Written Testimony of Shaun Donovan
Secretary, United States Department of Housing and Urban Development (HUD)

Hearing before the Subcommittee on Homeland Security of the Senate Committee on Appropriations

Hurricane Sandy: Response and Recovery - Progress and Challenges

Wednesday, December 5, 2012

Chairman Landrieu, Ranking Member Coats, and Members of the Subcommittee, thank you for the opportunity to testify today regarding response and recovery to Hurricane Sandy, including both the progress we have made and the challenges that we face.

Hurricane Sandy and the nor'easter that followed have had immense and varied impacts in New York, New Jersey, Connecticut, West Virginia, Maryland, Delaware, Rhode Island, and a number of other States. Within the United States, the hurricane itself resulted in 121 confirmed fatalities, major flooding, structural damage, and power loss to over 8.5 million homes and businesses, directly affecting more than 17 million people. As a consequence of the combined effect of the storm, hundreds of thousands of residents left their homes and sought shelter from as far south as North Carolina, as far north as New Hampshire, and as far west as Indiana. Especially hard hit were New York and New Jersey, which are critical economic engines of our nation. These two States employ 12.7 million workers, accounting for about 10 percent of U.S. payroll employment. They export about $90 billion in goods annually, accounting for about 7 percent of such exports, and contributed $1.4 trillion to our gross domestic product (GDP) in 2011, accounting for more than 11 percent of GDP. Thus, recovery and rebuilding is not only a State and local priority, but a crucial national priority.

In addition to my concern as a citizen and as a member of this Administration, this is personal to me. I grew up in the region. I was born and raised in New York and worked on housing issues there, including serving as Mayor Bloomberg's Commissioner of the New York City Department of Housing Preservation and Development. I also worked on housing issues for Prudential Mortgage Capital in

New Jersey, and married a Jersey girl in New Jersey. Many of my friends have been directly affected by the storm's devastation. In light of my deep roots in the region, I am particularly concerned with the devastation that Sandy has caused, and especially honored to have the opportunity to help with recovery and rebuilding efforts.

I have already been to the affected areas on five trips over nine days since Sandy, including my trip with the President and Secretary Napolitano on November 15. I have seen much of the damage first hand, talked with State and local officials and citizens living with the aftermath of the storm, had discussions with Senators and Representatives from the area, including those who are here today, and have met with other federal officials working on the recovery effort, including our wonderful Federal Emergency Management Administration (FEMA) Administrator Craig Fugate. There is a lot to do, and it has already begun.

I have also talked to many who have been engaged in rescue and support efforts in the storm's aftermath and demonstrated extraordinary dedication and courage. Just as remarkable are the actions by average people I have spoken with - individuals who have demonstrated a different brand of heroism by simply reaching out to help their neighbors, even as they were facing their own losses. I have seen courage and determination that inspires me and my colleagues to work even harder, respond quicker, and develop more creative solutions.

In my testimony today, I will describe HUD's participation in the ongoing response and focus on recovery efforts concerning the storm, as we have done with respect to other such disasters, in close cooperation with our colleagues at FEMA and other agencies. I will also discuss the role that the President has asked me to play with respect to federal rebuilding efforts.

HUD's participation in ongoing response and focus on recovery efforts

Unfortunately, one of the major effects of storms like Sandy is destruction and damage to the homes and apartments where people live, and the displacement of numerous families and individuals. Accordingly, HUD has played a significant role in response to and recovery from past major storms, and is doing so with respect to Sandy as well.

Before I describe some of HUD's activities, it is important to note the unprecedented cooperation that is taking place among Federal, State, local, and tribal authorities. HUD, FEMA and other parts of the Department of Homeland Security (DHS), as well as the Departments of Transportation and Health and Human Services plus the Small Business Administration and the Army Corps of Engineers, are all in place and working together. We are all coordinating our work with State, local, and tribal officials, who are doing a truly herculean job on the response and recovery. This unprecedented level of cooperation and partnership is how we will continue to speed the recovery and related efforts to the most affected areas.

A key HUD priority has been providing immediate help to storm-displaced families to find temporary replacement housing, whether they were displaced from private or government-assisted housing. We have identified thousands of housing units, including more than 12,000 available units in HUD-assisted housing, and have been getting that information to displaced individuals. We also are allowing providers of housing for seniors the flexibility to open up vacant units to storm evacuees.

HUD has also focused on help to persons living in and owners of HUD-assisted housing damaged or destroyed by the storm. This includes, for example, helping to temporarily house displaced persons, getting boilers and generators to impacted developments that house low-income families, and waiving administrative requirements (while ensuring appropriate safeguards) so as to facilitate the rapid delivery of safe and decent housing to displaced PHA and multifamily housing residents. We have also increased fair market rental allowances to make it easier for displaced Section 8 voucher recipients to find replacement housing.

HUD is working to encourage the private sector to help displaced families. Shortly after the storm, I reached out to several private sector organizations to encourage their involvement in this effort, and a number have stepped forward at least partially as a result. This recognizes the importance of engagement by the private sector as well as government in relief efforts. For example, Angie's List is providing free, one-year memberships to one thousand homeowners in the New York City tri-State area to help with Sandy relief by making it easier for families to find local contractors, auto repair specialists, and health care professionals who are highly rated by other consumers. Walk Score has launched a website to support people in search of temporary housing after Sandy. HotelTonight recently announced a $60,000 contribution to the American Red Cross to support relief efforts for Sandy victims, and will donate 10 percent of its net revenues in New York City for the month of November to the Red Cross for this purpose.

We have deployed HUD personnel to help staff FEMA Disaster Recovery Centers and do other storm-related work. This has included providing local housing resource help, program information, and other help to storm victims, mobilizing special needs providers from other States to assist families in shelters, participating on State-led Disaster Housing Task Forces in New York and New Jersey, and activating our Northeast network of field offices to communicate daily with impacted PHAs.

There are more than 200,000 homeowners with FHA-insured mortgages in the affected areas in New York, New Jersey, and Connecticut. HUD has provided foreclosure protection for storm victims with FHA-insured mortgages through a mandatory 90-day moratorium on foreclosures.

We are also offering assistance to storm victims who must rebuild or replace their homes. In particular, FHA insurance is available to such disaster victims who seek new mortgages, and borrowers from participating FHA-approved lenders are eligible for 100 percent financing, including closing costs. HUD is also directing banks to provide insurance payments they receive related to the storm directly to homeowners, in order to avoid the problem that occurred after Hurricane Katrina where some mortgage companies used some insurance payments that were supposed to be used to rebuild damaged homes for other purposes. Senator Landrieu, I know that this was a particular concern of yours after Hurricanes Katrina and Rita, and I am very pleased that we have been able to take this step. HUD is working to get information on these and other assistance opportunities to affected homeowners.

HUD is also providing help to affected State and local governments and tribes. For example, we have provided waivers of existing rules so that existing Federal Community Development Block Grant (CDBG) and HOME funds can be used for disaster relief. Collectively, the CDBG and HOME grant programs allow grantees to meet a broad range of needs, including housing, economic development, infrastructure, and the provision of public services. We are also working with State and local governments and tribes to develop interim housing plans and to provide loan guarantees for housing rehabilitation.

The President's announcement of Secretary Donovan to lead Federal rebuilding efforts

As you know, on November 15, President Obama announced that I will lead coordination of the Federal action relating to Hurricane Sandy rebuilding efforts consistent with the National Disaster Recovery Framework (NDRF). I am honored to have been asked to carry out that function, particularly in light of my deep roots in the affected areas. This role is different from and in addition to the role that I usually carry out with respect to disasters as HUD Secretary. In understanding my role in relation to the NDRF, it is important to understand the NDRF and how it was developed.

Early in his first term, President Obama recognized that previous experience concerning Hurricane Katrina and other disasters highlighted the need for additional guidance, structure, and support to improve how we as a Nation address disaster-related recovery and rebuilding challenges. In September 2009, President Obama charged Secretary Napolitano and me to lead work on this effort and to establish a Long Term Disaster Recovery Working Group, composed of more than 20 Federal agencies. HUD, DHS, and the Working Group consulted closely with State and local governments as well as experts and stakeholders, and worked on improving the Nation's approach to disaster recovery and on developing operational guidance for recovery efforts. As a result, FEMA published a draft of the NDRF in 2010, carefully reviewed and considered more than one hundred public comments, and the final version of the NDRF was published in September, 2011.

The NDRF addresses the short, intermediate, and long-term challenges of managing disaster-related recovery and rebuilding. It recognizes the key role of State and local governments in such efforts, and sets forth flexible guidelines that enable Federal disaster recovery and restoration managers to operate in a unified and collaborative manner and to cooperate effectively with State and local governments. The NDRF defines core recovery principles; roles and responsibilities of recovery coordinators and other stakeholders; flexible and adaptable coordinating structures to align key roles and responsibilities and facilitate coordination and collaboration with State and local governments and others; and an overall process by which communities can capitalize on opportunities to rebuild stronger, smarter, and safer after a disaster. As one of the architects of NDRF, I am committed to it and look forward to helping carry it out.

My responsibilities in this role will occur in coordination with the NDRF and will involve cooperating closely with FEMA and the other agencies already involved in recovery efforts. The focus will be on coordinating Federal support as State and local governments identify priorities, design individual rebuilding plans, and over time begin implementation. I will be the Federal government's primary lead on engaging with States, tribes, local governments, the private sector, regional business, non-profit, community and philanthropic organizations, and the public on long-term Hurricane Sandy rebuilding.

Applying the principles set forth in the NDRF to our rebuilding efforts in response to the current crisis, we will support state and local governments as they create a process through which communities can rebuild stronger, smarter, safer, and more resiliently. This cannot and will not be a one-size-fits-all, top-down, Washington-knows-best project. That is why we will follow and work with those who know these communities best - the people who live and work in them. That is how truly vibrant and sustainable communities are rebuilt.

A key objective will be to cut red tape for State and local governments and tribes as they seek Federal assistance for longer term projects and identify priorities for community development. These areas of work will include housing, infrastructure systems, small business and local industry, health systems, social services, and natural and cultural resources.

One of my roles will be to help identify priority needs for long-term rebuilding by working directly with State, local, and tribal authorities to communicate priorities to Washington. There is significant need, including supporting small business through disaster loans and other relief; rebuilding homes while creating safer, more responsible building codes; restoring and protecting the environment; and building better and stronger infrastructure. I will serve as the principal point of contact for the President and his senior advisors, and will be focused on providing effective, integrated, and fiscally responsible support from across the Federal government to support States, local governments, tribes, the private sector, and faith-based and other community organizations in the rebuilding effort.

Work on the structure and functioning of this new effort is proceeding rapidly. As I have mentioned, I have already met with a number of the most directly affected Federal, State, and local officials, and I am looking forward to working with this Committee and other Senators and Representatives on this important effort.

Thank you again for the opportunity to testify today. I would be pleased to answer any questions you may have.


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