HUD approves $28B of disaster and mitigation funding

Dive Brief:

The U.S. Department of Housing and Urban Development (HUD) has awarded $28 billion to U.S. states, counties and territories that have suffered losses from natural disasters from 2015 to 2017, according to an agency statement. More than $12 billion will fund unfinished recovery efforts and almost $16 billion will be directed toward preventing future damage from natural disasters.
Puerto Rico won the lion's share of the HUD pot – almost $18.5 billion to be used for both mitigation ($8.3 billion) and repairs ($10.2 billion). The state of Texas, still recovering from Hurricane Harvey, was the second-biggest winner with a total award of more than $5 billion, which includes money for hard-hit Houston. A little more than $652,000 will go toward repair efforts in Texas, leaving the rest for mitigation.
The money will flow through HUD's Community Development Block Grant — Disaster Recovery (CDBG-DR) Program, and the agency said administrative spending guidelines are forthcoming. This is the first time HUD has issued funds for mitigation efforts, according to Engineering News-Record, and the money is expected to go toward the cost of activities like home buyouts, raising homes above floodplain levels and shoring up utility systems. Puerto Rico will spend $2 billion of its allocation on creating a more resilient electric grid.

Dive Insight:

In 2017, the U.S. was hit by a string of natural disasters, which included the rain-fueled spillway failure at the Oroville Dam in Oroville, California, three major hurricanes – Harvey, Irma and Maria – and California wildfires that stretched into the beginning of 2018. In January, global reinsurer Munich RE projected that global natural disaster losses due would total $330 billion, $135 billion of that figure insured. The company estimated that the damage from hurricanes Harvey, Irma and Maria would add up to $215 billion.

The block grant spend in mitigation and resiliency was part of the Bipartisan Budget Act of 2018, an indication that federal lawmakers are open to exploring more ways to lessen damage from natural disasters rather than just throwing money at the aftermath. And, according to a National Institute of Building Sciences (NIBS) study, the results of which were released earlier this year, the smart money is on resiliency.

NIBS found that an average of six dollars could be saved for every federal grant dollar spent on disaster resiliency and mitigation. NIBS also determined that for every dollar spent on building to a standard higher than building codes require, the payoff could be a savings of four dollars.

This is most likely one of the benefits city officials in Houston had in mind when it recently passed an ordinance that requires all structures in 100-year and 500-year floodplains be built two feet above the 500-year floodplain starting Sept. 1. Approximately 33% of the buildings that flooded during Harvey were in the 500-year floodplain.