Failed hurricane response leaves Matthew, Florence victims homeless. What’s next?
More than 3,000 people affected by Hurricane Matthew in 2016 and Hurricane Florence in 2018 are still waiting for their homes to be repaired or rebuilt.
Hundreds live in temporary housing, including hotels.
Geraldine and Willie Williams, a married couple now living in Greene County, have been living in a hotel for almost three years after they were told by the North Carolina Office of Recovery and Resiliency — the agency tasked with rebuilding and repairing many of the homes damaged by the hurricanes — to move out of their damaged home in 2019.
“Every time we asked for any questions about services, when is our start and end date, nobody knew any answers,” Geraldine Williams told state lawmakers this week. “So this is where we are today, we have basically felt, I feel that we have been totally deprived from any home in any type of living that we’re used to.”
The comments came at a nearly six-hour meeting Wednesday where lawmakers grilled Gov. Roy Cooper’s administration on why federal disaster recovery funds for Matthew and Florence — which made landfall six and four years ago, respectively — had not yet been used in ways that helped thousands of affected people in Eastern North Carolina.
Republican Senate leader Phil Berger and House Speaker Tim Moore established a legislative subcommittee on hurricane response and recovery in July 2022, with 12 members: eight Republicans and four Democrats, split evenly between House and Senate members. The group held its first meeting Wednesday, where even state officials acknowledged failures.
Here are some answers to questions about why relief efforts are taking so long and what’s next.
What kind of help is available?
There are many funding streams for disaster response and recovery efforts, including from the U.S. Small Business Administration (SBA), the Federal Emergency Management Agency (FEMA), and other sources.
But public and political scrutiny has been focused on the funds managed by NCORR, which was established in 2018 by the legislature, and is overseen by Democratic Gov. Cooper.
NCORR, also dubbed ReBuild NC, manages $778 million ($236.5 million for Hurricane Matthew and $542.6 million for Hurricane Florence) in federal recovery funds awarded by the U.S Department of Housing and Urban Development (HUD).
These funds must be spent by 2025, for Matthew and 2026, for Florence and are largely meant to be used to repair or replace homes owned by low-income families.
Who is in charge of managing the hurricane response and recovery funds?
Office of Recovery and Resiliency Chief Operating Officer Laura Hogshead, who previously worked as the HUD chief operating officer from 2013 to 2017, and Ivan Duncan, NCORR Chief Program Delivery Officer, acknowledged the agency’s failings at the committee meeting Wednesday.
“Let’s be frank, we know why we are here, this recovery is not going as you want it to go, it is not going as I want it to go. It is certainly not going as the families sitting behind me and out in Eastern North Carolina want it to go. And that is on me,” Hogshead said.
According to Hogshead, these HUD allocations are “the funds of last resort” intended to address the remaining needs of low-income families.
How far along are they?
To date, work on just 789 out of 4,197 homes have been completed, according to a presentation shared by Hogshead during her testimony.
To be eligible for aid, applicants must go through an eight-step process, which runs from the initial intake, inspection and environmental review requirements to award determination, contracting, and construction.
The largest group of applicants — 1,146 — are bottlenecked in the contracting process. Over 700 of those have had a general contractor assigned but are not yet in active construction.
As of Sept. 14, five general contractors are actively working and NCORR has 300 staff members, Hogshead said.
For Hogshead, bottlenecks have largely been due to supply-chain challenges during the COVID-19 pandemic — which she said have led to workforce shortages and difficulties hiring new contractors — as well as federal red tape associated with using the HUD funds.
Richard Trumper, director of the Office of State Budget and Management’s Disaster Recovery program, also testified at the meeting. The OSBM-DR manages more than $50 million in state funds allocated for recovery efforts through state laws known as Disaster Recovery Acts for Matthew and Florence and over $136 million in other disaster recovery funds.
According to Trumper, to date, OSBM-DR has helped 903 families with housing recovery services and is currently helping 24 families impacted by the hurricanes. It’s expended 82.2% of DRA funds, turned down just over 100 applicants and has 13 staff members.
What are the proposed solutions?
At the request of the legislature, Hogshead provided information on changes NCORR is making, including:
To expedite documentation requirements, applicants now will have to provide three to four documents instead of the previous 12 to 14 required.
The agency under federal rules is required to account for all other benefits received from a homeowner to recover from storm damage. To account for this, NCORR required applicants to pay back the duplicate funds in a single payment via cashiers check. Now applicants, who may have spent the benefits they initially obtained through another program, can apply for promissory notes at 0% interest and pay via the loaned money.
The agency is changing from contract case management to state case managers, so that families can have the same case manager from beginning to end for each project. Previously, the contracts were split between application steps, which lead to families being passed off between case managers at critical points.
NCORR has simplified its award letter and homeowner grant agreement to be more readable, understandable and flexible.
Simplified appeals processes, which is important for families to get answers.
Paying general contractors faster with a third-party check vendor, so that NCORR does not have to abide by a state policy which stipulates a state agency that gets an invoice can’t pay it for 30 days. This is particularly important for small general contractors that can’t wait for payment, she said.
Hiring more staff to assist general contractors with the required federal paperwork.
To expand the pool of general contractors, the agency moved over the past six months from solely posting to a pre-qualified list, to posting to any general contractor that is interested and licensed. Postings now go to the state’s Interactive Procurement System website.
Hogshead suggested to lawmakers that they raise the informal construction bid threshold, currently set to $30,000 under state law. If the threshold is raised, NCORR could assign more projects directly to general contractors instead of going through the formal procurement process, which is intimidating for a lot of general contractors, Hogshead said.
Hogshead said that for recent work on manufactured housing units by general contractors, they are placing a timeline requirement to have the unit on the lot within 65 days, or NCORR begins “talking damages,” she said. To date though, NCORR has not recouped any damages from general contractors.
What happens next?
The list of steps Hogshead mentioned above is not comprehensive but the committee’s lawmakers largely agreed that these steps seemed unlikely to fix the backlog and get people home in a timely manner.
Lawmakers expressed concern for the lack of accountability for general contractors that failed to complete projects, as well as for the delayed action by NCORR to enact changes and modifications.
The committee will reconvene around Dec. 14, according to Sen. Brent Jackson, the committee co-chair. Rep. Sarah Stevens requested that NCORR provide weekly updates to the legislature.
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