NACo submits comments on proposed CDBG-DR formula change

Key Takeaways

NACo submitted comments to the U.S. Department of Housing and Urban Development (HUD) on its notice proposing changes to the CDBG-DR formula, the methodology HUD uses to calculate disaster recovery allocations to states and localities. Counties respond to nearly 900 federally declared disasters each year, and many go on to administer CDBG-DR funds directly, making the formula's accuracy central to how quickly and effectively disaster survivors receive help rebuilding homes, businesses and infrastructure.

NACo’s letter supports HUD's stated objective of making the formula simpler and less dependent on FEMA and SBA data that often isn't finalized until after allocations must be made. At the same time, the letter raises concerns with several specific proposals under consideration, including a potential "catastrophic" eligibility threshold that could exclude small and mid-sized disasters, a policy presumption favoring state grantees over counties with proven administrative capacity, and a plan to calculate infrastructure and economic revitalization need as a fixed percentage of housing need rather than disaster-specific data.

The letter also asks HUD to update damage-tier definitions that have gone unrevised since Hurricane Sandy, to give counties timing certainty during the transition to any new formula, and to coordinate with the Office of Management and Budget on the effective dates of separate, pending changes to subrecipient monitoring rules under 2 CFR Part 200.

County Impact

Counties are frequently the entity leading disaster recovery on the ground, activating emergency operations centers, managing shelters and administering CDBG-DR funds as grantees or subrecipients. Changes to the formula's eligibility standards, data sources and grantee presumptions could directly affect whether a county's disaster qualifies for assistance and how accurately its unmet need is measured. NACo will continue engaging with HUD as it develops a final formula to ensure it reflects the real-world recovery needs of counties, particularly rural and infrastructure-heavy disaster areas.