On April 10, the Texas General Land Office (“GLO”) released a draft of the State of Texas Plan for Disaster Recovery: Hurricane Harvey – Round 1 (the “State Action Plan”). The State Action Plan outlines the GLO’s proposed use of $5.024 billion in Community Development Block Grant Disaster Recovery (“CDBG-DR”) funds allocated to the state of Texas by the U.S. Department of Housing and Urban Development (“HUD”).
Activities proposed under the State Action Plan will cover counties included in FEMA’s Hurricane Harvey disaster declaration
. Programs within the city of Houston and Harris County will be governed by separate action plans due to both jurisdictions receiving direct allocations of CDBG-DR funds from HUD.
The draft released by the GLO will be open for public comment until April 26. Following the comment period, a final version of the State Action Plan will be submitted to HUD for approval.
The State Action Plan proposes allocation of CDBG-DR funds for the following uses:
- Homeowner Assistance ($1.048 billion): Rehabilitation and reconstruction of single family homes damaged by Hurricane Harvey. Seventy percent of funds used under this program are required to benefit low and moderate income residents.
- Local Buyout and Acquisition Program ($275.6 million): Buyout assistance for owners of damaged homes and assistance with relocation to homes located outside of floodplains.
- Homeowner Reimbursement Program ($100 million): Funds for the reimbursement of up to $50,000 per household for expenses incurred in connection with repairs to a damaged primary residence.
- Homelessness Prevention Program ($50 million): Protection of low and moderate income households from the immediate threat of homelessness by providing (i) up to $10,000 per household in mortgage payment assistance for a primary residence, (ii) up to $1,000 per household in utility bill assistance and (iii) up to 24 months of tenant-based rental assistance.
- Affordable Rental Program ($250 million): Rehabilitation, reconstruction and new construction of affordable multifamily residential rental housing.
- Partial Repair and Essential Power for Sheltering Program ($72.67 million): Repairs to homes that sustained less than $17,000 in damage.
- Local Infrastructure Program ($413.4 million): Restoration of local infrastructure and corresponding improvements to allow for long-term recovery and future disaster mitigation.
- Economic Revitalization Program ($100 million): Forgivable loans to small businesses adversely affected by Hurricane Harvey.
- Local, Regional and State Planning ($137.6 million): Funding for studies and planning activities intended to facilitate urban planning, design and capacity-building in connection with future mitigation and recovery efforts.
- Administrative ($251.2 million): Administrative costs associated with implementing the State Action Plan.
Of particular interest to affordable housing developers will be the funds allocated to the Affordable Rental Program. Of the $250 million in CDBG-DR funds allocated to this program, a maximum award of $25 million is available per development for rehabilitation, reconstruction and new construction of affordable housing in areas covered by the State Action Plan.
Projects receiving funds under the Affordable Rental Program must satisfy the following requirements:
- For a period of 20 years or more, at least 51% of the units in a project must be set aside for households earning 80% or less of Area Median Family Income. Units set aside for these households must be made available at “affordable rents”.
- “Affordable rents” will be determined using the High HOME Investment Partnership rents and restrictions set forth in any applicable land use restriction agreements.
- Development must contain eight or more rental units under common ownership.
- Construction must be completed within 18 months of the effective date of any agreement signed awarding Affordable Housing Program funds.
All projects proposed by applicants for funds under the State Action Plan are subject to an Affirmatively Furthering Fair Housing review (an “AFFH Review”) by the GLO. Among other factors, an AFFH Review will evaluate the following:
- A proposed project’s area demography
- Socioeconomic characteristics
- Housing configuration and needs
- Educational, transportation and healthcare opportunities
- Environmental hazards or concerns.
- As part of each AFFH Review, the GLO will also look for evidence that a proposed project will lessen racial, ethnic and socioeconomic concentrations and promote affordable housing in areas of low poverty and low minority concentration.
Additional requirements and information about the Affordable Rental Program will be made available to potential applicants when the GLO releases its Affordable Rental Program Notice of Funding Availability.