HUD OIG Describes Challenges Households Face with Federal Disaster Assistance

The HUD Office of the Inspector General (OIG) published a memorandum describing problems households might encounter when attempting to obtain recovery assistance after a presidentially declared disaster. The memorandum calls for better coordination of federal, state, and local efforts. The report, issued for “informational purposes,” also lists all of the federal agencies and HUD offices that comprise the federal disaster assistance system.

The “Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1998” was designed to bring an orderly and systematic means for state and local governments to provide federal disaster assistance to impacted households.  But the OIG claims that the “path for citizens is not always as ‘orderly and systematic’ for a variety of reasons.” Households encounter lengthy delays from the initial application process to the closing of their cases due to inconsistent communication, coordination, and collaboration.

A major source of assistance comes in the form of Community Development Block Grant Disaster Recovery (CDBG-DR) funds that are provided after a disaster through a special supplemental Congressional appropriation. CDBG-DR is meant to supplement standard recovery assistance from the Federal Emergency Management Agency (FEMA) and the Small Business Administration (SBA). The OIG notes that generally at least 50% of CDBG-DR funding must benefit low and moderate income (LMI) households, those with incomes at or below 80% of the area median income. However, in some instances, a significant portion of CDBG-DR funding was not provided to LMI households. For example, the Steps Coalition reported that only 23% of Mississippi’s CDBG-DR funds after Hurricane Katrina in 2005 benefitted LMI households. The Mississippi Center for Justice reported that five years after Hurricane Katrina, the state failed to rebuild homes.

Another problem identified in the report has to do with FEMA Disaster Recovery Centers (DRCs), facilities for residents to get information about and apply for various disaster assistance. DRCs are staffed by FEMA, SBA, state government, and volunteer organization officials. The OIG notes that after-action reports suggest DRC processes are not organized to meet households’ needs. After-action reports from Hurricane Sandy in 2013 indicate that 38% of the calls received shortly after the hurricane resulted in people receiving a prerecorded message instructing them to access a website or call back later. Hurricane Sandy after-action reports indicate that FEMA staff were inexperienced and generally unprepared to answer questions about FEMA programs.

The OIG notes that SBA disaster loans are dispersed faster than CDBG-DR grants. Consequently, some homeowners receive a SBA disaster loan and become ineligible for a CDBG-DR grant, disadvantaging them because the SBA loan must be repaid while a CDBG-DR grant does not require repayment.

The OIG report describes nine HUD offices involved in the disaster recovery system: Community Planning and Development, Housing Counseling, Multifamily Housing Programs, Fair Housing and Equal Opportunity, Federal Housing Administration, Government National Mortgage Association, Policy Development and Research, Field and Policy Management, and Disaster Management and National Security.

The OIG concludes that HUD needs to improve communication, coordination, and collaboration among federal and state agencies, nonprofits and volunteers, and that HUD should document challenges the public encountered during recent disasters to better prepare for the future.

The April 10, 2017 OIG Memorandum, “Navigating the Disaster Assistance Process, 2017-OE-00028,” is at: