NLIHC Submits Comments on Proposed Community Development Block Grant Disaster Recovery (CDBG-DR) Formula

By Sydney Phillips, NLIHC DHR Intern

NLIHC and its Disaster Housing Recovery Coalition (DHRC) submitted a comment on September 14, 2026, in response to the U.S. Department of Housing and Urban Development’s (HUD) request for comment on potential changes to the Community Development Block Grant Disaster Recovery (CDBG-DR) allocation formula, as required by the “21st Century ROAD to Housing Act” passed earlier this year. HUD’s allocation formula governs how the agency divides funds passed by Congress to distribute to states, territories, Tribal governments, and municipalities impacted by disasters for long-term recovery efforts. Questions asked by the notice included ceasing use of the U.S. Small Business Administration (SBA) Disaster Loan Data, the impact of the formula on rural areas and Tribal land, and ways to streamline data collection to ensure funds are distributed by the deadlines created by the authorization of the program in the recently passed legislative package.  

HUD has primarily used data from FEMA Individual Assistance (IA) and Public Assistance (PA) data, including damage reports and information on insurance coverage, to calculate the level of need a disaster-impacted area has after FEMA and insurance funds have been distributed. HUD also modifies this number by the number of low-income renters and homeowners in the impacted area. This “serious unmet need” is calculated for housing, infrastructure, and economic revitalization to give HUD a clearer picture of long-term recovery needs.  

However, because FEMA IA is so difficult to access for many disaster survivors, it can create an incomplete picture of need. This often penalizes low-income communities and rural areas that often have lower property values on average. In its comment, NLIHC and the DHRC called for HUD to address the potential formula bias that may penalize rural and low-income communities in urban and rural settings, which may be disadvantaged by standing formula calculations.  

The comment identifies several areas of improvement, including support for HUD’s future use of private sector construction costs within CDBG-DR funding calculations; recognizing that the unique nature of disasters means the impact of disasters will vary greatly based on the amount of housing and “social vulnerability” of community; and supporting the creation of specific thresholds making it more likely that tribal governments will be able to access these funds.  

Read the full comment.