On October 18, the Senate Appropriations Committee released their nine remaining Fiscal Year 2022 (FY22) appropriations bills.

The bills included the Reforming Disaster Recovery Act (S.2471), introduced by Senators Brian Schatz (D-HI), Susan Collins (R-ME), Todd Young (R-IN), Patrick Leahy (D-VT), Bill Cassidy, M.D. (R-LA), Ron Wyden (D-OR), and Representative Al Green (D-TX). 

If enacted, the Reforming Disaster Recovery Act would permanently authorize the federal government’s long-term disaster recovery program, HUD’s Community Development Block Grant–Disaster Recovery (CDBG-DR) program.

CDBG-DR provides flexible grants to help cities, counties, and states to recover from Presidentially declared disasters, especially in low-income areas and rebuild affordable housing and other infrastructure after a disaster. 

In addition to codifying CDBG-DR in statute, the bill contains critical reforms to help ensure a more efficient and equitable post disaster recovery and mitigate future risks by: 

  • Authorizing the creation of a CDBG-DR Reserve Fund that can quickly disperse initial recovery funding post disasters without waiting for congressional approval 
  • Developing a formula to allocate assistance to the most impacted areas 
  • Maintaining the current requirement that 70 percent of the funds benefit low- and moderate-income people 
  • Creating a capacity building and technical assistance set aside for grantees
  • Requiring federal agencies to share all data to improve coordination of the disaster recovery process, as well as increase oversight and data transparency 
  • Ensuring that state action plans receive at least 14 days for public comment and requiring states to engage with stakeholders in the impacted areas
  • Promoting disaster mitigation and resiliency by establishing an Office of Disaster Recovery and Resilient Communities at HUD
  • Creating a significant set-aside for disaster mitigation activities 
  • Creating specific minimum construction standards for areas designated as Hazard- Prone by HUD and FEMA 

These reforms are critical as the nation faces catastrophic, life threatening extreme weather events, including stronger hurricanes, extreme heat, unprecedented drought, and severe wildfires.

CDBG-DR funds can be used for the restoration of housing and infrastructure, economic revitalization, and mitigation measures after major catastrophes occur.

CDBG-DR is also the difference maker for property owners whose insurance proceeds, FEMA grants, and SBA homeowner loans have been insufficient to repair homes and other infrastructure, as well as support small businesses cover uninsured losses to operate in a disaster-impacted economy.  

The entire program is designed to primarily benefit low-income people and communities that lack the resources to rebuild. The usual CDBG requirement is that 70% of funds must benefit people with low and moderate income.

This is crucial since low-income people are more likely to live in areas that have greater risk of natural disasters due to the nation’s history of systemic racism including policies such as redlining and housing discrimination. 

Since 1993, over $89.8 billion has been appropriated by Congress for CDBG-DR grants, $15.9 billion of which were allocated in the recent years following major disasters that occurred from 2015 to 2018. As of April 2021, 137 grants were awarded to 64 grantees.

Although CDBG-DR has become a critically important resource for communities recovering from natural disasters, the program is currently unauthorized. FEMA, the Small Business Administration, and other federal agencies have standing resources to serve communities when disasters strike.

However, HUD only receives disaster recovery funding when Congress passes special appropriations for CDBG-DR. After each appropriation, there is a delay in the flow of funds, because HUD must assess uninsured damage and unmet needs and write a new set of waivers and alternative requirements to guide state and local grantees.

Before recovery projects can begin, CDBG-DR grantees then need to learn the new rules, make policy choices, and stand up their own disaster recovery programs. Studies have found that there can be delays of up to three years from when the disaster hits to when CDBG-DR funds start reaching communities on the ground.

This delay compounds the harm that individuals and families suffer. Permanently authorizing the program would address these issues with the creation of the Reserve Fund that can quickly allocate funding without waiting for Congress, developing a formula to allocate assistance to the most distressed areas as well as prioritizing transparency, data sharing and public participation are all critical provisions to strengthening the program. 

In addition, since Congress has not codified CDBG-DR, HUD has never asked for public input on how to improve the program. Permanent authorization and the formal rulemaking process would bring more transparency to CDBG-DR and result in greater stakeholder engagement in the process.

Additionally, the permanent authorization of the program would allow HUD to have greater hiring authority and capacity to administer CDBG-DR, which in turn would enable HUD to provide more assistance to grantees and better oversight of grantee use of taxpayer funds.

Enterprise strongly supports the Reforming Disaster Recovery Act and urges Congress to include the language in the final FY22 appropriations legislation, targeting funds to disaster survivors most in need and providing meaningful relief to millions of Americans.