and long-term recovery as well as the program’s flexibility to allow communities to address their local housing and infrastructure needs following a major disaster. 

Subcommittee Chairman Ann Wagner (R-MO-2) expressed concern that in current policy the CDBG-DR program is administered through Federal Register notices, which slows down the movement of funds from HUD to communities, and while other members of the subcommittee sought guidance on how investments in hazard mitigation can save taxpayer dollars in the future. Ranking Member Al Green (D-TX-9) sought recommendations on how to direct recovery funding as quickly as possible to victims as well as how to improve accountability of how dollars are spent.

Permanent Authorization

In her testimony, Marion advised that “permanent authorization of CDBG-DR would allow HUD to write regulations, create pre-approved model housing programs, and develop systems that grantees could quickly customize and adopt to shorten the time it takes to get people home again.” Disaster recovery grantees face many choices and challenges when standing up rebuilding programs, Marion explained, and that pre-approved disaster rebuilding and recovery programs could provide certainty and safe harbor to grantees as well as put recovery funds to work in communities sooner. 

Investing in Capacity

Marion recommended that in permanently authorizing the program, Congress should “better prepare communities to administer taxpayer dollars by expanding HUD’s ability to support their administration.” Since HUD had limited resources for administering CDBG-DR, Marion explained that investments in HUD’s human capacity would make the program more efficient, and she urged Congress to authorize additional permanent career HUD staff dedicated full time to disaster recovery work as well as to create a set-aside for capacity for technical assistance and capacity building in all CDBG-DR appropriations.

Hazard Mitigation and Building for the Future 

In her testimony, Marion remarked on the increasing frequency and cost of major natural disasters and pointed to evidence that each dollar invested in hazard mitigation saves an average of six dollars in future disaster recovery costs. She praised how states and localities can use CDBG-DR “to rebuild in a forward-facing manner, rebuilding stronger and safer so that federal dollars to not put people back in harm’s way or throw good money after bad.”

Enterprise saw these savings last summer when a heavy rainfall caused widespread waist-deep flooding in New Orleans. However, Enterprise’s CDBG-DR-funded Faubourg-Lafitte development avoided damage, because the homes were built an additional two feet above the base flood elevation. Marion remarked that “while building two feet above base flood elevation was not required at the time, HUD now wisely requires that level of elevation.”

Next Steps

In her concluding remarks, Marion recommended that “Congress act with urgency. 2017 was a particularly bad year for disaster, but we know that bad years will come again. So act now to make these changes and ensure that CDBG-DR dollars are available to the people who need them.”

Enterprise appreciates the opportunity to testify in this hearing and looks forward to working with Chairman Wagner and Ranking Member Green to further this promising bipartisan initiative.

Written Testimony

For more information on Enterprise's recommendations, see Marion's full written testimony

Watch the Full Testimony

Watch the full hearing.