Third Appropriation Funding Recommendation Context: It is currently anticipated but not confirmed that the State of Louisiana will receive an additional $51,435,000 allocation from the Department of Housing and Urban Development (HUD) out of the $400 million in disaster assistance appropriated by Congress. If the current projected allocations are correct, HUD will have retained $236.3 million out of the $400 million for future disasters in 2017 or beyond. It is unclear how and when the remaining funds will be distributed, but we continue our discussions with HUD relative to the assessment of the state’s unmet needs. The different program budgets below provide some options as to how the additional funds may address outstanding recovery needs faced by the state. Considerations: Projected versus actual budgets: Current and projected program budgets are based on multiple assumptions and are estimates. The actual costs to fund the programs as currently designed may increase or decrease as the state can analyze a statistically significant sample of the various program applicants. Expanding the homeowner program and including new programs now present risks should the homeowner program cost more than what is currently projected. o For example, the average award of 40 homeowner inspections under the Phase I pilot homeowner program is $48,500, inclusive of reimbursement and repair costs. However, as part of the projections process, the state estimated an average award of $43,000 for the 4,000 homeowners projected to qualify under Phase I. o If this discrepancy is projected over the 8,000 applicants projected to participate in Phases I and II, this additional cost would add approximately $44 million to the program. o The state will have a better understanding of the actual value and costs of the average award once the program has processed more applications from a variety of income and flood impact levels. o The number of applicants who actually access the program could be lower than our current estimates, and may be considerably lower, based on current survey and application rates. o The program will have a better understanding of how many applicants to expect once the effects of the current and future outreach efforts become apparent. Other unbudgeted services and needs: The program has been designed in a manner that attempts to provide assistance to as many people as possible, while simultaneously working to help as many people get home as possible. As a result, there are certain services and eligible expenses that have been excluded from the current design of the homeowner program. o One service currently excluded is assistance for families to move out of their homes and temporarily relocate while construction is underway, should they choose Solution 1 in the homeowner program. For the most vulnerable families, this may become an obstacle to participating in the program; the cost of providing this assistance to homeowners could range $11,000‐$15,000 per family, given the contractor has up to 1
o
o
o
120 days to complete construction on the home. For example, if only 1,000 families are in need of these services, it could add $15 million to the program, a cost which is not currently budgeted. HUD allows the state to provide assistance to LMI homeowners who were approved an SBA loan, but declined it and never entered into a loan agreement with SBA. The cost of providing assistance to these homeowners is approximately an additional $5,152,000. Pecan Acres and Silverleaf are two examples of communities that have experienced repetitive losses resulting from different storm and flooding events in the recent past. It is estimated that the costs necessary to buyout, relocate and/or fund a permanent new housing opportunity for these at‐risk communities is an additional $3 million over what is currently budgeted for these families in the homeowner program. Legal services support for flood insurance claims: many homeowners have expressed an outstanding unmet need to repair their homes, even though they had flood insurance policies for more than the insurance proceeds paid to them. It is imperative homeowners attempt to fully collect on the insurance payments for which they are eligible, and the state can help its residents recover by making legal services support available to them to collect on their maximum allowable insurance claim. It is anticipated $5 million will help significantly in this effort.
I. Current program budgets and unmet needs: State of Louisiana CDBG‐DR First and Second Allocation Budgets Program Area Current Program Percentage of Allocation Total Restore Louisiana Housing Programs $1,423,693,120 85.92% Homeowner Program 78.08% $1,293,693,120 (relative % within housing programs = 90.87%)* Rental Housing Programs 7.85% $ 130,000,000 (relative % within housing programs = 9.13%)* Restore Louisiana Economic Recovery and 3.74% $62,000,000 Revitalization Programs Infrastructure Program (FEMA Public Assistance 6.34% $105,000,000 Match) Administration and Planning $ 66,278,880 4.00% Total Allocation $1,656,972,000 100% * Per requirements established by the Department of Housing and Urban Development, the state must consider the relative percentage of assistance provided to homeowner and renter programs, based on the unmet housing needs assessment presented to HUD in the Action Plan Amendment 1. The unmet housing needs assesses the homeowner need at 90.4% and the renter/homelessness prevention need at 9.6% of the total unmet housing need. 2
II. Additional Program Needs 1) Impacted Homeowner Populations and Homeowner Budget Scenarios Budget and Population Assumptions for All Scenarios:
Only homeowners with major or severe damages ($8,000 FEMA Verified Loss or at least 1 foot of flooding in the house) Inclusive of anticipated 15% project delivery costs Inclusive of anticipated environmental review costs Deducts duplication of benefits from Small Business Administration (SBA), Federal Emergency Management Agency (FEMA) and National Flood Insurance Program (NFIP), as applicable Dual‐tier award structure for prospective work and reimbursement awards (this approach largely accounts for the difference in the unmet need listed above ($2.45 billion) and the amount needed to serve the additional populations listed below ($1.64 billion)), unless otherwise noted
Scenario A: Expand eligible homeowners to include NFIP structural policy holders, using phased and LMI priority approach Scenario A Budget Assumptions:
25% reimbursement for all homeowners in Phases III‐VI (same as under current guidelines) 50% prospective work for homeowners 120% AMI or greater (same as under current guidelines)
POPULATION CURRENTLY ELIGIBLE WITH FIRST AND SECOND APPROPRIATIONS: Current eligible population: No NFIP ADDITIONAL IMPACTED POPULATIONS: Phase I Eligible, LMI only, if expanded to include NFIP holders, outside the 100 year floodplain Phase II Eligible, LMI only, if expanded to include NFIP holders, inside the 100 year floodplain Phases III‐VI, LMI only, if expanded to include NFIP holders, outside the 100 year floodplain Phases III‐VI LMI, if expanded to include NFIP holders, inside the 100 year floodplain, All Phases, Non‐LMI, if expanded to include NFIP holders, outside the 100 year floodplain All Phases, Non‐LMI, if expanded to include NFIP holders, inside the 100 year floodplain Projected Need for all NFIP Policy Holders 3
# Households
Assume 100% Participation
36,510 626
$1,298,847,954 $19,678,060
2026
$74,984,820
573
$9,640,739
2744
$68,603,182
3,584
$32,112,379
11,568
$135,426,946
21,121
$340,446,126
Scenario B: Increase the award for prospective work for homeowners with household incomes greater than 120% Area Median Income (AMI) Scenario B Budget Assumptions:
No NFIP policy holders are eligible for the program (same as under current guidelines) 25% reimbursement for all homeowners in Phases III‐VI (same as under current guidelines) ONLY INCREASE PROSPECTIVE WORK AMOUNT
Prospective Award % 60% for 120%+ AMI 70% for 120%+ AMI 80% for 120%+ AMI 90% for 120%+ AMI 100% for 120%+ AMI
Program Budget $ 1,327,115,245.00 $ 1,355,382,535.00 $ 1,383,649,825.00 $ 1,411,917,116.00 $ 1,440,184,406.00
Additional Funding Need $ 33,422,125.00 $ 61,689,415.00 $ 89,956,705.00 $ 118,223,996.00 $ 146,491,286.00
Scenario C: Increase the reimbursement award for homeowners in Phases III‐VI Scenario C Budget Assumptions:
No NFIP policy holders are eligible for the program (same as under current guidelines) 50% prospective work for homeowners 120% AMI or greater (same as under current guidelines) Homeowners in Phases I‐II are eligible for 100% reimbursement (same as under current guidelines)
ONLY INCREASE REIMBURSEMENT AMOUNT FOR HOMEOWNERS IN PHASES III‐VI Reimbursement % Program Budget Additional Funding Need 30% Reimbursement
$ 1,309,730,902.00
$ 16,037,782.00
35% Reimbursement
$ 1,320,613,850.00
$ 26,920,730.00
40% Reimbursement
$ 1,331,496,798.00
$ 37,803,678.00
45% Reimbursement
$ 1,342,379,746.00
$ 48,686,626.00
50% Reimbursement
$ 1,353,262,694.00
$ 59,569,574.00
4
2) Hazard Mitigation Grant Program (FEMA Match): $94 million Approximate Unmet Need: $94 million 3) Watershed Planning Approximate Unmet Need: $60,000,000 4) Comite River Diversion Canal Project: $190 million Approximate Unmet Need: $190 million Recommendation: # Households Homeowner Program: Expand program to fund Phase 1 NFIP holders LMI Households who declined SBA Loans Severe Repetitive Loss Communities Legal Services Support for NFIP holders Additional Funding for Rental Programs Watershed Planning: 10 Most Impacted and Distressed Parishes
TOTAL 5
Projected Budget $24,318,799
TBD, minimum of 626
108
$5,152,000
55
$3,000,000
$5,000,000
65
$4,163,422
10 most impacted and distressed parishes. Funding is for planning only, no construction costs, so the final benefit to this population is not currently defined.
$9,800,799
$51,435,000
Revised Recommended Total Program Budgets and Unmet Need: Program Area 2016 Severe Storms and Flooding : First and Second Allocations Homeowner $1,293,693,120 Assistance Program* Rental $130,000,000 Housing** $0 Interim Housing Assistance Business and $62,000,000 Agriculture $105,000,000 FEMA Nonfederal Share Match Infrastructure $0 Enhancement Admin & $66,278,880 Planning Totals $1,656,972,000
Third Allocation
Total Program Budgets
Total Congressional Request
Approximate Unmet Need Gap
$37,470,799
$1,331,163,919 $2,667,800,000
$1,336,636,081
$4,163,422
$134,163,422
$180,000,000
$45,836,578
$0
$0
$40,000,000
$40,000,000
$0
$62,000,000
$120,000,000
$58,000,000
$0
$105,000,000
$130,000,000
$25,000,000
$9,800,799
$9,800,799
$600,000,000
$590,199,201
$0
$66,278,880
$51,435,020
$1,708,407,020 $3,737,800,000
$2,095,671,860
*Homeowner assistance program total for all three allocations would be 90.8% of the amount allocated for both homeowner and rental housing programs. ** Rental and homelessness prevention programs total for all three allocations would be 9.2% of the amount allocated for both homeowner and rental housing programs.
6
