HUD Awards Unprecedented $28 Billion of Disaster Recovery Grants

States and localities hit in recent years by natural disasters like hurricanes, floods and wildfires learned Tuesday what share they would receive of a massive $27.9 billion allotment of U.S. Department of Housing and Urban Development grants.

The funding comes via the Community Development Block Grant Disaster Recovery, or CDBG-DR, program. Included in the total sum is a first of its kind carveout of nearly $16 billion for "mitigation" projects. HUD said the grants announced Tuesday were the largest single amount of disaster recovery aid awarded in the agency's history. 

Over half of the money, about $18.4 billion, is slated to go to Puerto Rico, which was devastated last year by Hurricane Maria.

"These funds are crucial to put forth our vision for the new, more resilient Puerto Rico that we want to construct for our future generations," Puerto Rico Gov. Ricardo Rosselló said in a statement.

The HUD grant funding is one portion of an almost $90 billion disaster relief package Congress and President Trump approved in February. This package also allocated relief funds for Federal Emergency Management Agency and Army Corps of Engineers programs.

Of the $28 billion in HUD grants, lawmakers specified that up to $16 billion be put toward remaining "unmet needs" from major disasters in 2017, including Hurricanes Harvey, Irma and Maria, wildfires in California, and the ensuing mudslides in the state after the blazes.

The legislation also called for at least $12 billion in grants to go toward mitigation activities, intended to prevent future damage, in places hit by presidentially declared disasters between 2015 and 2017.

(HUD determined that unmet needs in places affected by the 2017 natural disasters only totaled about $12 billion, a spokesman for the agency explained on Tuesday, freeing up the roughly $4 billion balance of the $16 billion to be put toward mitigation grants.)

States and territories struck by 2017 disasters that received grants for both unmet needs and mitigation included: California, Florida, Georgia, Missouri, Puerto Rico, Texas and the U.S. Virgin Islands.

After Puerto Rico, Texas was afforded the second largest amount of grants among this group—about $4.7 billion. Parts of southeast Texas, including the Houston region, were swamped by flooding after Hurricane Harvey made landfall in the state last August.

Mitigation grant recipients that had disasters in 2015 and 2016 included: Louisiana, North Carolina, West Virginia, Texas, South Carolina and Florida, as well five localities in South Carolina and Texas.

Housing and Urban Development plans to issue two notices with guidance for how the grants can be used—one for the 2017 unmet need grants, the other for the mitigation grants. HUD's spokesperson could not offer an estimate of when this guidance would be out.

Grant recipients are required to pull together action plans for how they will spend the HUD grants before they can gain final access to the money. This planning process can last for weeks, or months. It involves developing and publishing a plan, getting public comment on the plan, refining it, and proposing it to HUD for review.

In the past, CDBG-DR grant recipients could choose to use the funding for mitigation activities, like buying out property in flood zones, or certain infrastructure improvements. But this is the first time HUD will administer a tranche of grants that is strictly for mitigation efforts.

Carlos Martín, a senior fellow in the Metropolitan Housing and Communities Policy Center at the Urban Institute, said that while CDBG-DR grants could be put toward mitigation activities in the past, much of the money has typically gone to recovery efforts, while mitigation has traditionally fallen more in FEMA's domain.

"State and local folks who deal with FEMA are the emergency people and not the housing and community development people," he noted. 

"I'm always happy to see that more money is going to mitigation," Martín added. "But now, there's sort of this additional nuance: how does that improve overall mitigation strategies for these communities by giving HUD the money and whether HUD is capable of managing it."

Home buyouts, retrofit programs geared toward upgrading properties to better withstand storms, and certain stormwater management projects are examples of activities that Martín predicted state and local governments would look to do with the CDBG-DR mitigation funding.

Sue Naramore, a staff member at the California Department of Housing and Community Development who focuses on disaster recovery and resilience, pointed out that previous CDBG-DR awards have mainly gone toward places affected by storms and flooding.

"This is one of the first forays into wildfire," she said of the grants for California.

Wildfires in the state last year burned over 10,000 structures, and killed at least 43 people.

Naramore said possibilities for how the grant dollars awarded to California might be used include building improvements, such as installing fire resistant siding, and also investing in planning measures for areas like evacuations, or fire hydrant and water systems. But she also stressed that "all disasters are local," and said the "locals would have to weigh in on the things that they felt most challenged with."

"California's intent is to truly build back stronger than before," Naramore said.

Also on Tuesday, Texas Land Commissioner George P. Bush unveiled a state action plan detailing the distribution and eligible uses for roughy $5 billion in previous CDBG-DR funding HUD awarded the state last November, in the wake of Hurricane Harvey.

Parts of the plan involve putting about $1 billion toward rehabbing and reconstructing single-family homes, $413 million toward infrastructure, and around $275 million toward property buyouts and acquisitions. The Texas General Land Office will consider public comments on the plan through April 26.