House Financial Services Subcommittee Holds Hearing on Local Needs and CDBG-DR in Disaster Recovery

By Amin Sobhani, NLIHC DHR Intern 

The U.S. House Financial Services Subcommittee on Housing and Insurance held a hearing, “Examining Local Needs in Disaster Recovery,” on June 10, 2026. The hearing examined the Department of Housing and Urban Development’s (HUD) Community Development Block Grant-Disaster Recovery (CDBG-DR) program with a focus on streamlining recovery processes and better supporting disaster-impacted communities.  

CDBG-DR is the only source of federal funds for providing states, Tribes, and communities with flexible, long-term recovery resources needed to rebuild affordable housing and infrastructure after a disaster. NLIHC and its Disaster Housing Recovery Coalition (DHRC) of over 900 local, state, and national organizations support the “Reforming Disaster Recovery Act” (RDRA) that would permanently authorize the program, reducing barriers to assistance and providing important safeguards and tools to help ensure that assistance reaches all impacted households—including the lowest-income survivors often hardest-hit by disasters.  

NLIHC submitted written testimony that was included in the hearing record—arguing that the RDRA was essential to meeting the long-term recovery needs of disaster survivors and agreeing with hearing witnesses that HUD should remain the lead agency for long-term recovery, and that the permanent authorization of the program is necessary. 

During opening remarks, Subcommittee Chair Mike Flood cited the slow rate of CDBG-DR allocation spending and argued that it reflected broader challenges with the current ad hoc structure, including delays in allocating funds, difficulties grantees face in spending funds effectively, and oversight concerns. He expressed skepticism regarding the permanent authorization of the program and, along with House Financial Services Chairman French Hill, floated the idea of moving the program outside the realm of CDBG and potentially HUD altogether.  

Witnesses described several structural and administrative challenges within the current CDBG-DR framework. Joseph V. Jaroscak, an Analyst in Economic Development Policy at the Congressional Research Service, explained that CDBG-DR is not a standard federal program with its own standing authorization or regulations, citing support by multiple stakeholders for the idea of permanent authorization. J. Patrick Cave, senior vice president of policy at Enterprise Community Partners, emphasized the importance of resilient housing before and after disasters. He highlighted the need to build and retrofit housing, strengthen local capacity, streamline recovery programs, and improve the delivery of tools such as the Low-Income Housing Tax Credit and New Markets Tax Credit, and supported permanent authorization of CDBG-DR. 

State-level administrators also discussed the operational challenges of navigating fragmented requirements. Heather Lagrone, senior deputy director at the Texas General Land Office, noted her support for permanent authorization of the program but argued that HUD’s current allocation methodology, which relies heavily on total dollar losses, can skew funding toward larger urban jurisdictions and disadvantage rural communities with limited capacity to absorb recovery costs. Stephanie McGarrah, Deputy Secretary for the North Carolina Department of Commerce, shared her state’s experience managing recovery from Hurricane Helene. She testified that the intermittent nature of CDBG-DR allocations leads to a lack of programmatic continuity. McGarrah urged Congress to permanently authorize the program so HUD can issue allocation notices more quickly. She also recommended making data-sharing agreements between federal agencies automatic for CDBG-DR grantees and streamlining overlapping federal environmental reviews, including full NEPA-compliant reviews, to reduce administrative expenses and speed up the process of rebuilding homes. 

During the question-and-answer portion of the hearing, lawmakers discussed several key issues related to disaster recovery policy: 

• Agency Jurisdiction: Several lawmakers questioned whether long-term disaster recovery should remain under HUD or be consolidated under FEMA to reduce fragmentation across federal programs. Witnesses generally cautioned against moving long-term recovery entirely to FEMA, noting that FEMA is primarily structured for emergency response and short-term assistance, while HUD has deeper experience with long-term housing recovery and community development.  

• Geographic Equity in Funding: Lawmakers and witnesses also debated how HUD allocates CDBG-DR funds across impacted communities. Some raised concerns that allocation formulas based heavily on total dollar losses can disadvantage smaller and rural communities with fewer resources and limited local capacity. Others cautioned that any changes to the formula should also protect assistance for densely populated urban areas and vulnerable, low-income communities with significant recovery needs. 

• Pre-disaster Mitigation: Members also discussed the importance of proactive disaster mitigation and resilience. The hearing highlighted concerns that CDBG-DR and CDBG mitigation resources are generally tied to post-disaster supplemental appropriations, limiting the ability of communities to use these tools before disasters occur. Lawmakers explored potential legislative approaches that would allow states and local governments in high-risk areas to use CDBG resources more proactively for mitigation before the next major disaster. 

Watch a recording of the full hearing here.