Community Development Block Grant Disaster Recovery

Department of Housing and Urban Development (HUD) provides Community Development Block Grant Disaster Recover (CDBG-DR) funds to help communities to recover from Presidentially declared disasters. In November 2021, HUD announced it was awarding Washington State Department of Commerce to administer $18 million in CDBG-DR funds for long-term recovery and mitigation efforts in response to the 2021 Western Washington Storm and Flooding in the identified most impacted and distressed areas in Whatcom County including the City of Sumas (zip code 98295)

Commerce is coordinating with local, state, tribal, and federal partners to prioritize the use of funds within these fundings parameters.

The goal of the program is that all flood-impacted individuals and households have equitable access to the resources necessary to be housed safely, sustainably, permanently, affordably and in their housing of choice.

Who Qualifies

As designated by HUD, the identified most impacted and distressed areas in Whatcom County including the city of Sumas (zip code 98295).

Public Involvement

A draft plan will be developed with extensive public involvement. This will include a 30-day formal public comment period began. During that time, any future substantial amendments to the Action Plan would require another formal public comment period. The Department of Commerce is also committed to involving local partners working with Flood survivors.

Funding Parameters

In November 2021, HUD announced it was awarding Washington State Department of Commerce to administer $18 million in CDBG-DR funds for long-term recovery and mitigation efforts in response to the 2021 Western Washington Storm and Flooding in the identified most impacted and distressed areas in Whatcom County including the City of Sumas (zip code 98295).

Funding Limits

Total funds: $18,641,000
Minimum amount to expend in HUD-identified “most impacted and distressed”: $14,912,800
Mitigation set-aside amount (can be outside the target Area): $2,431,000
State admin/TA: Up to $932,050

Geographic Area

Applicable disaster impacted area(s): FEMA Disaster #4635 designated area
HUD-identified “most impacted and distressed” area: Zip Code 98295 (Sumas/Whatcom County)
Mitigation set-aside amount: Within the FEMA Disaster #4635 designated area

Grant Recipient/ Administrator

HUD CDBG-DR Grantee: WA State Dept of Commerce – Community Development Block Grant Program
Unit of General Local Government (UGLG) and Tribes: Potentially eligible to apply to state for CDBG-DR grant. Can pass funds to a sub-recipient to administer activities.
Special purpose district, non-profit: Potentially eligible to serve as the state’s direct sub-recipient and administer CDBG-DR funded activities for the state
State entity: Potentially eligible to directly administer CDBG-DR funded state activities

Eligible Activities

Housing:
- Housing rehabilitation, including elevations
- Land acquisition for new housing (URA)
- Infrastructure to new housing
- Relocation assistance
Floodplain:
- Buyouts
- Safe housing incentives
- Demolition and clearance
Infrastructure:
- Infrastructure construction
- Land acquisition for public facilities (URA)
  Economic
- Business assistance
- Façade improvements
- Relocation assistance (URA)
  Planning
Resilience (Does not need to meet LMI national objective*)

*must also meet a CDBG national objective
**Can fund local Federal/FEMA Match HCDA Section 105(a)(9)

Ineligible Activities

Forced mortgage payoff
New housing construction *some exceptions and 20 year affordability
Compensation for losses
Privately-owned utilities
Government buildings

CDBG National Objectives

Low- and moderate-income (LMI)
- Up to 80% of area median income by household size
- III.F.2. Overall, up to 70% of total funds to be expended for LMI benefiting LMI activities (unless HUD approved lower %)
LMI Area (LMA)
- Based on HUD LMI data: Sumas = 42.8% LMI; Census Tract/Block Groups in 98295 Zip Code < 51% LMI
Low- , moderate-, and middle-income (LMMI)
- *Up to 120% of area median income by household size
- II.B.5. Only for home-ownership assistance
LMI Safe Housing Incentive (LMHI)
- II.B.10 Tied to voluntary acquisition of LMI owned housing OR housing to be occupied by LMI household
Urgent Need (UN) – LMI alternative
- III.F.3. May expend up to 25% of total funds as an Urgent Need within 36 months after the applicable March, 2022/state’s Allocation Notice date
Slum & Blight (S&B) – (LMI alternative)
- Up to 25% of total funds expended to alleviate S&B

Unmet Needs for CDBG-DR

Affordable Housing: Align with the state housing recovery task force; HUD tiered housing response
- Home-ownership assistance
- Emergency rent, flood insurance
- New housing construction
Infrastructure: Warning systems, Communication systems and Transportation systems
Floodplain Mgt: Elevations & buyouts
Planning: Flood mapping and outreach/ education
Public Services: Emergency services, esp isolated areas
FEMA Match

Timing

Pre-award Phase ~May-Aug 2022
- Eligible incurred costs: As of incident date 11/13/2021
- Community Engagement: Identify community partners/stakeholders
Start-up Phase ~Jan 2023
- Action Plan comment period: 30 days including a public hearing
- Funding availability: After state CDBG-DR Action Plan approved and federal funding agreement executed, develop state grant application process
- Community engagement: Collect data, consult community and partners to assess need, identify gaps, prioritize use of funds, create Action Plan
Operations Phase ~2023-2026
- Funding expenditures: Process grant applications, execute grant contracts, and process payment requests
Closeout Phase ~2027-2028
- Fund expenditure deadline: 6 yrs from HUD signature date on federal funding agreement

Crosscutting Federal Requirements

Environmental / Cultural Resources: NEPA and Section 106
Acquisition abd Relocation: Uniform Relocation Assistance and Real Property Acquisition Policies Act, 24 CFR part 42 (URA)
Procurement / Labor Standards: Davis-Bacon and Related Acts
Civil Rights: Title VI and Fair Housing
Green & Resilient Building Standards: HUD Green Building, FEMA Building Code & Flood Mgt and Elevation standards

Funding Partners / Other Resources

Commerce Housing
Commerce OEDC
USDA RD
FEMA/WA EMD
Private/ Philanthropy (Whatcom Community Foundation)
HUD TA

Challenges

Maximizing community impact with CDBG-DR funds a year post disaster
Meeting a CDBG national objective when HUD LMI area data and LMI doc options are restrictive
Effectively targeting funds in designated Most Impacted Area
Achieving short-term impact while meeting HUD and federal crosscutting requirements for long-term objectives
Local government and partner capacity facing overlapping disaster and pandemic
Documenting no duplication of benefit

Through this Notice, HUD seeks to:

Advance equitable distribution of assistance, including planning for targeted assistance to residents of underserved communities, members of protected classes under fair housing and civil rights laws, and vulnerable populations who have been historically marginalized and can be adversely affected by disasters that often exacerbate existing inequities
Improve long-term community resilience by:
- Fully integrating resilience planning and hazard mitigation activities into disaster recovery to reduce the impacts of climate change and future disasters
- Encourage green recovery efforts (focusing on healthier water and air, and effective debris and waste management)
- Address environmental justice concerns associated with disaster recovery efforts
- Address recovery needs for accessible, resilient, and affordable housing for low- and moderate-income persons

Source: 6326-N-01 Allocations for CDBG-DR & Consolidated Waivers and Alternatives (PDF)