Introduction: A Long-Awaited Reform
Congress is about to pass the biggest disaster reform in years. Last month, Congress passed a bipartisan housing bill with an endorsement from President Donald Trump. The president has said he will veto it because Congress has not passed other measures, but it will become law at the end of today if he does not veto it. Congress has enough votes to override a potential veto anyway.
The Broken System of Disaster Recovery
How HUD’s Disaster Program Failed Communities
There are many ways for disaster victims to get help immediately after a flood or fire: FEMA gives temporary housing assistance and pays for debris removal, insurance companies pay to rebuild homes, and charities pass out food and water. But long-term recovery is much harder. The United States has only one federal program to help: the Community Development Block Grant Disaster Recovery (CDBG-DR) program, run by HUD. It has provided billions of dollars to disaster areas over the last few decades, but almost everyone agrees it is broken. The program operates on an ad hoc basis without permanent congressional approval, so most grants take more than half a decade to execute and arrive too late to make a difference.
New Bern and Other Case Studies
In New Bern, North Carolina, hundreds of affordable apartments were lost after Hurricane Florence in 2018. An investigation found it took more than five years to build a few dozen apartments with HUD money. By the time the new complexes opened, tenants had moved on to other cities. Other cases show even longer timelines: some grantees from the 2017 California wildfires or 2012’s Hurricane Sandy are still trying to access funds. In a report, HUD said it was targeting for closeout a grant meant to help Arkansas recover from tornadoes in 2008. A 2024 report by HUD’s internal auditor blamed these delays on the program’s ad hoc authorization and failed coordination between HUD and other agencies.
What the New Housing Bill Does
Permanent Authorization and Accelerated Timelines
The new housing bill’s primary focus is on building more homes in areas suffering from housing shortages, but it also contains a little-noticed provision that turns HUD’s sporadic disaster aid into a permanent program. The change could prevent stagnation often seen when displaced families struggle to find housing and businesses shut down. The language frees HUD to spend money without waiting for congressional approval, creates a permanent disaster unit within the department (similar to how FEMA operates), and accelerates the timeline so HUD can start spending as soon as FEMA’s aid winds down. FEMA assistance goes for 18 months maximum, while HUD assistance often wouldn’t kick in for two or three years after. This creates a “valley of death” that the new reform reduces to “more like a crack,” according to Carlos Martín of Resources for the Future. The change could speed up construction of new affordable apartment buildings, rental assistance, or even fast-track financial support for new businesses and job training programs.
Bipartisan Agreement and Sunset Clause
The new authorization is not technically permanent; to appease Republicans, lawmakers added a sunset provision that will wind down the aid program after three years. However, a “sense of Congress” clause suggests the program could continue indefinitely as long as money is available. Carlos Martín said it’s unlikely lawmakers will wind it down after creating a new unit to manage it, calling it a truly bipartisan agreement. Stan Gimont, former HUD official who oversaw the program under Obama and the first Trump administration, said, “All the tumblers are there to make it work now. They all line up, and it should all go a lot more quickly.”