Disaster Housing Recovery Update, Tuesday, December 19, 2017

The big news:  Last night the House released its $81 billion disaster aid package.  According to Politico, it is the largest single funding request for natural calamities in U.S. history and nearly doubles the White House’s request for $44 billion. The expectation is that the bill (HR 4667 by Rep. Frelinghuysen of New Jersey) will be approved this week as part of the stopgap funding bill. If enacted, it would be the third supplemental enacted since September for hurricane- and wildfire-ravaged states, and it would bring the emergency spending to a total of $132.75 billion.

Some Democrats criticize the disaster relief bill for not waiving cost-sharing requirements, failing to address Puerto Rico’s Medicaid shortfall, and provisions that insert an oversight board in Puerto Rico’s recovery.

Below is our initial summary of the disaster bill.  We will provide more detail as we review the package more carefully and provide any additional information in a Wednesday update.

Here are some highlights:

  • $27.6 billion for FEMA’s Disaster Relief Fund;
  • $26.1 billion for CDBG-DR;
  • $1 million for legal services; and
  • $18.7 million for USDA Section 515 loan to repair multifamily housing.

Community Development Block Grant – Disaster Recovery

Of the $26 billion provided in CDBG-DR funds, $12.5 billion will be targeted to mitigation efforts, with the rest slated for addressing unmet needs. Up to $10 million will go to capacity building and technical assistance. The bill makes it clear that local governments and Native tribes are eligible to serve as CDBG-DR grantees, in addition to states. At least one-third of the CDBG-DR funds must be allocated to states within 60 days of enactment.

Each grantee will be required to submit a detailed plan to HUD, outlining how it will use these funds, “including criteria for eligibility and how the use of these funds will address long-term recovery, restoration of infrastructure and housing, economic revitalization, and mitigation in the most impacted and distressed areas.” Any grantee that receives more than $3 billion in CDBG-DR funds will be required to report to the Appropriations Committee on its efforts to “provide adequate resources and technical assistance for small, low-income communities affected by natural disasters.”

The bill directs the Governor of Puerto Rico to meet additional requirements for CDBG-DR funds. Specifically, it requires that the Governor submit a plan to Congress describing Puerto Rico’s 12-month and 24-month disaster recovery plan, related to housing, economic issues, and infrastructure, among many other areas. This plan must be developed with the island’s oversight board established under PROMISA. The oversight board also must approve any expenditure over $10 million.

Disaster Recovery Reform Act

The disaster package includes the Disaster Recovery Reform Act, which passed out of committee on November 30. The bill provides reforms to FEMA’s response and recovery programs, focusing on increased pre-disaster planning and mitigation.

The reforms include a provision that could impact how CDBG-DR is allocated. Currently, those who receive a disaster recovery loan from the Small Business Administration (SBA) are not eligible to receive additional funding later through CDBG-DR, which is meant to target people with modest incomes who cannot afford a loan. The DRRA allows recipients of SBA loans to also receive CDGB-DR funding to repay the loan or cover additional disaster-related damages. This provision could take funding away from the lowest income people in favor of those with more financial stability.

The bill would also allow a state to administer temporary and permanent housing construction programs with approval from the president. The state would be required to demonstrate an ability to manage the programs, comply with federal laws, and make efforts to combat waste, fraud, and abuse. The president, in consultation with the state, would determine any other criteria necessary for approval of the housing plan. The bill also amends the Stafford Act to ensure that if the federal government contracts with private landlords under FEMA’s Multifamily Lease and Repair program, the value of repairs are removed from the value of the contract.

Tax Provisions

The bill provides some tax relief to people impacted by recent wildfires. For example, the bill allows those who have lost property to wildfires to deduct damage costs on their taxes, and it would remove the penalty for withdrawing money from a retirement account. The bill also provides a tax credit of up to $6,000 for employers located in areas impacted by the wildfire to help them keep staff. It also helps incentivize donations to people and regions rebuilding after wildfires.

The bill also extends provides that each census tract in Puerto Rico that is a low-income community shall be deemed to be certified and designated as a qualified opportunity zone.

FEMA response by the numbers

Below is a table provided by FEMA with the number of individuals who applied for assistance and the status of their applications, including the number of people denied assistance and the reasons for denial, by state.  For more detail, go to: http://bit.ly/2BAejnc

By State/Territory and Disaster Referrals Pending Withdrawn Ineligible Approved
USVI (Maria) 18,645 2,796 774 7,524 7,551
PR (Maria) 845,484 147,316 67,418 271,566 359,184
GA (Irma) 27,466 788 1,956 15,571 9,151
FL (Irma) 1,921,826 29,510 107,554 1,021,363 763,399
PR (Irma) 3,434 321 388 1,539 1,186
USVI (Irma) 13,525 1,261 576 4,971 6,717
TX (Harvey) 740,076 3,959 49,304 325,742 361,071
CA (Wildfires) 15,084 310 1,431 9,058 4,285
Total 3,585,540 186,261 229,401 4,569,577 1,512,544

 


LETTERS TO GOVERNORS

With 197 organizations signing on, the letters to the governors of Texas, Florida, and Puerto Rico went out yesterday.  These support a formal request from each for robust federal housing resources and programs, including the U.S. Department of Housing and Urban Development’s (HUD) Disaster Housing Assistance Program (DHAP), as well as a special allocation of the Low Income Housing Tax Credit, national Housing Trust Fund, HOME Investment Partnerships Program, and New Markets Tax Credit.


CALIFORNIA WILDFIRES

USDA

On Friday, December 15, the USDA Forest Service reported that its presence in southern California has increased, as nearly 950 personnel are engaged in the effort to fight the raging fires. Currently still burning, the Thomas Fire in Ventura County has already consumed over 250,000 acres, with as many as 18,000 homes threatened.

HURRICANE MARIA

Puerto Rico

Local Perspective

A couple of our partners have made recent trips to Puerto Rico to return with videos and photographs of what they found.  Volunteers of America reported back from Yabucoa, which is still in rough shape compared to San Juan.  No power and not expected to have power until January or February, although power trucks are working at it.  At a baseball stadium, the primarily metal construction looked like a giant had lifted it, wadded it up, and dropped it back on the site.  Snapped power poles were common.  One of the pictures shows a fire station’s exterior with numerous places where the paint was literally blown off the building.  One of the most telling indicators of life in Yabucoa was the large cheer that went up in response to a national guard truck that had arrived with a full load of bottled water.  This was being passed out to a line of what must have been close to 100 people, standing waiting in the strong sun.  The resilience of the Puerto Rican people was noted by VOA as remarkable.  Even in Yabucoa, they appeared to be conducting life as usual, without grid power, without water, but making do with what they had and continuing to live life as they knew it prior to Maria as best they could.


HURRICANE IRMA

Florida

Local Perspective

Thousands of people still lack sustainable access to potable water and electricity and dry, safe places to sleep, according to a report by Refugees International.  It describes a response by federal and Puerto Rican authorities as still largely uncoordinated and poorly implemented—thereby prolonging the humanitarian emergency on the ground.  Maria survivors are encountering challenges navigating FEMA’s bureaucratic and opaque assistance process and lack sufficient information on whether, when, and how they will be assisted.


HURRICANE HARVEY

Texas

Local Perspective

Yesterday Governor Greg Abbott issued a proclamation extending the State Disaster Declaration for Texas counties affected by Hurricane Harvey, which must be renewed every 30 days for assistance to remain available after Hurricane Harvey. There are currently 60 counties included in the state disaster declaration.

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