Disaster Discourse: The Hagerty Blog

HUD Allocates Second Tranche of ESG Funding Under CARES Act

FRIDAY, JUNE 12, 2020 AS OF 4:00 PM EDT

On June 9, 2020, the United States (US) Department of Housing and Urban Development (HUD) announced the allocation of almost $3 billion in additional Emergency Solutions Grant (ESG-CV) funding appropriated by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). These funds, plus $1 billion previously allocated, are available to assist states, local governments, and territories in addressing the needs of individuals and families who are homeless or receiving homeless assistance as a result for the COVID-19 Pandemic. A complete discussion of HUD’s allocation process and amounts can be accessed at: Methodology for Round 2 Allocations of ESG CARES Act Funds.

Many ESG-CV grantees may have been expecting to receive three times the amount they received under the initial $1 billion allocation but, in allocating the $3 billion, HUD implemented the CARES Act directive to abandon the standard ESG allocation formula. The revised formula incorporates a wide range of relevant data points; such as unsheltered homeless populations, sheltered homeless populations, populations at risk of homelessness, and geographical areas with the greatest need, based on factors such as the risk of transmission of COVID-19, high numbers or rates of sheltered and unsheltered homeless, and economic and housing market conditions. 

Breno Assis : Unsplash

Why did Congress push HUD in this direction? As HUD noted in its summary, the long-existing ESG formula “only targets modestly well to homeless and has no targeting to places with high rates of unsheltered homeless. That is because the ESG formula is allocated using the CDBG formula … which only has a modest relationship to where homelessness needs are most severe.” Homeless advocates and, to a degree, HUD have long wanted to refocus the ESG allocation process, and the CARES Act appropriately provided the necessary flexibility for this supplemental funding. Whether this approach translates to future ESG funding is to be determined. 

Eligible ESG uses always include street outreach, emergency shelter, homeless prevention, rapid re-housing, and administration and data costs. The ESG language in the CARES Act opens the door to additional activities such as training on infectious disease prevention and mitigation, hazard pay for staff, and temporary emergency shelters without minimum use periods. HUD’s June 9th press release highlights the ability of grantees to provide hotel/motel vouchers for homeless families and individuals, as well as essential services including childcare, education services, employment assistance, outpatient health services, legal services, mental health services, substance abuse treatment services, and transportation. 

HUD is providing extensive technical assistance to ESG-CV grantees which can be accessed through www.HUDExchange.info. This first stop for any grantee should be the bi-weekly Daily Resource Digest, which provides a range of information from subject matter experts on best practices and lessons learned.

Concurrently, HUD has weekly online “office hours” on COVID-19 response issues for homeless assistance providers every Friday from 2:30 – 4:00 PM EDT. The office hours feature various federal agencies and their partners for a live question-and-answer session, with previous session recordings also available online.

For those grantees that need more hands-on help, there is always direct technical assistance (TA). HUD is likely to expand its direct TA offerings as the CARES Act permitted HUD to use $40 million of the ESG-CV appropriation for the purpose. We are likely to hear more about this in the future as existing efforts are expanded.

ESG-CV grantees should also be aware of various flexibilities already made available by HUD. A few key resources are:  

Expect HUD to maintain an aggressive posture in working with grantees and homeless services providers to deploy ESG-CV funds to ease impacts on families and households and to develop a strategy that integrates these funds alongside emergency assistance available through the Federal Emergency Management Agency’s (FEMA’s) Public Assistance (PA) Program. 

Stan Gimont is a Senior Advisor for Community Recovery with Hagerty. Stan joined Hagerty after 32 years of service with HUD. With Hagerty, Stan provides strategic advisory support focused on HUD Programs, housing issues, and long-term community recovery. From August 2016 through July 2019, Stan served as HUD’s Deputy Assistant Secretary for Grant Programs. In this role he provided management direction and oversight for all aspects of the Community Development Block Grant (CDBG) Program, including long-term disaster recovery (CDBG-DR), the HOME Investment Partnerships Program, the National Housing Trust Fund, as well as HUD’s environmental review responsibilities. From 2017 through 2019, his leadership helped to secure $40 billion in CDBG-DR funding in response to major disasters, such as hurricanes Harvey, Irma, and Maria. As Director of HUD’s Office of Block Grant Assistance from 2008-2016, Stan managed approximately $60 billion in federal funding to assist the nation’s communities in addressing housing, development, and disaster recovery needs. Among Stan’s notable achievements as Director is the implementation of the Neighborhood Stabilization Program in response to the 2008-2010 housing crisis, oversight of CDBG-DR funding for New Jersey and New York in response to Hurricane Sandy, and management of HUD’s National Disaster Resilience Competition in 2014-2015.