News Release

JACKSON ANNOUNCES DISTRIBUTION OF $11. 5 BILLION IN DISASTER ASSISTANCE TO FIVE GULF COAST STATES IMPACTED BY HURRICANES
Funding will help states in long-term recovery of high impact areas

WASHINGTON - Housing and Urban Development Secretary Alphonso Jackson today announced HUD's plan to allocate $11.5 billion in disaster funding among five Gulf Coast states impacted by Hurricanes Katrina, Rita and Wilma. The emergency funding is provided through HUD's Community Development Block Grant (CDBG) Program to specifically assist Louisiana, Mississippi, Florida, Alabama and Texas in their long-term recovery efforts.

Jackson announced the following allocation among the five impacted states:

"Today, we take another major step toward fulfilling the President’s pledge to rebuild the Gulf region," said Jackson. "This is an investment in long-term recovery and re-building lives. It’s my hope that families who once had a home, can return home."

Donald Powell, Federal Coordinator for Gulf Coast Rebuilding, said, "We are pleased that Congress has appropriated these monies for the purpose of long-term recovery and rebuilding of the Gulf Coast. This program allows states leaders - who are closest to the people - to decide exactly how this grant money should be spent. Housing is an extremely important priority for long-term rebuilding of the region and will help ensure the economic vitality of the Gulf. In particular, we hope these funds are used to help meet the tremendous housing needs of people and families along the Gulf Coast. "

On December 30, 2005, President Bush signed legislation providing $11.5 billion in disaster relief to these five Gulf Coast states. By law, no one state could receive more than 54 percent, or $6.2 billion, of the total appropriation. In allocating this statutory maximum to the State of Louisiana, Jackson recognized the overwhelming need and long-term recovery challenges faced by the citizens of that state. The CDBG funding was allocated based on Congress' intent that areas of highest need and with greatest concentration of destruction receive priority consideration. In addition, HUD placed special emphasis on areas of particular unmet housing needs.

HUD will shortly publish a notice providing guidance to these states and to assist them in their long-term recovery planning, particularly as they relate to meeting the tremendous housing needs of their citizens. Once these local action plans are developed, they will be provided to HUD for review. Jackson added, "This money has got to get to the people and places that desperately need it."

Since 1974, HUD's Community Development Block Grant (CDBG) Program has allocated approximately $116 billion to state and local governments to target their own community development priorities. CDBG is one of HUD's oldest and most flexible programs. The rehabilitation of affordable housing and construction of public facilities and improvements have traditionally been the largest uses of the grants, although CDBG is also an important catalyst for job growth and business opportunities. CDBG funds are distributed by formula around the country based on a community's population, poverty, the age of its housing stock, and extent of overcrowded housing.

HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as well as enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.

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HUD's Methodology for allocating the Supplemental CDBG Appropriation

HUD analyzed data from several different sources:

• Federal Emergency Management Agency (FEMA) data on individuals who registered for assistance. Included in these files were inspection data for damaged housing, the location of the damaged homes, flood and hazard insurance information, and tenure status, income, and household size of the registrant;
• Small Business Administration (SBA) Disaster Loan Program data for individuals who applied for a disaster loan to cover the cost of damage in excess of insurance proceeds (if any) and inspection data on the value to repair the damaged property;
• National Oceanic and Atmospheric Administration (NOAA) estimates of maximum flood depths in Orleans and St. Bernard Parish, Louisiana on August 31, 2005;
• FEMA and U. S. Geological Service data on areas of maximum flood and storm surge inundation due to Hurricane Katrina in Mississippi; and,
• FEMA remote sensing data on areas deemed to have "catastrophic, extensive, moderate, limited, flood, or saturation" damage.

Using these data sources, HUD calculated for each of the five states, their extent of:

• Unmet housing needs, defined as uninsured homeowners and low-income renters whose homes had major or severe damage.
• Concentrated distress, defined as the total number of housing units with major or severe housing damage in counties where 50 percent or more of units had major or severe damage.

Fifty-five percent of the funds are allocated toward unmet housing needs, particularly the unmet needs of homeowners who likely would have purchased flood insurance had they known they were at significant flood risk. Perceiving they were at no or little risk, these homeowners had hazard insurance but did not have additional flood insurance.

The remaining funds are allocated toward concentrated distress, as these communities will have not only the greatest damage and destruction to their housing stock, but also the most intensive infrastructure and business damage not otherwise accounted for in our data, and the least locally available resources to address that damage.