Disaster Housing Programs - By Ed Gramlich, Senior Advisor
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Disaster Housing Programs
By Ed Gramlich, Senior Advisor and wide relief efforts and provides orderly and
Noah Patton, Policy Analyst, NLIHC systemic federal natural disaster assistance
F
for state and local governments. Congress’
EMA leads the federal government’s efforts to intention was to encourage states and localities
prepare for potential disasters and to manage to develop comprehensive disaster preparedness
the federal response and recovery efforts plans, prepare for better intergovernmental
following any disaster that overwhelms local and coordination in the face of a disaster, encourage
state authorities. FEMA provides immediate, direct the use of insurance coverage, and provide
financial and physical assistance to those affected federal assistance for disaster-related losses.
by disasters and is responsible for coordinating
government-wide relief efforts. President George W. Bush signed the “Post-
Katrina Emergency Reform Act” on October 4,
HISTORY 2006. The act significantly reorganized FEMA and
provided substantial new authority to remedy
Until the 1930s, ad hoc legislation was passed
gaps that became apparent in the response to
in response to hurricanes, earthquakes, floods,
Hurricane Katrina in August 2005, including a
and other natural disasters. When the federal
more robust preparedness mission for FEMA.
approach to disaster-related events became
President Barack Obama signed the “Sandy
popular, the Reconstruction Finance Corporation
Recovery Improvement Act (SRIA) of 2013”
was given authority to make disaster loans
on January 29, 2013. SRIA authorized several
for repair and reconstruction of certain public
significant changes to the way FEMA delivered
facilities following an earthquake, and later,
federal disaster assistance.
other types of disasters. However, a piecemeal
approach to disaster assistance continued. The “Disaster Recovery Reform Act,” (Public
The “Disaster Relief Act of 1974” firmly Law 115-254), amending the “Robert T. Stafford
established the process of presidential disaster Disaster Relief and Emergency Assistance Act,”
declarations. Finally, on April 1, 1979, President was signed into law on October 5, 2018. The act
Jimmy Carter signed Executive Order 12127, further reforms FEMA, increasing the agency’s
merging many of the separate federal disaster- pre-disaster planning process and its overall
related responsibilities into the newly created efficiency after the destructive 2017 hurricane
FEMA. In 2003, FEMA became part of the new and wildfire seasons. Notably, the act changes
Department of Homeland Security (DHS). Long- the factors FEMA considers when advising a
term recovery funding is also managed by HUD, president to issue a federal disaster declaration.
which administers several programs focused on The agency will now consider a disaster-stricken
housing and economic recovery in areas struck state’s ability to pay for its own recovery along
by disasters. with damage reports and assessments.
The “Robert T. Stafford Disaster Relief and
Emergency Assistance Act” (Public Law 100- During the COVID-19 pandemic, FEMA was not
707), amending the “Disaster Relief Act of initially called upon to coordinate the response.
1974,” became law on November 23, 1988. It Instead, the Center for Disease Control (CDC) and
created the system still in place today through the Department of Health and Human Services
which presidential disaster declaration of an (DHHS) were placed in charge of the response.
emergency triggers financial and physical This was done in accordance with pandemic-
assistance through FEMA. The act gives FEMA related policies established in the past decade. As
responsibility for coordinating government- the scope of the pandemic became clear and CDC
NATIONAL LOW INCOME HOUSING COALITION 6–47and DHHS capabilities began to be overwhelmed, policy on incidentals. These costs and
FEMA was tasked with coordinating the federal requirements constitute major barriers to
response. You can find out more about FEMA’s accessing temporary housing under this
actions in the “Role of FEMA in COVID-19 program. Participation in TSA does not
Response” section of this guide. count against a household’s maximum
amount of assistance available under IHP.
FEDERAL PROGRAMS – Rental Assistance. FEMA may provide
FEMA financial assistance to rent temporary
housing. The amount is based on the
Along with other government agencies, FEMA
impacted area’s Fair Market Rent (FMR)
may provide disaster victims with low-interest
and covers rent plus utilities typically for
loans, veterans’ benefits, tax refunds, excise tax
two months, although it may also be used
relief, unemployment benefits, crisis counseling,
as a security deposit equal to one month
and free legal assistance. These resources are
of FMR. Households may seek Continued
available once the president grants a governor’s
Rental Assistance when alternate housing
request for Individual Assistance (IA) programs
is not available.
as part of a major disaster declaration. Disaster
housing and community development programs – Direct Temporary Housing Assistance.
unique to FEMA include: FEMA may provide direct housing
assistance when disaster survivors are
The Individuals and Households Program (IHP). unable to use Rental Assistance due to
The Housing Assistance provision of the IHP a lack of available housing resources.
provides financial and direct assistance for Direct Temporary Housing Assistance is
disaster-caused housing needs not covered not counted toward the IHP maximum
by insurance or provided by any other source. award amount and must be specifically
IHP Assistance lasts for 18 months, although requested by the impacted government.
the impacted state may request an extension Direct Temporary Housing Assistance may
that must be approved by the president. It is include:
important to note that individuals who were
• Manufactured Housing Units provided
experiencing homelessness before a disaster are
by FEMA and made available to use as
not eligible for the majority of IHP programs. Four
temporary housing.
types of housing assistance are available under
IHP: • Multi-Family Lease and Repair, which
allows FEMA to enter into lease
1. Temporary housing assistance, which agreements with owners of multi-
includes: family rental properties and make
– Transitional Shelter Assistance (TSA). repairs to provide temporary housing.
In recent large-scale disasters, FEMA • Permanent or Semi-Permanent
has provided TSA to cover the cost of Housing Construction, which allows
staying in an approved hotel or motel for home repair and/or construction
an initial period of up to 14 days (which services to be provided in insular
may be extended in 14-day intervals for areas outside the continental U.S. and
up to six months). TSA does not cover other locations where no alternative
additional fees, such as resort fees, that housing resources are available, and
hotels may include in the cost of a room. where other types of FEMA Housing
Some participants in the program have Assistance are unavailable, infeasible,
been required to present credit cards or not cost effective.
before being provided access to rooms 2. Home repair cash grants, available to
in accordance with an individual hotel’s homeowners for damage not covered by
6–48 2021 ADVOCATES’ GUIDEinsurance. These grants are intended to requiring the state and subgrantees (for example,
repair homes to safe, sanitary, or functional counties) to provide the remaining 25%. FEMA
conditions but are not intended to return the has the authority to temporarily modify this cost
home to its pre-disaster condition. share ratio under certain circumstances.
3. Home replacement cash grants, available Hazard Mitigation Grant Program (HMGP):
to homeowners to help replace a destroyed To reduce the risk of damage and reliance on
home that is not covered by insurance. federal recovery funds in future disasters, FEMA
administers the HMGP. HMGP provides state
Other Needs Assistance (ONA): In addition
and local governments funds for long-term
to housing assistance, the IHP includes ONA,
mitigation following a federally declared disaster.
which provides financial assistance for disaster-
Nonprofits, individuals, and businesses may
related necessary expenses. There are two
apply through their local government. Uses of
categories of ONA: those that do not require a
HMGP include acquiring an individual property
household to have been denied a Small Business
in a flood-prone zone and permanently removing
Administration (SBA) loan, and those that do
the property, raising a home so that flood water
require such a denial. “Non-SBA dependent”
flows underneath, erecting barriers to prevent
types of ONA that may be awarded regardless
flood water from entering a home, flood diversion
of a household’s SBA status include covering
and storage, and aquifer storage and recovery.
medical, dental, childcare, and funeral expenses.
FEMA provides up to 75% of the funds for
Also included in this category is Critical Needs
mitigation projects.
Assistance, which provides up to $500 to
meet lifesaving or life-sustaining needs such National Flood Insurance Program
as water, food, first aid, prescriptions, infant
The National Flood Insurance Program (NFIP)
formula, diapers, consumable medical supplies
was created in 1968 to make flood insurance
and durable medical equipment, and fuel for
available to homeowners for the first time. The
transportation. Assistance that depends on a
“Flood Disaster Protection Act of 1973” made
household being denied an SBA loan or receiving
the purchase of flood insurance mandatory for
a partial SBA loan that is not adequate to meet
properties in Special Flood Hazard Areas (SFHAs)
needs include funds to repair or replace damaged
if the property had a mortgage from a federally
personal property, repair or replace vehicles, and
regulated or insured lender. To participate in
cover moving and storage costs.
NFIP, a community must adopt and enforce
Public Assistance (PA): FEMA provides disaster floodplain management ordinances. The NFIP
assistance to state, territorial, tribal, and local has an arrangement with private insurance firms
governments as well as certain private nonprofits to sell and service flood insurance.
through the PA program. Under the Permanent
HUD
Work component of Public Assistance, FEMA
provides grants to state and local governments Community Development Block Grant Disaster
to repair roads, bridges, water control facilities, Recovery (CDBG-DR): CDBG-DR funding is
public utilities, public buildings, and parks and provided for presidentially declared major
recreational facilities (Categories C through G). disasters by appropriations acts and is generally
In addition, PA can be provided to nonprofits to tailored to specific disasters. To determine how
restore damaged facilities, which could include much a state or local government receives, HUD
repair funds for public housing agencies. The uses a formula that considers damage estimates
Emergency Work component of PA aids in the and disaster recovery needs unmet by other
removal of debris and carries out emergency federal disaster assistance programs such as
protective measures – which can include FEMA and SBA. In addition to any requirements
emergency mass sheltering (Categories A and B). cited in the specific appropriation act, the regular
FEMA generally provides 75% of the cost of PA, CDBG regulations at 24 CFR 570 apply to CDBG-
NATIONAL LOW INCOME HOUSING COALITION 6–49DR funds. However, CDBG-DR appropriations the grantee’s program will promote housing for
generally grant HUD broad authority to issue vulnerable populations, including a description
waivers and alternative requirements identified of activities to address the housing needs of
in a Federal Register notice issued by HUD homeless people and to prevent extremely low-
following the announcement of the appropriation. income households from becoming homeless.
CDBG-DR grantees, usually states, must prepare Grantees must submit Quarterly Performance
an Action Plan to assess housing, infrastructure, Reports (QPRs) using HUD’s electronic
and economic revitalization needs and then Disaster Recovery Grant Reporting System
identify activities to address unmet needs. showing each activity’s progress, expenditures,
Public participation in devising the Action Plan accomplishments, and beneficiary characteristics
is required. In the regular CDBG program, a such as race, ethnicity, and gender.
minimum 30-day public review and comment
CDBG Mitigation (CDBG-MIT): As part of a
period is required. However, in recent CDBG-
new focus on pre-disaster mitigation and
DR Federal Register notices, HUD has reduced
preparedness after the destructive 2017 and
the public participation period to a mere 14
2018 hurricane seasons, Congress has begun
days. Advocates stress that more time for public
to appropriate funds under a HUD CDBG-MIT
engagement is necessary, especially since the
program. Like CDBG-DR, CDBG-MIT funding
consequences of the final plan will have long-
is provided for areas that suffered from a
term impacts on low-income households.
presidentially declared disaster and is distributed
The regular CDBG program requires that at similarly to CDBG-DR. Program funding is
least 70% of the funds be used for activities that available for mitigation and resiliency projects,
benefit low- and moderate-income households defined as activities that reduce the risk to
or those with income at or less than 80% of the life and property by lessening the impact of a
area median income. The CDBG-DR Federal future disaster. These projects are not required
Register notices regarding funds for the 2017 to address an existing disaster impact, but
disasters maintained the 70% low/mod-income rather, areas that are likely to be impacted in the
benefit requirement; however, most of the major future. Like the CDBG-DR program, the regular
notices between Hurricane Katrina in 2005 and CDBG regulations at 24 CFR 70 apply to CDBG-
2016 allowed waivers so that only 50% of the MIT funding subject to waivers and alternative
CDBG-DR had to meet the low/mod benefit test. requirements released by HUD in the program’s
In 2020 FEMA and HUD signed a Memorandum enacting Federal Register Notice.
of Understanding that streamlined the use of
The process for CDBG-MIT grantees is also
CDBG-DR funds to pay for portions of FEMA PA
essentially the same as the CDBG-DR program,
projects. Under this new streamlining agreement,
with the grantee developing an action plan
only the portion of the project funded directly
that outlines the planned use of the funds. The
by HUD CDBG-DR is required to meet CDBG
plans are subject to public comment and HUD
requirements, such as targeting low income
approval. The program requires a 30-day public
households. Previously, the use of CDBG-DR
participation window and specifies a minimum
funding on FEMA PA projects would extend such
number of public meetings to be held that
requirements to the entire project.
correspond to the amount of funding allocated
Recent Federal Register notices have required that to that state. As this program is relatively new,
at least 80% of the total funds provided to a state program guidelines and policies can be expected
address unmet needs within an area designated to change as the program develops.
by HUD as being the most impacted and
Disaster Housing Assistance Program (DHAP):
distressed. They have also required the Action
The aftermath of Hurricane Katrina in 2005
Plan to propose allocating CDBG-DR to primarily
demonstrated that HUD, not FEMA, was best
address unmet housing needs and describe how
6–50 2021 ADVOCATES’ GUIDEsuited to oversee and administer federal disaster fees, ask for security deposits, and require that
housing assistance to the lowest-income people. displaced households have credit cards, all of
Congress amended the “Stafford Act” to require which are barriers for low-income households.
the federal government to create a disaster Because disasters generally reduce the amount
housing plan. In 2009, that plan made it clear of available housing stock, low-income renters
that HUD should play a key role in creating and are often unable to use FEMA Rental Assistance
operating disaster housing assistance programs in their communities. If a displaced household
and recommended that Congress make the DHAP relocates, the Rental Assistance amount, which
permanent. The 2011 National Disaster Recovery is based on the Fair Market Rent (FMR) of the
Framework also recommended that HUD, not impacted area, may not be enough to cover the
FEMA, serve as the coordinating agency for cost of an apartment in a different community.
delivering housing assistance. However, before
Federal Housing Administration (FHA): The FHA
HUD can put a DHAP program in place, FEMA
grants a 90-day moratorium on foreclosures
must enter an interagency agreement with HUD.
and forbearance on foreclosures of FHA-insured
In the wake of recent major disasters, FEMA has
home mortgages. HUD’s Section 203(h) program
resisted working with HUD to stand up DHAP
provides FHA insurance to disaster victims who
programs.
have lost their homes and need to rebuild or buy
DHAP has been used after past disasters, another home. Borrowers from participating
including Hurricanes Katrina, Rita, Gustav, Ike, FHA-approved lenders may be eligible for 100%
and Sandy, to provide low-income, displaced financing. HUD’s Section 203(k) loan program
families with safe, decent, and affordable rental enables those who have lost their homes to
homes while they rebuild their lives and get back finance the purchase of or refinance a house
on their feet. DHAP is administered through along with repairs through a single mortgage.
HUD’s existing network of local public housing It also allows homeowners who have damaged
agencies, which have significant local market houses to finance the rehabilitation of their
knowledge and experience administering HUD’s existing single-family home.
Housing Choice Voucher program.
U.S. Small Business Administration
DHAP provides displaced households with
After households apply to FEMA, they might
temporary rental assistance, covering the cost
be contacted by SBA to apply for a low-interest
difference between what a family can afford
loan. If eligible, the household does not have
to pay and their rent, capped at a reasonable
to accept the loan. If a household is not eligible
amount. Over the course of several months,
for an SBA loan, they will be referred to FEMA
families are required to pay a greater share of
to be considered for a FEMA ONA grant. To be
their rent to encourage and help them assume
considered for an ONA grant, a household must
full responsibility for housing costs at the end
have submitted an SBA loan application.
of the program. All families receiving DHAP
rental assistance are provided wrap-around SBA can provide physical disaster loans to cover
case management services to help them find uninsured or uncompensated losses of a home or
permanent housing, secure employment, and personal property. A homeowner can apply for a
connect with public benefits. loan to repair or rebuild a primary residence to
its pre-disaster condition based on the verified
DHAP helps fill the gaps that low-income
losses and homeowners may apply for up to
households experience with FEMA’s Transitional
$200,000 to repair or replace their home to its
Shelter Assistance (TSA) and Rental Assistance
pre-disaster condition. The loan amount can
programs. Many hotels do not participate in
increase by as much as 20% to help homeowners
TSA, and those that do often charge daily resort
rebuild in a manner that protects against damage
NATIONAL LOW INCOME HOUSING COALITION 6–51from future disasters of the same kind, up to Revenue Procedure 2014-49 (Rev. Proc. 2014-
the $200,000 maximum. Both homeowners and 49) from 2014 provides guidance to owners and
renters may apply for loans—up to $40,000— state housing finance agencies (HFAs) regarding
to replace personal property (anything not temporary relief from certain requirements that
considered real estate or part of the structure apply to the LIHTC program. A key provision
of the home) lost in a disaster. The interest rate allows an owner to provide up to twelve months
on SBA physical disaster loans depends on the of emergency housing to households that have
applicant’s ability to secure credit from another been displaced by a presidentially declared major
source. In 2017, applicants unable to obtain disaster. Households are eligible for emergency
credit elsewhere were charged 1.75% interest; housing in an LIHTC unit if their home is in an
for those who could obtain credit elsewhere, the area eligible for FEMA individual assistance.
interest rate was 3.5%. The term of loans is often
Unless a property’s written policies and
30 years.
procedures provide a preference for households
Businesses, including rental property owners displaced by a presidentially declared disaster, an
and nonprofit organizations, can apply for loans owner may not skip over households on a waiting
for real estate and personal property loss up to a list to provide emergency housing. Existing
maximum of $2 million. In addition, businesses households cannot be displaced in order to
and nonprofits can apply for economic injury provide emergency housing.
loans of up to $2 million to cover working capital
Rev. Proc. 2014-49 relieves an owner and
to meet their ordinary financial obligations.
household of providing evidence of income
U.S. Department of Agriculture eligibility. All other LIHTC rules apply, however,
including LIHTC rent limits. The emergency
The U.S. Department of Agriculture (USDA)
relief period ends one year after the date the
provides loans, grants, and loan servicing options
disaster was declared. After that date, displaced
to its loan borrowers and their tenants or grant
households that are not income-eligible under
recipients. It also will adjust Supplemental
the LIHTC program cannot occupy a unit assisted
Nutrition Assistance Program (SNAP) limits to
under the LIHTC program. To provide emergency
provide greater access to food in disaster-effected
housing, an owner must request written approval
areas.
from the HFA.
U.S. Department of the Treasury
Additional issues can arise when LIHTC units
Congress authorized the Department of the are damaged by disasters. Owners of LIHTC
Treasury to provide special Low-Income units knocked out of service by a presidentially
Housing Tax Credits (LIHTCs) and other tax declared disaster have a “reasonable period”
incentives after recent major disasters without a (defined as 25 months by the IRS) to finish
permanent disaster recovery program in place. rebuilding in order to retain their tax-credit status
In the case of hurricanes Katrina and Rita, the and avoid IRS tax credit recapture. Depending on
Treasury established Gulf Opportunity (GO) the level of devastation caused by the disaster,
Zone tax credits, GO Zone tax-exempt bonds, some owners struggle to meet this deadline.
and additional New Markets Tax Credits to Housing providers are able to petition the IRS for
help rebuild housing. After Superstorm Sandy an extension to the 25-month deadline if needed
in 2011, Congress also authorized additional although such extensions are considered rare.
LIHTCs, private activity bonds, and New Markets This issue was notably seen in California after
Tax Credits. The same occurred after the 2018 the 2018 wildfire season and in the aftermath
California wildfire season, with Congress of Hurricane Harvey in Houston. Advocates and
approving additional LIHTC funding to replaced housing providers should remain aware of this
destroyed housing stock. deadline and work proactively to avoid a lapse in
tax-credit status and possible recapture.
6–52 2021 ADVOCATES’ GUIDEFORECAST FOR 2021 perjury.
The ongoing recovery from 2017 and 2018 Several other Members of Congress introduced
disasters, as well as the record-breaking 2020 bills directing FEMA to standardize damage
Atlantic Hurricane Season and West Coast assessments, streamline emergency notification
Wildfire season pushed Congress to introduce services, and boost pre-disaster planning efforts.
several bills that encourage quick and equitable Congress will work in the coming year to enact
recovery. In 2019, Representatives Ann Wagner bills to assist those struck by disasters in 2020,
(R-MO) and Al Green (D-TX) introduced the including Hurricane Laura, Sally, Delta, Zeta,
“Reforming Disaster Recovery Act,” which the West Coast Wildfires, the Iowa Derecho, and
permanently authorizes the CDBG-DR program. additional disasters as they occur. Any disaster
The bill also creates important safeguards and relief bill should include resources to ensure that
tools to ensure that federal disaster recovery and all survivors, including people with the lowest
rebuilding efforts reach all impacted households, incomes, are served.
including those with the lowest incomes that In addition to potential legislative changes,
are often hardest hit by disasters but have the advocates should remain aware of administrative
fewest resources. NLIHC strongly supports this and programmatic releases from federal
bill. The bill passed out of the House Financial agencies surrounding disaster recovery. One
Services Committee by unanimous vote and was change announced by FEMA in late 2020 would
later passed by a bipartisan vote of the House of modify the formula used by FEMA to decide
Representatives. Companion legislation in the if major disaster declarations are warranted.
Senate was introduced by Senators Brian Schatz Under the new proposed rule, FEMA will add
(D-HI) and Todd Young (R-IN). greater weight to the ability of states to respond
In addition, the “Housing Survivors of to disasters themselves, making it less likely
Major Disasters Act” introduced in 2019 by that rural areas of relatively prosperous states
Congressman Adriano Espaillat (D-NJ) and such as Northern California and the Rio Grande
Senator Elizabeth Warren (D-MA) passed Valley of Texas would receive the entire range of
unanimously out of the House Transportation federal assistance they need in order to recover
and Infrastructure Committee and then the after a disaster. Advocates should monitor FEMA
entire House of Representatives in 2020. The and other federal agency releases on this and
bill addresses the requirement that applicants additional disaster recovery topics.
for FEMA disaster assistance provide title HUD has released guidance and allocations
documentation to show ownership over disaster for almost all 2017, 2018, and 2019 CDBG-
damaged property. This requirement constitutes DR grantees in the Federal Register. Funds are
a major barrier to aid for low income households. currently being spent at different rates across
People living in manufactured housing such as 2017-2019 disaster regions with states pursuing
mobile homes and people with “heirs property” the completion of their state CDBG-DR/CDBG-
ownership over their home often lack access MIT action plans. The reasons for the slow
to clear title. These households are forced disbursement range from issues with community
into lengthy and expensive legal title clearing input for the program, high administrative
procedures before they can be found eligible for burdens and the COVID-19 pandemic. As the
FEMA assistance. The bill would require FEMA process continues, advocates should be prepared
to expand the list of documents eligible to prove to ensure that all guidelines and policies,
ownership for the purposes of receiving recovery including federal civil rights law, are being
assistance and also require the agency to develop followed as long-term recovery dollars begin to
a “declarative form” allowing owners who are reach disaster areas.
unable to procure ownership documents to attest
2020 disasters have not received an allocation
to ownership of their home under penalty of
NATIONAL LOW INCOME HOUSING COALITION 6–53of CDBG-DR as of this writing. Advocates should continue to push for CDBG-DR allocations to these areas especially as FEMA programs assisting in short-term disaster recovery begin to expire. FOR MORE INFORMATION National Low-Income Housing Coalition, 202- 662-1530, www.nlihc.org. The Disaster Housing Recovery Coalition’s webpage, http://nlihc.org/issues/disaster, including its recommendations: • To Congress • To HUD • To FEMA NLIHC’s Report, “Reforming America’s Broken Disaster Housing Recovery System, Part One: Barriers to a Complete and Equitable Recovery”, https://bit.ly/2RZHmuK & “Part Two: Policy Framework Reform Recommendations”, https:// bit.ly/3n5lnzq. NLIHC’s Top Priorities for Any Disaster Recovery Package, https://bit.ly/2K8Mp6b. NLIHC’s Disaster Recovery Resources webpage: https://nlihc.org/issues/disaster/resources. NLIHC’s Disaster Housing Assistance Program fact sheet: https://bit.ly/2QZ2WvP. NLIHC’s Disaster Housing Recovery Coalition’s Administrative Transition Recommendations, https://bit.ly/3gD7GFf. 6–54 2021 ADVOCATES’ GUIDE
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