The Role of HUD Housing Programs in Response to Disasters

CRS Report for Congress
The Role of HUD Housing Programs
in Response to Past Disasters
Updated January 6, 2006
Maggie McCarty, Libby Perl, and Bruce E. Foote
Analysts in Social Legislation
Domestic Social Policy Division

Congressional Research Service ˜ The Library of Congress

The Role of HUD Housing Programs
in Response to Past Disasters
Hurricane Katrina has resulted in the displacement of tens of thousands of
families from their homes. While its magnitude is unprecedented, the resulting need
to shelter and house displaced families is not. The Department of Housing and
Urban Development (HUD), the nation’s agency with a mission to provide safe and
decent housing for all Americans, has played a role in meeting those needs in the past
and is playing a role in the wake of Katrina. This report looks at HUD’s current
programs and how they have been used to respond to past disasters.
The report begins by introducing the concept of a continuum of housing needs
following a disaster. Displaced families’ needs range from emergency shelter to
temporary and permanent housing. While the Federal Emergency Management
Agency (FEMA) has primary responsibility for coordinating disaster relief efforts and
providing certain services to help communities recover, other federal agencies,
including HUD, also play an important role.
HUD’s programs fall into three distinct categories. The direct housing
assistance programs include the Section 8 Housing Choice Voucher program, the
public housing program, and project-based rental assistance (including Section 202
and Section 811 programs for the elderly and disabled). They can be used to provide
temporary housing for both families who were receiving housing assistance at the
time of the disaster as well as those who were not. The block grant programs, the
Community Development Block Grant (CDBG) and HOME Investment Partnerships
Programs, provide flexible funding sources to states and localities to meet housing
and other community development needs, including those in times of disaster. The
Federal Housing Administration (FHA) at HUD provides single-family and multi-
family mortgage insurance, the rules of which become more flexible following a
In order to better understand the role HUD has played in response to disasters,
this report profiles crises in which the housing stock was severely damaged.
Congress provided emergency supplemental funding to HUD in response to each of
the following disasters: Hurricane Andrew, Midwest Flooding, the Northridge
Earthquake, and the 2004 Florida Hurricanes.
HUD programs have been used as a conduit for funneling short-, interim-, and
long-term funding to disaster-stricken communities many times in the past, however,
Katrina’s impact on the region’s housing stock eclipses that of any other natural or
manmade disaster in the history of this country. While looking to prior uses of HUD
resources in times of disaster may be informative, given the scope of Katrina, new
and broad initiatives to meet the interim- and long-term needs of the affected region
and its residents may be considered in the 109th Congress. This report contains
references to other CRS products that track activities specifically in response to
Hurricane Katrina. This report will not be updated.

NameArea of ExpertiseDivisionTelephone and E-Mail
Eugene BoydCommunity and
economic development,
including CommunityG&F7-8689
Grants, Brownfields,
empowerment zones
Bruce FooteHomeownership,
including FHA,DSP7-7805
predatory lending,
housing, GSEs, RESPA
Jody FederFair Housing and7-8088
Pamela JacksonHousing tax policy,
including the Low
Income Housing Tax7-3967
Credit and otherG&
incentives for rental
housing and owner-
occupied housing
Maggie McCartyAssisted rental housing,
including Section 8,DSP7-2163
public and
housing, HOME
Libby PerlHousing for special
populations, includingDSP7-7806
the elderly, disabled,
homeless, HOPWA
Division abbreviations: ALD — American Law; DSP — Domestic Social Policy;
G&F — Government and Finance

In troduction ......................................................1
Emergency Housing Needs......................................1
Direct Assistance Programs......................................3
Flexible Block Grants..........................................4
Mortgage Programs............................................5
A Look At Past Disasters............................................6
Hurricane Andrew.............................................7
Midwest Flooding.............................................8
Northridge Earthquake.........................................10
2004 Hurricane Season........................................12
Conclusion ..................................................15
List of Tables
Table 1. Emergency Supplemental Appropriations for Disaster Assistance in
Which HUD Received Funds, FY1992-FY2005......................6

The Role of HUD Housing Programs
in Response to Past Disasters
Hurricane Katrina has resulted in the displacement of tens of thousands of
families from their homes. While its magnitude is unprecedented, the resulting need
to shelter and house displaced families is not. The Department of Housing and
Urban Development (HUD), the nation’s agency with a mission to provide safe and
decent housing for all Americans, has played a role in meeting those needs in the past
and is playing a role in the wake of Katrina. This report is designed to look at HUD’s
current programs and their ability and authority to respond to housing crises, and the
way that Congress has expanded that role and authority in the past. It does not track
the Department’s response to Hurricane Katrina; see CRS Report RS22358, HUD’s
Response to Hurricane Katrina, by Maggie McCarty, Libby Perl, Bruce E. Foote.
Emergency Housing Needs
Before looking at existing housing resources, it is useful to think about the
housing needs that emerge after a disaster. Research by E.L. Quarantelli1 identified
four major stages of housing need following a disaster: emergency shelter, temporary
shelter, temporary housing, and permanent housing. Emergency shelter is designed
to provide a safe location during or immediately after a disaster. In the case of
Hurricane Katrina, people sought emergency shelter on roofs and overpasses, for
example. Temporary shelter is one stage beyond emergency shelter, and while it lasts
longer than emergency shelter, families are generally not able to establish day-to-day
routines during their stay. Temporary shelter includes mass shelters that provide
food and sleeping accommodation, and homes temporarily shared by friends or
family. Temporary housing is housing that is unique to a family and allows them to
begin to establish day-to-day routines, but is not seen as permanent. It can last for
months or even years, and examples include the temporary trailers often made
available while damaged homes are undergoing repair. Permanent housing is a
familiar concept and can include families’ return to their former residences, new
residences in or near their original communities, or permanent relocation in another
While most aspects of emergency response are led and organized at the state and
local level, the federal government provides resources to aid their efforts.2 The

1 E.L. Quarentelli, Sheltering and Housing After Major Community Disasters: Case Studies
and General Observations, University of Delaware Disaster Research Center, 1982.
2 For more information on the relationship between the federal and local levels of

Federal Emergency Management Agency (FEMA) generally provides assistance to
meet all four states of shelter and housing need, as authorized under the Robert T.
Stafford Disaster Relief and Emergency Assistance Act (P.L. 93-288). FEMA helps
localities designate evacuation areas to provide emergency shelter, and it coordinates
with municipalities and organizations such as the American Red Cross and other
charitable organizations to establish temporary shelters. FEMA also provides, in
conjunction with states and municipalities, temporary housing options including
rental assistance payments — sometimes under contract with HUD3 — that allow
families to find temporary accommodation in the private rental market as well as
temporary physical structures, such as trailer homes. Finally, FEMA also provides
loans and grants to help families repair damaged homes.4 While FEMA is the
primary disaster response agency, other federal agencies also contribute housing
resources, including the Department of Commerce (the Small Business
Administration, primarily), the Department of Agriculture (the Rural Housing
Service), the Treasury (various tax programs and incentives, including the Low
Income Housing Tax Credit (LIHTC)), and HUD, the agency that is the focus of this
report.5 Furthermore, a large majority of the restoration and creation of permanent
housing is met through the use of private and public insurance.6
Existing HUD Programs and Authority
In responding to disasters, HUD generally focuses on aiding families in the final
two stages of housing need; temporary and permanent housing. HUD’s programs
and assistance in response to disasters fall generally into one of three categories:
direct assistance, flexible block grants to states and localities, and mortgage

2 (...continued)
government in response to a disaster, see CRS Report RS21227, The Emergency
Management Assistance Compact (EMAC): An Overview, by Keith Bea.
3 Through contracts, called Mission Assignments, FEMA tasks and reimburses other federal
agencies for providing services under the Stafford Act.
4 FEMA disaster assistance is governed by the provisions of the Stafford Act. For more
information, see CRS Report RL33053, Federal Stafford Act Disaster Assistance:
Presidential Declarations, Eligible Activities, and Funding, by Keith Bea.
5 For a summary of disaster assistance programs, see CRS Report RL31734, Federal
Disaster Recovery Programs: Brief Summaries, by Mary Jordan.
6 For more information, see CRS Report RL32825, Hurricanes and Disaster Risk Financing
Through Insurance: Challenges and Policy Options, by Rawle O. King, and CRS Report
RL32972, Federal Flood Insurance: The Repetitive Loss Problem, by Rawle O. King.

Direct Assistance Programs
One primary form of direct assistance provided by HUD is rental assistance
provided through the Section 8 Housing Choice Voucher program.7 Section 8
vouchers are used by low-income families to reduce their housing costs in the private
market to an “affordable” level.8 Families with vouchers pay 30% of their incomes
towards rent and the federal government pays the difference between the families’
contributions and the actual rent, up to a limit.9 In order to be eligible, families must
be very low income,10 however, 75% of all vouchers are statutorily targeted to
extremely low income families.11 The subsidies are portable, meaning families can
move anywhere in the country with their vouchers. The program is administered at
the local level by quasi-governmental Public Housing Authorities (PHAs), and
Congress currently funds approximately 2 million vouchers. In FY2005, Congress
provided almost $15 billion for the voucher program.
Another form of direct assistance provided by HUD is low-rent public housing.
Very low income families are eligible to live in one of the nearly 1.2 million units of
public housing owned and maintained by local PHAs. Families living in public
housing pay 30% of their incomes towards their housing costs, and PHAs receive two
streams of federal subsidies — operating funds and capital funds — to help make up
the difference between tenant rents and the costs of maintaining the properties.
Operating funds are used to help cover day-to-day expenses including utilities, social
services, staff and security. Capital funds are used to meet modernization needs,
such as building repair and refurbishment. In FY2005, Congress provided
approximately $2.5 billion each to the capital and operating funds.12
The final form of direct assistance provided by HUD is a hybrid between
vouchers and public housing, called project-based rental assistance. The primary
project-based rental assistance programs are Section 8 project-based rental assistance,
the Section 202 program for the elderly, and the Section 811 program for the
disabled. In all three programs, private landlords own and manage housing units for
which the rent is subsidized by the federal government. Families who live in the

7 For a discussion of Section 8 vouchers in response to Hurricane Katrina, see CRS Report
RL33173, Hurricane Katrina: Questions Regarding the Section 8 Housing Voucher
Program, by Maggie McCarty.
8 Housing is generally considered affordable if its costs account for no more than 30% of
a family’s income.
9 The formula is more complicated than presented here. For more information, see CRS
Report RL32284, An Overview of the Section 8 Housing Program, by Maggie McCarty.
10 Very low income is defined as income at or below 50% of the local area median income.
11 Extremely low income is defined as income at or below 30% of the local area median
12 The FY2005 appropriation for the public housing Operating Fund was artificially low by
about $1 billion because of a one-time savings that Congress was able to realize. For more
information, see CRS Report RL32869, The Department of Housing and Urban
Development (HUD): FY2006 Budget, by Maggie McCarty, Libby Perl, Bruce Foote, and
Eugene Boyd.

units pay roughly 30% of their incomes towards rent and the federal government pays
the landlord the difference between the tenant contribution and the negotiated rent
for the unit. Generally, these buildings are FHA-insured (see discussion of FHA
insurance below). In FY2004, 1,309,427 units received project-based Section 8
rental assistance, 75,227 units received Section 202 rental assistance, and 21,646
units received Section 811 rental assistance. In FY2005, Congress provided over $5
billion for project-based Section 8, over $230 million for Section 811, and over $740
million for Section 202.13
HUD’s direct assistance programs can be both affected by disasters as well as
used as tools in recovering from disasters. When public housing units are damaged,
HUD can tap into an existing emergency capital reserve. For private owners of
HUD-assisted units, insurance is often available to cover damage, as are SBA loans
and HUD loans (discussed below).
HUD-assisted families displaced by a disaster retain their assistance. Displaced
voucher holders are eligible to find another unit in which to use their vouchers. For
public housing and other project-based assisted families, HUD identifies vacant
HUD-assisted units to which they are eligible to relocate.
HUD can also provide resources to non-assisted households; in other words,
households that were not previously receiving HUD housing assistance prior to a
disaster. Vacant units of HUD direct-assistance housing can be made available
during a disaster for non-assisted households. In the past, Congress has also created
special emergency short-term vouchers that can be used to provide temporary
housing to displaced families.
Flexible Block Grants
HUD administers a number of flexible block grant programs that provide funds
to states and localities. The Community Development Block Grant (CDBG)
program is the largest of these, funded at $4.9 billion in FY2005. CDBG funds are
formula-allocated to states and local governments in support of 23 categories of
eligible activities, including neighborhood revitalization, economic development, and
housing activities. Seventy percent of CDBG funds must be used on eligible activities
and projects that principally benefit low- or moderate-income persons. CDBG
grantees are not required to provide a local match. For more information on the use
of CDBG funds for disaster recovery, see CRS Report RS22303, Community
Development Block Grant Funds in Disaster Relief and Recovery, by Eugene Boyd.
The HOME Investment Partnerships Program provides formula-based block
grant funding to states, units of local government, Indian tribes and insular areas to
fund affordable housing initiatives. Eligible activities include acquisition,

13 Note that the appropriations level for project-based Section 8 is lower than the program
level because a number of units are funded under long-term contracts that do not require
annual appropriations until the contracts expire. Also note that the appropriations provided
to the Section 202 and 811 programs include funding for capital grants in addition to rental

rehabilitation and new construction of affordable housing as well as rental assistance
for eligible families. Grantees must meet a 25% match requirement, and 90% of all
assistance must primarily benefit families at or below 60% of the area median
income. For both HOME and CDBG, grantees must submit consolidated plans
detailing how they intend to use funds to meet local needs.
HUD also administers several other special purpose grants and block grants
targeting special populations, including the Native American Housing Block Grant,
the Homeless Assistance Grants, and the Housing for Persons With AIDS grants.
When communities are impacted by a disaster, HUD has the authority to waive
many regulatory requirements governing the use of HOME and CDBG funds.14
Generally, HUD will issue such waivers and permit local communities to redirect
HOME and CDBG funds to meet disaster recovery needs, both short and long-term.
Congress has also used CDBG, and, to a smaller extent, HOME, as vehicles for
providing emergency funds to communities impacted by disasters.
Mortgage Programs
While HUD does not provide any direct mortgage loan programs, the Federal
Housing Administration (FHA) does provide both single and multifamily mortgage
insurance. These insurance programs provide security to lenders to encourage them
to make loans on terms that would not otherwise be available to prospective
homebuyers and to investors wishing to develop multifamily projects serving low-
and moderate-income families.
When the President declares a disaster, as in the case of Hurricane Katrina, the
declaration automatically triggers certain procedures with regard to FHA-insured
mortgages in the affected areas. The procedures remain in effect for one year from
the date of the declaration. The following procedures become effective: (1) a
moratorium on foreclosures is in effect for 90 days from the date of declaration; (2)
lenders are encouraged to offer special forbearance, mortgage modification,
refinancing, and waiver of late charges to affected borrowers; (3) families whose
residences were destroyed or severely damaged are eligible for 100% financing under
Section 203(h) of the National Housing Act for the cost of reconstruction or
replacement of the residences; (4) damaged properties become eligible for Section
203(k) financing under which the costs to purchase and to rehabilitate the property
are included in one loan, and HUD waives the requirement that the property has been
completed for more than one year prior to application for a Section 203(k) mortgage;
(5) the underwriting guidelines are relaxed to permit disaster victims to qualify for
loans even if their total monthly debt, including the proposed mortgage, would equal
45% of gross income; and (6) lenders are directed to ensure that hazard claims are
expeditiously filed and settled, and lenders may not retain hazard insurance proceeds
to make up an existing arrearage without the written consent of the borrower.

14 For the CDBG program, the Secretary’s waiver authority can be found at 42 U.S.C. 5321;
for the HOME program, waiver authority can be found at 42 U.S.C. 12840.

The Section 203(h) program is available for borrowers who already own homes
in the affected area. The loans are limited to the FHA loan limit for the area, subject
to the provision that the loan may not exceed 100% of the appraised value of the
property. In some cases it may not be possible to obtain 100% financing. It may
often be the case that the cost to repair or replace the property exceeds the appraised
value of the property. This is the reason that most lenders require borrowers to
obtain hazard insurance that covers the replacement cost of the property instead of
its appraised value.
The Section 203(k) program permits borrowers who do not already own homes
to purchase and rehabilitate properties in the area that are either abandoned by
owners, or are being sold by owners who do not want to repair them and remain in
the area.
The current FHA underwriting guidelines provide that a prospective borrower’s
total debt, including the proposed mortgage payment, may not exceed 41% of the
borrower’s gross monthly income. In recognition of the fact that borrowers in these
areas may have to incur debt to replace personal property, the underwriting guidelines
are relaxed to permit loans to borrowers whose total debt is up to 45% of gross
monthly income. The limit may even be exceeded if justified by compensating
A Look At Past Disasters
In order to better understand the role of HUD in meeting the housing needs of
families and communities impacted by disasters, the following section looks at
several past disasters characterized by major housing losses. This section is meant
to be an introduction and is not meant to be a comprehensive assessment of post-
disaster housing and community recovery. It does not include a discussion of broad
community redevelopment nor does it include a discussion of the use of tax
Table 1 lists past disasters in which Congress has provided supplemental
appropriations to HUD, dating back to 1992.
Table 1. Emergency Supplemental Appropriations for Disaster
Assistance in Which HUD Received Funds, FY1992-FY2005
FiscalDate signed
yearDisaster name/typeinto lawPublic law number
1992Hurricane AndrewSept. 23, 1992P.L. 102-368
1993Midwest floodsAug. 12, 1993P.L. 103-75
1994Northridge earthquakeFeb. 12, 1994P.L. 103-211
1996Oklahoma City bombingApr. 26, 1996P.L. 104-134

1997Upper Midwest floodingJune 12, 1997P.L. 105-18

FiscalDate signed
yearDisaster name/typeinto lawPublic law number
1998El Niño floodsMay 1, 1998P.L. 105-174
1999FloodingOct. 21, 1998P.L. 105-277
2000Hurricane FloydOct. 20, 1999P.L. 106-246
2002Terrorist attacksJan. 10, 2002P.L. 107-117
2002Terrorist attacksAug. 2, 2002P.L. 107-206
2005Florida hurricanesOct. 13, 2004P.L. 108-324
Source: CRS search of supplemental appropriations legislation identified in CRS Report RL33053,
Federal Stafford Act Disaster Assistance: Presidential Declarations, Eligible Activities, and Funding,
by Keith Bea.
Hurricane Andrew
On August 24, 1992, Hurricane Andrew struck the coast of southern Florida as
a category 5 hurricane, and then moved across the Gulf of Mexico to Louisiana,15
weakening to a category 3 hurricane as it moved northward. The majority of the
damage occurred in Florida’s South Dade County, including the cities of Homestead,
Florida City, and Miami. At the time, Andrew was the most destructive hurricane
the United States had experienced. Twenty six people died, approximately 250,00016
were displaced, and damage was estimated to reach $26.5 billion. In all, over

25,000 homes were destroyed, and more than 101,000 were damaged.17

In response to Hurricane Andrew, Congress passed the Dire Emergency
Supplemental Appropriations Act, which the President signed into law on September
23, 1992 (P.L. 102-368). It transferred $183 million from FEMA to HUD for
additional Section 8 vouchers, not only for victims of Hurricane Andrew, but for
those of Hurricane Iniki, which struck Hawaii on September 11, 1992, and Typhoon
Omar, which struck Guam on August 28, 1992. The transfer was expected to fund
an estimated 12,000 two-year vouchers for families left homeless by Hurricane18
Andrew. Another $100 million was allocated for the development or acquisition
of public housing, including major reconstruction of obsolete public housing projects,
in the areas affected by Hurricanes Andrew and Iniki, and Typhoon Omar. Congress
also appropriated $60 million for the HOME program. An additional $500,000 was

15 Hurricane Andrew was upgraded from a category 4 to category 5 hurricane in 2002 by a
committee from National Oceanic and Atmospheric Administration/National Hurricane
Center. “After Ten Years Hurricane Andrew Gains Strength,” NOAA Press Release,
August 21, 2002.
16 National Hurricane Center, [].
17 Department of Housing and Urban Development, “HUD Aids Families, Communities
After Hurricanes,” Housing Today, fall 2004.
18 Housing and Development Reporter, September 28, 1992, p. 386.

appropriated for housing counseling assistance to both tenants and homeowners.
Finally, FHA received $30.3 million to allow it to insure loans worth up to $2.4
billion to assist with rebuilding efforts. These loans were expected to support about
95,000 units of single-family and multi-family housing.19 In connection with use of
the Section 8 funds, the public housing funds, and the HOME funds, P.L. 102-368
gave the Secretary of HUD the power to waive any provision of any statute or
regulation that the Secretary administered, except those that require
Hurricane Andrew destroyed over 11,000 manufactured homes in Florida and
Louisiana. Manufactured homes were hit hardest by the hurricane.20 For example,
Andrew destroyed 97% of all manufactured homes in Dade County, compared to

11% of all single family homes.21 After studying the damage to manufactured homes,

HUD developed new construction standards to increase their wind resistance. 22 The
new rule required improved design to make structures resistant to wind up to 110
miles per hour.23
Midwest Flooding
During the summer of 1993, 10 Midwestern states experienced rainfall levels
that exceeded the normal range, resulting in large-scale flooding of the Mississippi
and Missouri Rivers, and various smaller rivers and tributaries that flow into them.24
In nine states (Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota,
South Dakota, and Wisconsin) rivers overflowed their banks and levees, destroying
homes and requiring many to evacuate. According to FEMA, 534 counties were
declared eligible for disaster aid, and 168,340 people applied for federal assistance.
Approximately 50 people died as a result of the floods, and 54,000 people were left
homeless. Estimates of property damage ranged from $12 to $16 billion.25

19 Ibid.
20 HUD defines a manufactured home as “a structure, transportable in one or more sections,
which in the traveling mode, is eight body feet or more in width or forty body feet or more
in length, or, when erected on site, is three hundred twenty or more square feet, and which
is built on a permanent chassis and designed to be used as a dwelling with or without a
permanent foundation when connected to the required utilities, and includes the plumbing,
heating, air conditioning, and electrical systems contained therein.” 24 CFR section 3280.2
21 Federal Register, vol. 59, p. 2457, January 14, 1994.
22 The regulations are found at 24 CFR sections 3280.1-3280.904 (2005).
23 Federal Register, vol. 59, pp. 2456-2471, January 14, 1994.
24 Lee W. Larson, “The Great USA Flood of 1993,” National Oceanic and Atmospheric
Administration, presented at International Association of Hydrological Studies conference,
June 24-28, 1996.
25 “The 1993 Great Midwest Flood: Voices Ten Years Later,” Federal Emergency
Management Agency, May 2003. (Hereafter cited as “The 1993 Great Midwest Flood:
Voices Ten Years Later.”)

In August 1993, Congress passed the Supplemental Appropriations for Relief
from the Major, Widespread Flooding of the Midwest Act (P.L. 103-75). The law
appropriated $50 million for HUD’s HOME program, and $200 million for CDBG,
of which $25 million was earmarked for immediate recovery needs not reimbursable
by FEMA. On February 12, 1994, P.L. 103-211 made available an additional $500
million in CDBG funds for both the Midwest flood recovery efforts, and the damage
caused by the 1994 Northridge earthquake in California. Of the $500 million, the
HUD Secretary was given the authority to transfer up to $75 million to the HOME
program. In connection with use of both the HOME and CDBG funds, P.L. 103-75
gave the Secretary of HUD the power to waive any provision of any statute or
regulation that the Secretary administered, except those relating to fair housing,
nondiscrimination, the environment, and labor standards.
HUD directed that CDBG funds be used only to repair, replace or restore
facilities, including housing, damaged by the floods.26 HUD waived the limits on the
amount of CDBG funds that could be used for new construction for flood-damaged
properties. All nine affected states received CDBG funds in 1993 and 1994. Illinois
received $84.1 million, Iowa $96.3 million, Kansas $37.2 million, Minnesota $27.1
million, Missouri $136.8 million, Nebraska $23.1 million, North Dakota $19.6
million, South Dakota $12.8 million, and Wisconsin $13.1 million.27 HOME dollars
were also distributed to each of the nine flood-damaged states. Illinois received
$10.8 million, Iowa $11.4 million, Kansas $3.4 million, Minnesota $2.7 million,
Missouri $15.3 million, Nebraska $1.3 million, North Dakota $2.6 million, South
Dakota $1.3 million, and Wisconsin $1.3 million.
After floods it is common for local communities to engage in mitigation
activities that will protect properties located on flood plains against future damage.
Mitigation activities include buy outs, relocation, elevation, and flood proofing. In
the buy out, local communities purchase the properties of businesses and
homeowners located on flood plains. Owners agree to sell voluntarily so that they
can afford to relocate to areas that are not at risk of flooding. Some of the cities that
were damaged by the Midwest flood used CDBG money to buy out properties located
on flood plains. For example, St. Charles County, Missouri used $8.8 million in
CDBG funds together with $5.78 million from FEMA to purchase 1,159 properties
located on the flood plain.28 Arnold, Missouri used $1.4 million in CDBG funds
combined with an additional $2.9 million from FEMA to buy out 72 properties.
After the Midwest flood, a total of 12,385 properties were mitigated through a
combination of funds, including CDBG. Of these, 11,888 were bought out, 356 were
relocated, 31 were elevated, and 110 were flood proofed.29

26 Housing and Development Reporter, August 30, 1993, p. 230.
27 “Sharing the Challenge: Floodplain Management Into The 21st Century,” Report of the
Interagency Floodplain Management Review Committee to the Administration Floodplain
Management Task Force, June 1994, p. 23.
28 “The 1993 Great Midwest Flood: Voices Ten Years Later,” p. 29.
29 Ibid. A-19.

Northridge Earthquake
At 4:30 on the morning of January 17, 1994, a 6.7 magnitude earthquake hit the
greater Los Angeles area. The Northridge Earthquake was the costliest in the
nation’s history, with losses estimated at between $20 and $40 billion. More than 50
people were killed and more than 9,000 were injured.30 Over 65,000 residential
buildings were damaged in Los Angeles, which represented more than 250,000 units
of multifamily housing and almost 50,000 units of single family housing.31
Congress responded to the disaster by passing several supplemental
appropriations bills. The Northridge Emergency Supplemental Appropriations bill,
signed into law on February 12, 1994 (P.L. 103-211), provided nearly $900 million
in appropriations to HUD programs for impacted communities. Two-hundred
million was directed to provide Section 8 rental assistance/vouchers to impacted
families. Twenty-five million was provided to repair damaged public housing and
$100 million was provided to repair damaged privately-owned assisted housing
through the Flexible Subsidy Fund.32 Congress provided CDBG with $500 million,
up to $75 million of which was transferrable to the HOME block grant program, to
be used both for communities impacted by the Northridge Earthquake as well as
those still recovering from the earlier Midwest flooding. For all of these funds, the
Secretary was given the authority to waive or specify alternative requirements for any
statute or regulation in connection with the obligation of the Secretary or use by the
recipient of the funds, as long as the waiver was not inconsistent with the overall
purpose of the statute or regulation. The waiver authority was not available in the
case of fair housing, nondiscrimination, environmental or labor standards. In
addition to the funding provided, P.L. 103-211 made modifications to the Section

203(h) and Section 203(k) programs within the Federal Housing Administration,

expanding the benefits that could be provided to households impacted by the
Northridge earthquake, although the changes were only effective for 18 months.
The Northridge Earthquake resulted in the displacement of thousands of
families; as of April 1994, 88,000 people had not returned home, 57,000 of whom
were staying with friends and family. In recognition of the serious housing problem,
Los Angeles convened a housing task force on January 20, 1994 that included
participants from the city, the county, the American Red Cross, the California
Department of Housing and Community Development, the Governors Office of
Emergency Services, FEMA, and HUD. The task force had two main objectives;

30 United States Geological Survey, USGS Response to an Urban Earthquake — Northridge
‘94, 1996. Available at [].
31 Department of Housing and Urban Development, Preparing for the “Big-One”: Saving
Lives Through Earthquake Mitigation in Los Angeles, California, January 1995.
32 The Flexible Subsidy Fund was an account that provided federal aid for troubled
multifamily housing projects, as well as capital improvement funds for both troubled and
stable subsidized projects. No new commitments are being made through this program

first, to get people into shelters and registered with FEMA and second, to quickly get
people out of shelters and into replacement housing.33
Emergency short-term vouchers, funded both through the Section 8 program and
through CDBG34 were provided to impacted families. A high percentage of those
voucher holders were able to use them within the same zip code as the home from
which they were displaced.35 City officials interviewed a year after the Northridge
Earthquake expressed concern about what would happen to families with temporary
vouchers when they expired, noting that most families who had received them had
not ceased using them.36 They stated that the city was pursuing options to have the
vouchers made permanent and, in fact, they were eventually made permanent by
Congress and absorbed into the Housing Authority of Los Angeles County’s
mainstream voucher program.37 A July 26, 1994 report by the HUD Inspector
General praised HUD and the PHAs for responding quickly to the Northridge disaster
by providing vouchers, but found that there was an overlap in federal help. Families
were provided vouchers without first having been screened to assure that they were
not also receiving FEMA assistance. HUD’s Office of Public and Indian Housing
responded that families may have used the FEMA assistance for purposes beyond
rent, such as storage, purchase of furniture, moving expenses and utility connection
charges and that the assistance should therefore not necessarily be considered
HUD used the $100 million in supplemental Flexible Subsidy Funds to develop
a new program, introduced that spring, called the HUD Earthquake Loan Program
(HELP). The funds were available first for FHA-insured multifamily properties that
were impacted by the earthquake, and second for other non-FHA-insured multifamily
HUD-assisted properties that had been impacted.38 HELP funds could be used to
cover mortgage payments, loss of rent, temporary staffing costs, tenant relocation
expenses, building repair or replacement, retrofitting, and to meet code requirements.
A HUD Inspector General report issued in 1998 found that HUD had not designed
the HELP initiative with sufficient controls to prevent waste, fraud, and abuse. The

33 Joanne Nigg and Richard Eisner, Earthquake Response: Intergovernmental Structure and
Policy Innovation, University of Delaware Disaster Research Center, 1997.
34 Jie Ying Wu and Michael Lindell, Housing Reconstruction after Two Major Earthquakes:
The 1994 Northridge Earthquake in the U.S. and the 1999 Chi-Chi Earthquake in Taiwan,
Disasters, 2004, 28(1) pp. 63-81.
35 Spangle Associates with Robert Olson Associates, Inc., The Recovery and Reconstruction
Plan of the City of Los Angeles: Evaluation of its use after the Northridge Earthquake,
August 1997.
36 Ibid.
37 John Gonzales, “Rent Subsidies for Quake Victims to be Extended Indefinitely,” Los
Angeles Times, Metro Desk, May 29, 1996.
38 HUD Notice H-94-15.

report identified at least $7.1 million in questionable funds awarded to 27 projects
and directed the Department to investigate and attempt to recover those funds.39
HOME and CDBG funds were used in the short-term to provide rental
assistance, to meet social service needs (i.e. set up intake centers and provide housing
counseling),40 and some funds were used for longer-term redevelopment, including
financing repairs on units that could not qualify for Small Business Administration
(SBA) loans.41 Shortly before the earthquake struck, HUD had amended the
minimum property standards to which HUD funded housing must comply to include
seismic safety standards. It was hoped that new units assisted with HELP, HOME,
or CDBG funds would be better equipped for a future earthquake as a result of the
changes to these standards.42
2004 Hurricane Season
The 2004 Atlantic hurricane season was one of the most active and destructive
in recent memory. Eight named storms formed, four of which, in the span of about
four weeks, wreaked havoc on the southern United States across 12 states, although
Florida was by far hit the hardest. On August 13, a category 4 hurricane, Charley,
made landfall on the southwest coast of Florida. The strongest storm to hit the
United States since Hurricane Andrew, Charley caused about $14 billion in damages
and resulted in 10 deaths in the United States.43 On September 6, a category 2
hurricane, Frances, made landfall in the United States, striking the central western
coast of Florida. Frances left five dead in Florida and $9 billion in damages.44 Less
than two weeks later, on September 16, Ivan, a category 3 hurricane made landfall
on the gulf coast of Alabama and the western Florida panhandle. Hurricane Ivan left

25 dead in the United States and over $13 billion in damages.45 Finally, on

39 HUD Inspector General Report August 31, 1998 98-CF-112-0001.
40 Spangle Associates with Robert Olson Associates, Inc., The Recovery and Reconstruction
Plan of the City of Los Angeles: Evaluation of its use after the Northridge Earthquake,
August 1997.
41 Mary Comerio, et al., “Residential Earthquake Recovery: Improving California’s Post-
Disaster Rebuilding Policies and Program,” September 1996.
42 Department of Housing and Urban Development, Preparing for the “Big-One”: Saving
Lives Through Earthquake Mitigation in Los Angeles, California, January 1995.
43 National Weather Service, National Hurricane Center, Tropical Prediction Center,
Tropical Cyclone Report on Hurricane Charley, available at [

2004charley.shtml ?].

44 National Weather Service, National Hurricane Center, Tropical Prediction Center,
Tropical Cyclone Report on Hurricane Frances, available at [

2004frances.shtml ?].

45 National Weather Service, National Hurricane Center, Tropical Prediction Center,
Tropical Cyclone Report on Hurricane Ivan, available at [

2004iva n.shtml ?].

September 26, category 3 Hurricane Jeanne struck the eastern coast of Florida,
leaving four Floridians dead and $6.8 billion in damages.46
President Bush responded by making five supplemental funding requests to
Congress of almost $14 billion. Congress responded by passing two supplemental
funding measures totaling $13.6 billion. The Military Construction Appropriations
Act and Emergency Hurricane Supplemental Appropriations law (P.L. 108-324),
provided $150 million for CDBG. The funds were designated only for use for
disaster relief, long-term recovery, and mitigation in communities affected by
disasters designated by the President between August 31, 2003, and October 1, 2004.
The funds were to be awarded by the Secretary directly to states, who were permitted
to allocate them to entitlement communities. The Secretary was also given discretion
to waive or specify alternative requirements for any statute or regulation in
connection with the obligation of the Secretary or use by the recipient of the funds,
as long as the waiver was not inconsistent with the overall purpose of the statute or
regulation. The waiver authority did not apply to fair housing, nondiscrimination,
environmental or labor standards, and at least 50% of the funds provided had to
benefit primarily low- and moderate-income families. The funds could not be used
for any project underway before the disaster unless the project was impacted by the
disaster. States were required to provide a 10% match. The conference report
accompanying the law (H.Rept. 108-773) directed HUD to coordinate with FEMA
to ensure that funds were used only for disasters and targeted to the areas of greatest
need. The Conferees also directed HUD to report back to the Appropriations
Committees prior to any allocation of funds and to submit quarterly reports on their
use thereafter.
Prior to the allocation of emergency CDBG funds, HUD took a number of steps
to respond to the 2004 Florida hurricanes. HUD identified vacant HUD subsidized
multifamily units and HUD-owned homes that could be used as temporary housing,
relocated displaced HUD-assisted families, permitted HOME and CDBG grantees
to reprogram existing funds to meet disaster needs, activated the 203(h) program and

203(k) program waivers and issued a 90-day foreclosure moratorium for FHA-

insured properties.47
On December 10, 2005, HUD published a notice in the Federal Register
informing impacted states of their eligibility for emergency CDBG funds. The notice
included the state allocations and informed states that, in order to access the funds,
they must first submit a plan detailing how they will use the funds. The allocation
formula used SBA and FEMA data on unmet housing, business and public assistance
needs for all designated areas in major disaster declarations. The formula weighted
unmet housing needs at 50%, unmet business needs at 25%, and unmet public
assistance needs at 25%. The notice also specified waivers applicable to HOME and

46 National Weather Service, National Hurricane Center, Tropical Prediction Center,
Tropical Cyclone Report on Hurricane Jeanne, available at [

2004j eanne.shtml ?].

47 “HUD Aids Families and Communities,” Housing Today, fall 2004, available at

CDBG funds used for disaster assistance, primarily related to planning
Over the course of the recovery, HUD also provided more than $26 million in
emergency capital reserve funding to repair damaged public housing units; $40
million in additional Section 8 voucher funding to meet the increased costs of serving
currently assisted families whose rent had gone up because of a housing shortage
caused by the hurricanes; $10 million for repair of Section 202 and Section 811
properties; and $16 million to relocate displaced HUD-assisted families.49
The four 2004 hurricanes resulted in damage to more than 700,000 homes50 in
Florida. Poor families were disproportionately impacted.51 In response, on
November 10, 2004, the governor of Florida named a hurricane housing task force
to advise the state legislature on how to create more affordable housing. On February
18, 2005, the group made its final report. It recommended, in addition to the regular
allocation of housing funds, the state legislature approve a one-time infusion of $354
million in state funds to develop several new affordable housing programs including,
among others, a Hurricane Housing Recovery Program, a Rental Recovery Loan
Program, and a Farmworker Housing Recovery Program.52
In March 2005, the state of Florida Department of Community Affairs (DCA)
submitted its plan to spend its emergency CDBG funds to HUD. The Action Plan for
Disaster Recovery states that emergency CDBG funds will be used for repairs, long-
term recovery and mitigation. Given Congress’s direction that funds be used in the
hardest hit areas, the DCA’s plan specifies that rather than providing funds to all 67
areas that had been declared emergencies in the wake of the hurricanes, they will
invite the 15 communities that were hardest hit to apply for emergency CDBG funds.
The plan specifies that the first priority will be given to infrastructure and public
assistance projects. Second priority will go to economic development and business
assistance projects, including those designed to promote job creation and/or retention.
Third priority is given to housing repair and development projects. The plan explains
that housing projects are given the lowest priority because of the expectation that the
state legislature will fund the governor’s affordable housing plan (described earlier).53

48 Federal Register, vol. 69, no. 237, December 10, 2004.
49 Report and Recommendations of the Hurricane Housing Work Group, submitted to the
Governor of Florida on February 18, 2005.
50 Ibid. The work group report noted that 15,000 families still lived in FEMA trailers.
51 Ibid. According to the housing work group report, 36% of families registered with FEMA
had annual incomes of less than $20,000, and of those deemed to have inadequate insurance,

53% had incomes of less than $20,000 or less and 74% had incomes less than $30,000.

52 Ibid.
53 Florida Department of Community Affairs, Action Plan for the Use of Disaster Recovery
Funds, available at [].

In times of major disaster, private citizens often cannot reasonably be expected
to address their own housing and shelter needs. When the United States Housing Act
of 1937 set forth a housing policy for the nation, it stated that
the Federal Government should act where there is a serious need that private54
citizens or groups cannot or are not addressing responsibly.
While the Federal Emergency Management Agency is the primary federal entity
charged with responding to a disaster, HUD is the primary entity charged with
meeting the nation’s housing needs. The exact role that each agency is to play
following a disaster is not entirely clear. FEMA assistance is available to meet a
range of housing needs, from emergency shelters, to trailers, to home repair grants.
The review of past disasters included in this report shows that HUD’s programs have
primarily been used to provide longer-term housing aid, such as rental vouchers and
new housing construction, as well as aid to communities to repair infrastructure and
promote economic development. In the months following 2005’s Hurricane Katrina,
HUD’s programs were not called on to play a major role in responding to families’
housing needs. FEMA’s response has been met with criticism from observers,
including Members of Congress, some of whom have called for an expansion of
HUD’s role. As the focus shifts from response to Katrina to the inevitable review of
that response, the appropriate role for HUD to play following a disaster may be the
subject of Congressional debate

54 42 USC § 1437.