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HUD: DISASTER RECOVERY INITIATIVE

Introduction

Under President Bill Clinton and Secretary Andrew Cuomo, the U.S. Department of Housing and Urban Development (HUD) is making a historic transformation, building on changes initiated 4 years ago and still in process. HUD is moving to empower its State and local partners by supporting and fostering community-based planning to address the needs of large and small towns all across America.

While allowing more flexibility at the State and local level, HUD is working to protect the public trust through zero tolerance for fraud and abuse. By embracing these principles, the new HUD Disaster Recovery Initiative provides maximum flexibility to communities to quickly meet the challenges created by natural disasters. These funds will supplement, rather than replace, Federal Emergency Management Agency (FEMA) and other Federal agency funds.

Summary

Even before emergency crews have left the scene, before the emergency shelters have closed, communities hit by a natural disaster begin to face the next great trial—rebuilding their homes, their businesses, and their lives. This challenge can seem insurmountable at first, particularly for low- and moderate-income families and communities that were struggling to get by even before disaster struck. The process of recovery is often long, difficult, and incomplete—some losses simply can never be replaced.

While many impacted areas never make it all the way back, the recovery experience can help communities emerge stronger than before, with a firmer foundation for growth and opportunity. But it takes determination to rebuild a community and resources to make it happen.

Only the community itself can provide the determination. But HUD and other Federal agencies can help ensure that the resources to do the work are available.

HUD's new Disaster Recovery Initiative is a crucial element in the array of Federal programs that aid communities impacted by Presidentially declared disasters in getting back on their feet. While FEMA focuses much of its resources on the initial response to disasters and on measures to mitigate the harm caused by future disasters, HUD is a principal player—with FEMA and the Small Business Administration (SBA)—in the actual recovery effort. Federal funds will never be sufficient to address all of a community's recovery expenses, but HUD's Disaster Recovery Initiative offers a uniquely flexible tool that States and local governments covered by a Presidential declaration can use to provide gap funding for recovery activities that other agencies cannot support. HUD funds are intended to fill the gaps remaining after other Federal agency funds have been maximized.

Whether it means buying and clearing buildings from frequently inundated flood plains, relocating families from earthquake-damaged homes, or helping rebuild homes and businesses ravaged by a tornado, HUD funds the activities that the community decides are most important to its recovery. In this way, the HUD Disaster Recovery Initiative empowers communities for recovery, providing them with the tools to rebuild—and the flexibility to determine for themselves how best to use these tools.

Funding

• $500 million has been appropriated for the HUD Disaster Recovery Initiative under Title II, Chapter 10 of the 1997 Emergency Supplemental Appropriations Act for Recovery from Natural Disasters (Public Law 105-18).

Allocation of Funds

• HUD will allocate funds directly to certain grantees which reflect existing disaster recovery needs and needs that are not met by other Federal programs.

Grantees

• A direct grantee is a unit of local government which incurred a substantial amount of disaster damage and has remaining recovery needs.
• A State grantee is a State which can receive an allocation to distribute assistance to those areas that have an existing need, including those areas with a dollar threshold below that for direct grantees.

Submission Requirements

• Planning requirements are quite simple. Each State and local grantee will submit to HUD, for approval, a disaster recovery plan which describes: the recovery needs resulting from the covered disaster; the grantee's overall plan for recovery; expected Federal, non-Federal public, and private resources, and their relationship, if any, to activities to be funded with HUD Disaster Recovery Initiative funds; and the proposed uses for HUD Disaster Recovery Initiative funds. The plan must include monitoring standards and procedures with appropriate certifications.
• To assist in planning, HUD will make Community 2020 Software available to every jurisdiction. This new soft-ware will permit States and localities to display pro-posed and completed projects on maps showing how the community or State uses HUD funds, as well as other public and private funds, to pave the road to recovery.

Eligible Activities

Disaster Recovery Initiative funds may be used for activities which are authorized by 42 U.S.C. 5305 and are relevant to disaster recovery. Grantees must use funds appropriated under Title II, Chapter 10 of the 1997 Emergency Supplemental Appropriations Act for Recovery from Natural Disasters (Public Law 105–18) for buyouts, relocation, long-term recovery, and mitigation related to a covered disaster. A wide range of activities may be funded under the initiative with an emphasis on benefiting low- and moderate-income persons, including:

• Acquisition of real property, including the buyout of properties in a flood plain and the acquisition of relocation property;
• Relocation payments and assistance for displaced persons, businesses, organizations, and farm operations;
• Repair, rehabilitation, or reconstruction of residential and nonresidential structures;
• Acquisition, construction, reconstruction, or installation of public facilities and improvements, such as water and sewer facilities, streets, neighborhood centers, and the conversion of school buildings for eligible purposes;
• Code enforcement in deteriorated or deteriorating areas (e.g., disaster areas);
• Assistance to facilitate homeownership among low-and moderate-income persons (e.g., downpayment assistance, interest rate subsidies, loan guarantees);
• Public services, within certain limits;
• Activities relating to energy conservation and renewable energy resources incorporated into recovery;
• Assistance to for-profit businesses to carry out economic development or recovery activities that benefit the public through job creation or retention;
• Construction of new replacement housing by units of general local government; and
• Planning and administration costs, up to 20 percent of the grant.

Streamlining

HUD's new Disaster Recovery Initiative is not business as usual. It allows grantees sufficient flexibility to meet the requirements for disaster recovery without many of the rules that are applicable to the Community Development Block Grant program. Activities which are waived should be consistent with the purpose of the statute. Among the requirements which may not be waived are those related to civil rights, fair housing and nondiscrimination, the environment, and labor standards.

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