July 30, 2019

Senate Legislation Introduced to Permanently Authorize the Community Development Block Grant – Disaster Recovery Program

Share Posted By:

On July 26, U.S. Senators Brian Schatz (D-HI) and Todd Young (R-IN) introduced new legislation that would improve and permanently authorize the Community Development Block Grant – Disaster Recovery (CDBG-DR) Program. The “Reforming Disaster Recovery Act of 2019” (S.2301) will strengthen administration and oversight of the CDBG-DR Program to ensure the disaster recovery funds are distributed more efficiently and fairly.

In addition to codifying CDBG-DR in statute, the bill includes provisions that: 

  • Establish an Office of Disaster Recovery and Resilient Communities.
  • Authorize the Creation a CDBG-DR Reserve Fund.
  • Direct HUD to issue regulations for the CBDG-DR Program.
  • Prioritize funds for low- and moderate-income disaster survivors.
  • Create a significant set-aside for disaster mitigation activities.
  • Ensure that investments result in infrastructure and communities resilient to future disasters.
  • Set reasonable timelines for allocation, action plans, and grant agreements.
  • Create a capacity building and technical assistance set aside for grantees.

Companion legislation introduced by Representatives Al Green (D-TX-9) and Ann Wagner (R-MO-2), (H.R. 3702), passed out of the House Financial Services Committee with unanimous bipartisan support on June 16. 

Background 

As of June 2019, the CDBG-DR Portfolio includes 137 grants totaling $89.7 billion to 58 grantees, including 30 states and territories and 28 local governments. Despite the program lacking standing authority to provide funds to disaster-impacted states and localities, CDBG-DR's role in post-disaster recovery continues to grow among the patchwork of federal disaster response and recovery programs.

After each disaster supplemental appropriation, HUD issues a Federal Register notice that sets the requirements and waivers for that allocation. From Hurricane Katrina in 2005 to Hurricane Michael in 2018, HUD has learned from mistakes and successes in previous post-disaster rebuilding programs, but in doing so, published over 60 Federal Register notices that grantees must consult when developing their action plans and implementing their rebuilding programs. This ad hoc system results in different requirements and waivers for different grantees, confusion and frustration among grantees, and inconsistent and unfair disaster recovery outcomes across grantees.  

An audit by the HUD Office of Inspector General (HUD OIG) published in August 2018 reported that “59 grantees with 112 active Disaster Recovery grants, which totaled more than $47.4 billion as of September 2017, had to follow requirements contained in 61 different Federal Register notices to manage the program.” It found that codification of CDBG-DR in statute would ensure a permanent framework in future disasters and standardize the rules for all grantees. A Government Accountability Office (GAO) report from March 2019 also recommended that Congress permanently authorize a disaster recovery block grant program at HUD to address unmet needs in disaster-affected areas in a more timely manner.

Creates Office of Disaster Recovery and Resilient Communities

The bill establishes the Office of Disaster Recovery and Resilient Communities at HUD within the Office of Community Development and Planning. The Office of Disaster Recovery and Resilient Communities will have two divisions. The Resiliency Division is charged with developing, coordinating, and maintaining community capacity for disaster resilience and recovery for recipients of CDBG-DR funds. As well as, coordinating and operationalizing research and policies to assist areas in community resiliency planning, including hazard mitigation and adaptive land use planning. They will also be able to assist grantees in the development of action plans after a major disaster and help establish and carry out enforcement activities. The Recovery Division shall oversee the disaster recovery policy and response. This provision was not in H.R. 3702 which passed out of the House Financial Services Committee.

Authorize the Creation a CDBG-DR Reserve Fund 

This piece of legislation will create an account within the Department of the Treasury called the Community Development Block Grant Disaster Recovery Reserve Fund. This fund will be used for immediate post-disaster costs and capacity building in advance of a congressional appropriation of CDBG-DR. The Senate bill adds an extra feature, that authorizes HUD to allocate funds to grantees for disaster homelessness assistance within 14 days of a disaster declaration, provided that such funds serve households experiencing or at risk of homelessness that are not receiving rental assistance from FEMA. 

Prioritizing Low- and Moderate-Income Households

The bill codifies in law that no less than 70 percent of funds benefit people with low and moderate incomes. In their action plans and rebuilding programs, grantees must also: equitably allocate funds between housing and infrastructure and between homeowners, renters, and people experiencing homelessness; prioritize one-for-one replacement of federally subsidized housing; and include a description of how the use of funds with comply with civil rights and fair housing laws and regulations. 

Rulemaking and Best Practices 

Permanent authorization will create framework for future CDBG-DR grantees.  The bill directs HUD to issue proposed legislation no more than six months after enactment, conduct a 90-day open comment period, and issue a final rule no more than 12 months after enactment. Formal regulations will remove roadblocks that slow down recovery and result in fairer and more consistent recovery outcomes.  Additionally, the bill directs HUD to develop a compilation of best practices either through regulation or Federal Register notice, that includes: guidelines for housing and economic development programs and mitigation activities and model language on program design for grantees to incorporate into action plans. 

Resilience Standards and Mitigation

The bill includes a significant set aside for disaster mitigation, requiring HUD to include a set aside for mitigation that is no less than 45 percent of the amount awarded to a grantee for unmet needs. A report from the National Institute of Building Sciences (NIBS) found every dollar that the federal government spends on mitigation saves $6 in future disaster recovery costs. The legislation also requires any structure located in a special flood hazard area being rebuilt or rehabilitated with CDBG-DR funds to be elevated to at least two feet above the base flood level. Enterprise supports these resilience standards and investments in mitigation so that disaster recovery programs do not rebuild communities in harm’s way and throw away good money after bad. 

Next Steps

Enterprise strongly supports S.2301 and will continue to advocate and build support for its passage in the Senate. We encourage our partners to reach out to their Senators and urge them to support S.2301 to make our nation’s disaster recovery framework more efficient, consistent, and fair.

We also encourage our partners to reach out to Representatives in the House to continue to push for the companion bill H.R. 3702

Opp360 logo

For full access to our tools and resources, please provide the information below.

We use this data to better understand our users; we do not sell or share this data. By providing this information, you can expect to receive newsletters and other updates from Opportunity360.