HUD sat on this disaster report. Here’s why it matters

By Thomas Frank | 02/12/2021 06:55 AM EST

Hurricane Michael damaged homes across the Florida Panhandle in 2018. The Trump administration withheld for nearly two years a report that described shortcomings in a multibillion-dollar disaster aid program and finally published the report the day before President Trump left office.

Hurricane Michael damaged homes across the Florida Panhandle in 2018. The Trump administration withheld for nearly two years a report that described shortcomings in a multibillion-dollar disaster aid program and finally published the report the day before President Trump left office. @GARedCross/Twitter

The Trump administration withheld for nearly two years a report that describes problems with — and possible fixes to — a federal disaster program that has faced huge delays getting billions of dollars of emergency aid to damaged communities and homeowners.

The report by a Department of Housing and Urban Development contractor was finished in April 2019 but wasn’t released until Jan. 19 — the day before President Trump left office.

By withholding the report, the Trump administration may have undermined Congress’ efforts to improve HUD’s disaster aid program, which has been assailed for taking years to get money to places such as Louisiana after Hurricane Katrina and Puerto Rico after Hurricane Maria.

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A bill that passed the House in 2019 with bipartisan support would have implemented the report’s main recommendation for making HUD more efficient at distributing money to disaster-ravaged communities for rebuilding housing and other projects.

But the bill died in the Senate, and the report’s author said releasing his study earlier could have built support for the measure.

"It would corroborate the importance of the legislation," Carlos Martin, a senior fellow at the Urban Institute, said in an interview.

The report "would give fodder to the sponsors of the bill to say, ‘Here we have a study that says this program is not fully effective unless it’s statutory,’" Martin added.

Rep. Ann Wagner (R-Mo.), who co-sponsored the House bill with Rep. Al Green (D-Texas), told E&E News that she would ask President Biden’s nominee for HUD secretary, Rep. Marcia Fudge (D-Ohio), "to determine what kept this report’s release delayed for two years."

HUD said in a statement that its "internal clearance process involves making all interested parties in a report aware of its findings. That impacts the amount of time between report completion and publication."

Martin said the delay in releasing his report was not "nefarious" but likely occurred because the administration could not decide whether to embrace the recommendations. Federal agencies typically add a statement to contractors’ reports to explain the administration’s view and make policy suggestions.

"HUD sat on it, waiting for an official administration position on the legislation and on the findings of the report," Martin said. "They ended up having no decision and just releasing it in the dark of night."

HUD posted the report without comment on the website of its Office of Policy Development and Research. HUD typically releases reports the same month they are finished but occasionally waits several months for publication.

The Trump administration’s failure to take a position on the report and on improving the HUD program reflects the "constant punting of the issue about how to reform disaster management in this country," Martin said. "In some ways, it’s been bipartisan punting."

When HUD did not publish his report, Martin said, he "was calling up HUD all the time saying, ‘When are you going to release this?’ They said, ‘Give us time.’ That’s all I got."

"There’s nothing controversial about the report. It makes HUD look good," Martin added, noting that the report found HUD had been distributing disaster funds more quickly in recent years.

But because the report is nearly 2 years old and covers HUD disaster spending only through 2015, "it’s a very dated report," Martin said.

Starting his research in 2016 and ending in 2018, Martin did not analyze HUD’s handling of $41 billion in disaster aid that Congress approved after Hurricanes Harvey, Irma and Maria caused massive destruction in 2017. HUD faced wide criticism over its handling of the aid, particularly with Puerto Rico.

The 117-page report analyzes HUD’s main disaster aid program, Community Development Block Grant Disaster Recovery. The 28-year-old program has played a major role in rebuilding communities after some of the nation’s worst disasters.

But the program, known as CDBG-DR, differs from most federal disaster programs because it has no permanent funding source or spending authority. Instead, CDBG-DR gets and distributes money only when Congress makes a special appropriation.

The money pays mostly to rebuild housing after disasters and is used to repair public facilities, provide social services, conduct planning and stimulate economic development.

The absence of permanent funding and spending authority for the program has led to huge delays in releasing money that Congress appropriates. With no law governing the program, HUD is forced to write new rules for the allocation of grants every time Congress approves funds.

The rulemaking process can take years to complete and forces states and communities to spend time understanding the new procedures for seeking money.

The sporadic nature of CDBG-DR aid also leaves communities uncertain about whether they will be getting HUD funds after an event such as a hurricane, wildfire or major flood.

Making the HUD program a regular part of federal disaster response would "increase certainty" for damaged communities and avoid forcing them to "rely on interminable notices with varying requirements," the HUD report said.

"Some challenges to housing recovery can only be overcome by changing the CDBG-DR statutory framework," the report said.

HUD’s inspector general urged the department in 2018 to give the CDBG-DR statutory authority, noting that $12 billion in aid had not been spent from appropriations that were up to 16 years old.

When HUD declined to act, lawmakers wrote legislation creating the statutory framework to simplify and expedite the CDBG-DR.

The House approved the "Reforming Disaster Recovery Act of 2019" in November 2019 on a 290-118 vote, with support coming from all 219 Democrats who voted and 71 Republicans.

But companion legislation in the Senate, sponsored by Sens. Todd Young (R-Ind.) and Brian Schatz (D-Hawaii), died in the Senate Banking, Housing and Urban Affairs Committee.

Wagner, the House bill sponsor, said she would "continue to support" efforts to give statutory authority to the HUD program and would work with Green "to advance this issue and ensure our legislation becomes law."

Martin, the report author, said Congress is likely to try again to enact statutory authority. Noting that the proposal has bipartisan support, Martin said, "It’s kind of an easy call."

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