What to Know About the CDBG Disaster Recovery Program

Last month, President Trump signed H.R. 601 into law, providing $15.25 billion in disaster relief for victims of Hurricane Harvey. Of the amount, $7.4 billion goes to the Federal Emergency Management Agency (FEMA) to help meet immediate needs, and $450 million to the Small Business Administration (SBA) for disaster-relief loans. The remaining $7.4 billion goes to the Department of Housing and Urban Development (HUD) Community Development Block Grant Disaster Recovery (CDBG-DR) program for disaster relief and long-term recovery. This blog will explain what the CDBG-DR program is and how funds will be allocated and administered to disaster impacted communities.

After a major disaster, Congress may appropriate disaster recovery funds through the CDBG-DR program. CDBG-DR funds are considered separate from the annual allocations provided under the broader CDBG program, but HUD administers the CDBG-DR program through CDBG’s statutory and regulatory framework. CDBG is a popular federal program that provides flexible annual grants to states and local governments to help meet their community development needs (e.g., housing, infrastructure repair, public services, job creation). CDBG activities are initiated and developed at the local level with community input, and principally benefit low- and moderate-income (LMI) persons.

CDBG-DR dollars are only available to directly states and local governments located in major disaster declared areas; individuals, communities, and organizations cannot apply to HUD for funds. Eligible CDBG-DR activities generally fall into the broad categories of economic revitalization, restoration of infrastructure, and housing (which may include the rehabilitation of public housing units) in the most impacted and distressed areas. CDBG-DR funds cannot duplicate other disaster assistance (e.g., FEMA, the Army Corps of Engineers) available to impacted communities and their residents.

CDBG-DR is allocated through a formula that considers each community’s unmet recovery needs and capacity to administer disaster funds. The allocation method and grant awards are published by HUD through a Federal Register notice. This notice lays out the program rules, including eligible recovery activities, program requirements, and any waivers and alternative requirements. Notably, HUD can waive, or specify alternative requirements for, most of the program’s governing statutes and regulations. This allows the Department to tailor the CDBG program to the specific needs of each major disaster recovery effort. HUD typically takes two to three months after disaster funds are appropriated to publish a CDBG-DR notice.

CDBG-DR grantees must engage in citizen participation activities throughout the grant life-cycle. In order to receive funds, an Action Plan detailing the proposed use of disaster funds must be drafted, published for public comment, and submitted to HUD for approval. Affordable housing stakeholders in affected areas should engage and participate in this planning process, which allows the public to give input on how disaster funds are spent locally.

Historically, CDBG-DR has been a primary federal resource for communities to rebuild after a natural disaster. Since 1993, Congress has approved over $50 billion in CDBG-DR funds. Most are unaware of HUD’s important role of managing disaster recovery across the country. Unfortunately, the Trump Administration’s recent proposal to eliminate the CDBG program entirely would circumvent HUD’s ability to effectively deploy disaster recovery dollars to communities in need.

Much more will be needed to address the destruction caused by hurricanes Irma and Marie. When H.R. 601 was made law, Irma was on a path towards the U.S. and just making landfall in the Bahamas. While appropriation language allows funds to go towards all major disasters declared in 2017, the $15 billion will be largely taken up by victims of hurricanes Harvey and Irma; additional funding is needed to address the humanitarian crises in Puerto Rico and U.S. Virgin Islands, while still continuing the recovery efforts in Texas, Louisiana, and Florida.

On October 4, the White House formally requested $29 billion in additional disaster relief, which would provide almost $13 billion for FEMA, $16 billion for the National Flood Insurance Program, and over $576 million for wildfire suppression.

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