We applaud the Department of Housing and Urban Development’s Office of Policy Development and Research for allowing public comments on how to ensure that CDBG-DR funds reach the rural and persistently poor communities disproportionately affected by disaster. CDBG-DR funds are a critical asset to communities facing devastation; offering the opportunity to prosper again. With the recommendations below from our Partners who live in and serve these areas, and experience these disasters first-hand, CDBG-DR grants can serve as a catalyst in persistently poor rural America to begin the journey to long-term recovery, precovery, and persistent prosperity.

Summary

• Measuring disaster impacts and unmet recovery needs caused by different hazards requires different data sources. Limiting the unmet housing needs assessment to FEMA IA and SBA registrants limits the universe of households with unmet needs. HUD needs to incorporate additional data sources, including rigorous state-level data sources, to accurately capture unmet recovery needs for the allocation methodology.

• Wildfire losses are included in a standard renters or homeowners insurance policy, so wildfire insurance penetration is much higher than that for floods/wind/earthquakes, which are covered by standalone hazard insurance policies. However, many LMI households who are insured are underinsured. Insurance costs in high fire risk areas are rising quickly to reflect growing climate risks and historical losses. Insurance policy coverage is not keeping up with steep increases in replacement costs, widening the underinsurance gap.

• Permanently authorize the program, which will allow HUD and communities to plan more concretely, deliver funding more quickly, and help Americans in need in a timely manner. While there are many steps in the CDBG-DR process from legislation to recipient, the largest delay is caused by the wait for Congress to act in response to a given disaster. In the absence of congressional action to make CDBG-DR permanent, HUD’s intention to create a Universal Notice is admirable and supported by PRT.

• HUD should count low- and moderate-income households that are underinsured as having unmet recovery needs, which will require looking beyond FEMA IA and SBA loan registrants.

• Most wildfire-impacted structures are destroyed, increasing per unit recovery costs. The current maximum unmet housing needs multiplier of $134,503 is less than half of typical per unit unmet housing recovery needs.

• Based on methodologies detailed in this response, HUD should increase its maximum unmet housing needs multiplier to at least $320,000 per severely damaged unit. PRT Comment_CDBG-DR_2.21.22Final

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Communities Unlimited, a PRT Partner, tells the story of a community affected by appraisal bias within their footprint: Pine Bluff, Arkansas. The population of Pine Bluff is 76% black/ African American and 18% white. The current median appraised value for owner occupied homes is $78,500. We can compare this to the nearby city of White Hall, with a population that is 70% white and 19% black, and an appraised median value of $170,300. Homes in Pine Bluff appraise significantly lower than homes in White Hall, with appraisers refusing to use comparables from the nearby city of White Hall to adjust to current market rates in the area.

Homeownership is valued in the United States because of its potential to build generational wealth. The effect of appraisal bias is that it devalues the homes of people of color, decrease the equity potential, and takes away from the homeowners’ ability to build generational wealth. Lower appraisal values resulting from appraisal bias can also impact the homeowner’s future purchasing power and the homebuyer’s ability to obtain a mortgage due to discrepancies between appraisal value and asking price. Appraisal bias is magnified in rural and underserved communities where there is a shortage of appraisers. Housing bias is one of many contributing factors for racial disparities in homeownership and wealth and financial well-being between white and communities of color, specifically black communities and must be addressed if we wish to correct the decades of systemic racism within housing policy and the housing industry. Read more here: ASC Appraisal Bias Letter_PRT_Final

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At Oweesta—a national Native community development financial institution (CDFI) intermediary—have been privileged to watch the birth, growth, and increasing maturity of the Native financial sovereignty moment. Led by Native CDFIs, the Native financial sovereignty movement acknowledges that nothing will change for Native communities without Native families having access to homeownership and Native small businesses having access to capital.

Read the full article here:  https://nonprofitquarterly.org/no-one-is-coming-to-save-us-forging-paths-to-native-financial-sovereignty/?mc_cid=bba34c03b9&mc_eid=a30c5af093 

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On February 1, House Majority Whip James E. Clyburn (D-S.C.), Rep. Hal Rogers (R-Ky.), Sen. Cory Booker (D-N.J.), and Sen. Rob Portman (R-Ohio) introduced the Targeting Resources to Communities in Need Act of 2022, H.R. 6531, which would direct federal funding to persistent poverty areas throughout the country.

Whip Clyburn’s 10-20-30 formula was created to help allocate funding to communities most affected by the Great Recession. The formula requires at least 10% of funds from some USDA Rural Development programs to be spent in persistent poverty counties (those where the poverty rate has been at least 20% for at least 30 years).

Most recently, the 10-20-30 formula has been adapted into a government-wide effort titled, The Targeting Resources to Communities in Need Act of 2022, H.R. 6531. The bill incorporates the Office of Management and Budget (OMB) to ensure that the formula is properly evaluated and adjusted to the government programs which fall under the bill’s umbrella. 

Persistent Poverty Areas (PPA) are historically some of the most underserved and forgotten places in the United States. “Access to opportunity is one of our nation’s most fundamental ideals, but too many Americans are being left out and left behind,” said Senator Cory Booker. 

The Targeting Resources to Communities in Need Act embraces Persistent Poverty Areas in the effort to create “the American Dream,” a narrative that they have been excluded from for far too long. 

Click here to read more about The Targeting Resources to Communities in Need Act of 2022: https://tinyurl.com/2p84zwzp 

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It is a critical opportunity for investment in 395 persistently poor counties throughout the Unites States, the majority of which are rural areas, small communities, and home to a significant population of people of color. Low- and moderate- income communities of color and tribal nations in economically distressed rural areas and small cities for too long have been unable to reach their full potential as existing federal support is fragmented.

Important to note is that RPP funding, if approved as originally designed, can be accessed directly by local leaders, utilized for building collaborations across sectors and geography, build the capacity of local leaders to better access state and federal funds, implement projects over a five-year time horizon. These aspects differentiate RPP from any existing federal program and has the potential to make lasting changes in rural communities so often left out of federal funding opportunities.

RPP funding can facilitate access to healthy food in existing food deserts, clean water, affordable housing, healthcare, and broadband. It is also an important tool to facilitate resiliency to natural disaster and other climate changes, and support local economies that are shifting in response.

In sum, RPP has the potential to reduce existing inequities, create broader access, strengthen local economies, and enable low- and moderate-income individuals to thrive by delivery funding efficiently to high performing locally grounded organizations.

We urge Congress to ensure persistently poor rural counties and small communities receive a significant investment in locally-led community and economic development initiatives by full funding the Rural Partnership Program at $4 billion.

A comprehensive compilation of information about the RPP can be found at

Potential federal Rural Partnership Program: current information page – The Aspen Institute

About the Partners for Rural Transformation

The Partners for Rural Transformation (PRT) is a coalition of six organizations committed to transforming the fortunes and futures of rural and Native communities by centering community needs and hopes in their work. Covering broad and diverse areas—including parts of Appalachia, the Mississippi Delta, the Deep South, the Rio Grande Valley, Native American communities, and the rural West—the six PRT partners bring crucial capital and capacity to small communities and towns where persistent poverty was created by design through slavery, genocide, displacement, and resource extraction. With more than 200 years of collective experience investing in the most difficult-to-reach rural communities, the PRT partners have served millions of people. Today, across 25 states, the partners serve 76 percent of the rural counties experiencing persistent poverty in the US. In the rural, persistently poor communities served by PRT members, 43% are people of color.

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This blatant disregard for the lives of communities of color is nothing new, and is veritably intentional. Led by a vision of a nation where persistent poverty no longer exists, the Partners for Rural Transformation call upon state governments to

1. Collaborate with local nonprofits to help spread the word in local rural communities

2. Serve as a referrer and/or complete applications for their constituents

3. Eliminate unnecessary protocol and paperwork required for residents to receive funding, per the federal government’s urging.

Implementing these recommendations will eliminate their structural biases and restrictions, deconstruct complicated and exploitative pathways to securing housing funds, and actively disperse funds to the rural families and individuals for whom the resources were intended.

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