by Marion McFadden, JD, IEM Vice President for Disaster Recovery and former HUD Principal Deputy Assistant Secretary for Community Planning and Development
The 21st Century ROAD to Housing Act is now law, and it is set to reshape how communities recover from the worst disasters. For jurisdictions receiving Community Development Block Grant Disaster Recovery (CDBG-DR) funds, that means faster, more predictable, more transparent recovery ahead.
Title V of the bill includes the Reforming Disaster Recovery Act, which will help HUD and the jurisdictions receiving grants more quickly address unmet needs for housing, infrastructure and economic revitalization. In short, this law enhances the CDBG-DR program HUD has administered off and on for decades. It creates an improved, reliable framework that allows HUD a stable platform to support recipients. After disasters, the pace of recovery is important because lives have been disrupted and the financial impact to homes, businesses and public facilities and infrastructure compounds quickly.
Once implemented, changes will accelerate the pace of recovery, reduce administrative burden, and increase transparency and accountability. The law leans into intergovernmental coordination, technical assistance, long-term planning and resiliency, all while keeping its focus where it belongs, on people of modest means.
IEM is proud to directly support jurisdictions administering CDBG-DR, as well as to serve as a technical assistance provider on HUD’s behalf under the Community Compass TA program. Below is a summary of key aspects of the bill.
CDBG-DR’s First Rulemaking Process
The act is historic because it authorizes CDBG-DR separate from the annual CDBG program and directs HUD to complete formal rulemaking within a year. Currently, HUD administers the program via waivers and alternative requirements published in the Federal Register, an approach that has been a widespread source of frustration for those trying to put these dollars to work in their communities.
The rulemaking process gives the public a chance to weigh in on several key elements of CDBG-DR including:
- How HUD should determine which disasters are bad enough to warrant funding
- What methodologies should be used for formula allocation of funds
- Which level of government should receive a grant to address a disaster (Tribe, state, county or city)
- When a grantee must go back to the public for comment on changes to an action plan
- The amount that a grantee can use for administration, technical assistance and planning, which is capped at 20% overall, with no more than 8% of that for administration (which is currently capped at 5%)
- What constitutes a hazard-prone area
- What building standards and insurance requirements should apply to hazard prone areas
- Applicability of relocation assistance requirements for people displaced by construction
- How HUD should evaluate progress toward recovery under the grant
That list touches nearly every part of how CDBG-DR works today, so this rulemaking is a genuine opportunity to shape the program’s future.
The Long-Term Disaster Recovery Fund
One of the most promising elements of the Reforming Disaster Recovery Act is the creation of a Long-Term Disaster Recovery Fund to support major declared disasters that have a catastrophic impact on communities. It must be used to prioritize meeting the needs of vulnerable populations to recover and withstand future needs, and it can address housing needs stemming from a disaster or existing before it, among other uses.
HUD is required to quickly decide whether a disaster qualifies for funding, within 90 days of a disaster declaration, or up to 120 days if more data is needed. Up to $5 million can be provided to jurisdictions immediately, which will be especially helpful for “startup” grant administration costs, like hiring additional staff and engaging contractors to conduct unmet needs assessments and preparing the required action plan.
Here’s the catch. The bill doesn’t put any money into the Fund. Instead, the Fund will rely on future appropriations and very small amounts of funding already on hand, which HUD can transfer in from old CDBG and CDBG-DR grants (at any given point, this is likely to be a few million dollars or less). Once funded, HUD may be able to make grants very quickly after the worst disasters. And after allocating the funds on hand, HUD will need to make additional allocations within fifteen days of new appropriations.
Grantees will be required to divide their funds among housing, infrastructure and revitalization according to proportions set by HUD, unless HUD finds a “compelling need” to spend it differently and determines that the new proportions would not be inconsistent with prioritizing the needs of extremely low, low- and moderate-income individuals.
Statutory Deadlines
Several clocks are now running. Here’s what to expect and when.
- HUD has 30 days from enactment to issue a Notice in the Federal Register with the last used formula, seeking public feedback on improving the methodologies for making formula awards, including suggestions to better consider impacts on rural and tribal communities.
- HUD has one year to issue final CDBG-DR regulations.
- Grant recipients have 90 days from announcement of awards to submit an action plan to HUD, unless extended.
- HUD has 60 days to approve, partially approve, or disapprove action plans and substantial amendments.
- Grantees have six years to spend funds for disaster recovery, with up to an additional four years allowable, and six years for mitigation funds, with up to an additional six years. Grantees can keep up to 10% of remaining funds at grant closeout to support capacity for launching a future grant and to support long term recovery and mitigation planning.
The Reforming Disaster Recovery Act authorizes CDBG-DR for three years. The law explicitly acknowledges that the sunset will not stop Congress from making future CDBG-DR appropriations.
Increased Transparency and Accountability
The law puts heavy new compliance and sunshine requirements on grant recipients. HUD must conduct at least annual reviews and audits to ensure grantees are acting in a timely manner and hitting performance targets. HUD will develop critical performance targets and make them publicly available, though the law does not appear to require HUD to include the targets in rulemaking. If a grantee misses one or more targets, HUD can temporarily suspend the grant and implement a performance improvement plan. If a grantee fails to meet spending thresholds, it must submit a written justification to HUD, the appropriations committees of the House and Senate, and individual members of its own Congressional delegation, detailing the technical capacity, funding or other federal or state requirements creating impediments to hitting those thresholds.
Taken together, these accountability measures should give both Congress and the communities we serve more confidence that CDBG-DR dollars are reaching the people who need them, faster and more visibly than ever before.