Policy Update: Disaster Supplemental Funding Supports Communities Recovering from Catastrophic Disasters in 2022

On December 29, 2022, President Biden signed into law the Consolidated Appropriations Act, 2023, (Pub. L 117-328) which provides funding for the Federal government through the end of the fiscal year, September 30, 2023. This legislation includes the Disaster Supplemental Appropriation Act, 2023, which provides Federal agencies with a total of $38.175 billion in emergency Federal disaster assistance to address ongoing response and recovery needs. 

While these funds will be spread across the Federal landscape, many of the appropriations specifically reference support for damage caused by Hurricanes Fiona and Ian. Some of this funding is replenishment of fundamental disaster recovery programs, some represents predictable funding for specific agency activities, while other funding is responsive to the unique circumstances surrounding disasters in 2022. Listed below are some of the significant line items that will provide funding to states, local governments and households for recovery efforts.

  • Federal Emergency Management Agency (FEMA) – $5 billion for the Disaster Relief Fund (DRF) for major disaster declaration expenses, primarily under its Public Assistance and Individual and Household Assistance programs. Note that FEMA declared 46 major disasters in 2022. 
  • Department of Housing and Urban Development (HUD) – $3 billion for the Community Development Block Grant-Disaster Recovery (CDBG-DR) for major disasters that occurred in 2022. Using the Congressional directive to focus on “most impacted and distressed” areas, HUD will fund states, local governments, and, possibly, Indian tribes for only the most significant major disasters.   
  • United States Army Corps of Engineers (USACE) – $1.4 billion to repair damaged Corps projects, support emergency operations, fund studies and build high-priority projects (particularly in states impacted by Fiona, Ian, and Nicole).
  • Environmental Protection Agency (EPA) – $1.668 billion to address the impacts of Fiona and Ian upon water and wastewater systems and to fund response to the declared water system emergency in Jackson, MS. 
  • Department of Transportation (DOT)
    • $803 million for the Highway Emergency Relief Program. 
    • $214 million for Federal Transit Administration emergency relief expenses.
  • Department of Commerce: 
    • Economic Development Administration (EDA) – $500 million for EDA grants to communities impacted by disasters in 2021 and 2022 and an additional $618 million for EDA technology innovation grants.
    • National Oceanic and Atmospheric Administration (NOAA) – $300 million for declared fishery disasters and $507 million for marine debris removal, and repair, replacement, and acquisition of disaster-related equipment.
  • Department of Agriculture (USDA):
    • $3.7 billion for Emergency Relief Program to assist agricultural producers who suffered loss due to certain disasters in 2022.
    • $925 million for the Emergency Watershed Protection Program for rural watershed recovery activities.
  • Small Business Administration (SBA) – $858 million to service low-cost loans for homeowners and businesses in response.
  • Health and Human Services (HHS) – A total of $1.75 billion across a range of programs (Head Start, Community Health Centers, Child Care Development Block Grants, etc.) to address the impact of Fiona and Ian.
  • Department of Interior (DOI) – Total of $2.4 billion, including $1.5 billion for recovery and restoration of National Park Service facilities, including Yellowstone Nation Park which was severely impacted by flooding in 2022.

This funding will be made available through a variety of mechanisms at different points in time over the coming year(s), making it incumbent upon disaster-impacted jurisdictions to understand the opportunities presented by this funding. In some ways, this process is a continuation of the stream of Federal funding provided to governmental entities in the COVID era and, like the COVID funding, requires a thorough, thoughtful approach to leverage the opportunities presented to maximum advantage. 

Hagerty Can Help 

Over the past three years, Hagerty Consulting has developed a strong ability to assist governmental entities with Federal funds management and can pair that ability with its historic strength in working with FEMA programs to create successful disaster recovery outcomes. If your community was impacted by recent disasters, contact Hagerty to discuss what funding opportunities may be available to address your long-term recovery needs.

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Stan Gimontis a Senior Advisor for Community Recovery with Hagerty. Stan joined Hagerty after 32 years of service with HUD including serving as HUD’s Deputy Assistant Secretary for Grant Programs. With Hagerty, Stan provides strategic advisory support focused on HUD Programs, housing issues, and long-term community recovery. 

Policy Update: New FEMA Small Project Threshold Guidance and What it Means for Recovering Communities

Last year, we updated you on a seismic shift in FEMA Public Assistance (PA) regulation and policy: the Small Project Maximum (“threshold”) was increased to $1 million, effective August 3, 2022. The change was so swift that it preceded policies and guidance from FEMA to clarify what this might mean in practice. Accordingly, State, Local, Tribal, and Territorial (SLTT) governments and eligible Private Non-Profits (PNPs) have been following existing guidance in the Public Assistance Program and Policy Guide (PAPPG) and other policies created following the adoption of Simplified Procedures under Stafford Act Section 422. Our original blog post aimed to give potential applicants advice in the absence of any policies or guidance from FEMA. We encourage readers to review this earlier post, which summarizes the impetus and potential implications of this change – including both benefits and risks. 

On January 6, 2023, FEMA issued formal policy (FEMA Policy FP-104-23-001) providing further detail on how it will treat Small Projects going forward. While our previous advice largely remains the same, we have two immediate takeaways. 

FEMA might require less documentation prior to awarding funds, but applicants may be subject to additional requirements. 

With the FEMA PA program, funding is distributed from the federal government to eligible applicants (State, Tribal, and Territorial governments) who then distribute the funding to eligible recipients (local governments and certain private non-profit organizations). The new FEMA policy clarifies documentation requirements for Small Projects in a manner that is more detailed than the previous policy. For example, Appendix A outlines information and documentation that Applicants must submit with all Small Projects – requirements that are less rigorous than Large Projects. This makes sense and is in line with the Simplified Procedures concept aiming to get funding to Applicants more quickly and with less administrative burden. 

However, the new policy reiterates previous guidance that “Applicants must continue to retain all source documentation, including project eligibility records and financial records, for 3 years after the date the Recipient submits to FEMA certification of completion of the last Small Project.” This is a significant point. “Source documentation” could include the level of detail and documentation required for Large Projects (a level of documentation much more robust than what is outlined in Appendix A), which, the policy states, must be provided to FEMA “[i]f requested.” Moreover, the policy cautions that “Recipients may require documentation not otherwise required by FEMA (such as actual cost documentation for Small Projects). In such cases, the Applicant must provide the documentation to the Recipient.” Therefore, Applicants should pay close attention to Recipient requirements, particularly since Applicants are given the funding and, therefore, are ultimately responsible for managing the reimbursement process as well as any federal reporting and audit requirements. 

Application of the new FEMA policy is not retroactive – even for disasters and projects to which the updated $1 million threshold applies. 

While the $1 million threshold itself is retroactive to all major disasters and emergencies declared on or after March 13, 2020, and unobligated projects as of August 3, 2022, the new Small Projects policy, as with most FEMA policies, applies only to disaster declarations on or after its date of issuance: January 6, 2023. For example, while the updated $1 million threshold applies to both of the following scenarios, different policy and guidance applies for how certain requirements will be applied by FEMA: 

  • Scenario A: Major disasters and emergencies declared, and/ or projects obligated, between March 13, 2020, and January 5, 2023:
    • Applicable policy is either the Public Assistance Program and Policy Guide (PAPPG) Version 3.1 or PAPPG Version 4.0. 
  • Scenario B: Major disasters and emergencies declared on or after January 6, 2023: 
    • The applicable policy is the new Small Projects policy cited above: FEMA Policy: Public Assistance Simplified Procedures (FP-104-23-001). 

What’s next? 

FEMA has announced it will host several webinars from January 31 – February 3, 2023, from 3:00-4:00pm ET to explain the updated Public Assistance (PA) Simplified Procedures policy. To register for the webinars, click here. 

Stay tuned! We anticipate additional FEMA guidance and recommend that all eligible PA Recipients and Applicants continue to closely monitor these changes. Further, as updates become available, we will share any additional guidance here.

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Ari Renoni is a Deputy Director of Recovery at Hagerty and has over 13 years of professional emergency management experience working with government and international public organizations. He has a deep familiarity with federal policy, given his experience supporting FEMA projects for clients in New York, California, Puerto Rico, Texas, and Florida. 

Chris Thomas is a Deputy Director of Recovery at Hagerty and has almost two decades of experience as a leader of large, complex disaster recovery projects. He has extensive experience implementing disaster emergency plans, providing analyses of PA policy, cost recovery strategy, and supporting grants management.

The Hagerty Advantage – Our People: Tom Leatherbee and Rachel Knoblach

Here at Hagerty, we truly believe the advantage is our people. Within our Recovery division, we proudly staff a team of subject matter experts (SME’s) dedicated to helping clients navigate complex federal disaster programs and secure every available funding source. Today, we highlight two of Hagerty’s Recovery professionals supporting our American Rescue Plan Act (ARPA) team.

1. Tell us about yourself and how your career path led you to Hagerty Consulting.

Tom Leatherbee: After college, I ran several political campaigns and worked in the insurance industry. Most of my professional career has been in public administration within the City of Syracuse, NY, and the City of Del City, OK. During my 15 years with Del City, I worked in Planning, Community Development, Economic Development, and City Administration departments and led efforts to refocus all city activities through a lens of positive redevelopment. Del City is a tremendously flood-prone community, which led to my involvement with state and national stormwater organizations. This eventually led me to Hagerty.

Rachel Knoblach: I was in graduate school and working as a research assistant for the College of Criminology and Criminal Justice (CCCJ) at Florida State University (FSU) at the onset of the COVID-19 pandemic. This led to my campus closing, classes being postponed, and the undergraduate courses I was teaching transitioned online. During this time, I began to look for an opportunity to support what was mounting to be an unprecedented emergency response to a global pandemic. I took an internship with an emergency management firm supporting the COVID-19 response in my community, and in the span of six months, I assisted in the development of two COVID-19-informed planning frameworks, participated in emergency response drills, supported disaster recovery projects, and processed invoices totaling over $450 million for frontline healthcare workers. After finishing my master’s program, I reached out to a former colleague about opportunities with Hagerty Consulting — a decision that would ultimately lead to a fulfilling career with this company. 

2. What do you find most rewarding about working in the field of emergency management?

Tom Leatherbee: Emergency management is a microcosm of our society and an opportunity for creative problem-solving. In Oklahoma, I played a part in creating the nation’s first volunteer flood disaster response team, which allowed me to experience, learn, and then teach about response, recovery, mitigation, and resilience. I find it particularly rewarding when policy and politics can come together to help impacted communities rebuild in a smart, sustainable way.

In my role managing several engagements within the American Rescue Plan Act (ARPA) portfolio, I have the opportunity to prepare detailed program design work. On any given day, I support a diverse number of projects with varying goals.

Rachel Knoblach: Working in the field of Emergency Management during the COVID-19 pandemic response creates a sense of urgency and purpose. State, Local, Tribal, and Territorial (SLTT) governments have been preparing for, responding to, and recovering from wildfires, hurricanes, tornadoes, and other disasters while actively responding to the COVID-19 pandemic. Every day, I have an opportunity to help a community work through challenges created and exacerbated by COVID-19. I work closely with our clients to build programs designed to deploy ARPA funds in ways that address their community’s most pressing recovery needs. This work helps communities respond to the devastation caused by the COVID-19 pandemic, rebuild, and be better prepared on the long road to recovery.

3. How does your work as a Federal Funds Management professional support the firm’s overall mission: helping people before, during, and after disasters?

Tom Leatherbee: Federal Funds Management is an umbrella concept that includes identifying needs, prioritizing solutions, matching available funding streams, and implementing projects while focusing on effective administration and developing a robust compliance infrastructure. Effective Federal Funds Management allows a community to go beyond basic recovery efforts to seek structural and functional changes that will reduce future risk and build toward a sustainable future. Because it includes the entire funding lifecycle, from community engagement and needs assessment to program evaluation and audit, Federal Funds Management is what unites preparedness, mitigation, resilience-building, response, and recovery activities.

Rachel Knoblach: As a Federal Funds Management professional, I help our clients understand how to address their needs by pursuing these federal funding opportunities. The unprecedented funding opportunities stemming from the ARPA State and Local Fiscal Recovery Funds (SLFRF) program and the Infrastructure Investment and Jobs Act (IIJA) provides communities across the country with the resources to prepare for, respond to, and recover from disasters. These resources create opportunities for historic investments in broadband, transportation, and water infrastructure; mental health and housing interventions; and mitigation and resiliency planning. Communities can leverage the $1.2 trillion under the IIJA and their allocation under the $350 billion SLFRF program to amplify the impact of available resources on local response and recovery efforts.

4. How can communities best utilize their ARPA allocations?

Tom Leatherbee: ARPA, and particularly the SLFRF program, was created with two goals: to respond to the negative impacts of the COVID-19 pandemic and facilitate investments that would foster future resilience. Whether designing a program to respond to a negative economic impact or scoping an eligible infrastructure project, communities should prioritize long-term solutions over the temptation of short-term successes. SLFRF program funds are some of the most flexible federal dollars ever made available to communities, which underscores the need for meaningful outreach to internal and external stakeholders to identify fundamental needs within the community. SLFRF funds should work to leverage other available funding streams, including those contained in the IIJA.

Rachel Knoblach: ARPA funding is designed to help communities respond to the ongoing COVID-19 pandemic and its myriad of impacts. Governments can best utilize this opportunity by leveraging and investing in federal support from the ARPA to bridge gaps in local budgets, invest in infrastructure, and meet the needs of impacted and disproportionately impacted populations and communities. One recommended approach is to assess needs, identify resources available for each need, and prioritize funding opportunities. For example, communities interested in investing in infrastructure may use SLFRF under the revenue loss eligibility category to meet the non-federal cost share or matching requirements for a variety of programs under the IIJA.

5. What are you passionate about outside of work?

Tom Leatherbee: I have a 12-year-old who plays hockey all across North America, and I have been lucky enough to get involved as a youth hockey coach. I also have three large dogs and a small turtle who occasionally attend and contribute to project meetings.

Rachel Knoblach: On Friday nights, my home office transforms into a stained glass studio. I spend my mornings and cloudy days creating beautiful suncatchers and plant stakes. When I am not working in my studio, I enjoy walking through the woods and along the water in search of fossils, geodes, pottery, and sea glass.

To learn more about Hagerty’s Federal Funds Management services, visit our service line page here.


Tom Leatherbee is a public administrator with over 15 years of experience in planning, administration, and regulatory compliance matters. As a Senior Managing Associate at Hagerty, he has provided significant support for recovery and investment projects stemming from ARPA efforts in numerous county programs. 

Rachel Knoblach is an associate with diverse leadership experience across a variety of fields. Ms. Knoblach has contributed to a diverse portfolio of ARPA projects, and she has supported work related to ARPA program design, administration, compliance, and reporting. Ms. Knoblach has advised policymakers and industry leaders on strategic approaches from utilizing federal funds to complement existing priorities to addressing community recovery needs.

Extension of the 100% Federal Cost Share for COVID-19 FEMA Public Assistance Funding

On March 1, 2022, President Biden directed the Federal Emergency Management Agency (FEMA) Administrator Deanne Criswell to extend the 100 percent federal cost share for Public Assistance (PA) awarded under COVID-19 Stafford Act declarations.

This means FEMA will fully fund PA-eligible emergency work to combat the pandemic performed between January 20, 2020 and July 1, 2022. A subsequent FEMA Advisory announcing this extension indicated that after July 1, 2022, the federal cost share will be reduced to 90 percent, which is still higher than the statutory minimum 75 percent.

What is a federal cost share?

FEMA provides PA funding to eligible state, local, tribal, and territorial (SLTT) governments and private nonprofits (PNPs) on a reimbursement basis via a cost share. Typically, the federal share is 75 percent, and the local share is 25 percent, unless there is catastrophic damage. In this scenario, if a local government or nonprofit hospital performs PA-eligible work that costs $100,000, FEMA would fund $75,000. 100 percent federal cost shares are rare. This latest extension adds to the unprecedented nature of COVID-19 and federal efforts to support communities in response and recovery from the pandemic.

How does the federal cost share extension apply to other PA deadlines?

The deadline to complete eligible COVID-19 emergency work remains open “until further notice.” FEMA has stipulated that it will provide at least 30 days’ notice prior to establishing a deadline; however, it is not yet clear if FEMA will tie this deadline to the United States (US) Health and Human Services (HHS) Public Health Emergency (PHE), which was renewed effective January 16, 2022, or use another basis. Therefore, while the 100 percent federal cost share is extended through July 1, 2022, Applicants should monitor FEMA guidance on the deadline to complete eligible work, which is not dictated by the federal cost share.

Is there a catch?

Yes, FEMA PA funding is challenging to obtain and retain. Regulation and policy that underpin the program are complex, with heavy documentation requirements. Moreover, FEMA issued several forms of disaster-specific guidance and policy for COVID-19 declarations, which adds to the complexity.

Therefore, the extension to the 100 percent federal cost share does not automatically mean FEMA will fund all COVID-19 work. Funding is based on activities supported by policy that Applicants can demonstrate were necessary and reasonable based on prevailing circumstances. As such, SLTTs and PNPs submitting PA claims should be ready to explain how existing or projected needs, coupled with public health guidance, caused them to incur costs related to specific COVID-19 work.

Wondering how to pursue this federal funding? Here are a few important tips,

  • Submit a Request for Public Assistance (RPA) if you have not already.
  • Familiarize yourself with PA policy, COVID-19 disaster-specific guidance and the COVID-19 Streamlined Project Application.
  • Track and document all potentially PA-eligible work and costs.
  • Separate work and costs performed after July 1, 2022, since FEMA will likely require new project applications for work under the reduced 90 percent federal cost share.
  • Be prepared to demonstrate that all costs were necessary and reasonable.
  • Justify all COVID-19 work in the context of applicable federal, state and/or local public health guidance.

Ari Renoni is a Deputy Director of Recovery Programs with more than a decade of experience working with government and international public organizations with emergency management programs and policy. He has a deep familiarity with federal policy, given his experience supporting FEMA projects for clients in New York, California, Puerto Rico, Texas, and Florida.

Neetika Prabhakar Cox is an Independent Management Consultant with Hagerty Consulting. With nearly two decades of experience supporting emergency management programs and FEMA projects, she is a subject-matter expert as it relates to the intersection of federal policy and business analytics with public sector operations.

Hagerty can help! Contact us today to learn more about FEMA PA and other federal recovery programs.

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A January of COVID-19 Like No Other, but Hope is on the Horizon

Nearly three years ago, no one could have predicted that we would soon be in the midst of the public health crisis of our lifetime; 1.35 million daily cases, 136,640 in the hospital, and 1,700 dying from COVID-19 related illness per day. As new individuals get the Omicron variant related symptoms including: a scratchy throat, muscle aches, lower back pain, fatigue, runny nose, nausea, and a headache they find themselves unable to get a doctor’s appointment and unable to find rapid viral antigen tests or the gold standard PCR test to determine if they have the COVID-19 virus. The United States (US) Public Health System has reached a breaking point and is on the brink. Crisis of Care Standards are being implemented in several states and others have them at the ready. This means decisions are being made as to who gets certain levels of care and treatment and who does not. Emergency Departments are temporarily closing and critical services like substance abuse day treatment programs or surgeries are being canceled. Hospital beds are full in some areas and there are not enough healthcare workers to care for patients in 25% of hospitals across the country. This equates to 1 out of every 4 hospitals in the US reporting critical staffing shortages to the US Department of Health and Human Services (HHS). Another 100 US hospitals anticipate being in a staffing crisis within the week.

Hospital expenses per patient are up over 26% from pre-pandemic levels as a result of premiums being paid to try and procure temporary agency nurses to staff positions vacated by burnout, retirement, and/or caregivers becoming sick with COVID-19 themselves. In many states, finding doctors and nurses has become so difficult that what would ordinarily be a violation of basic infection control principles are being put aside as staff who have COVID-19 themselves are being asked to come to work sick in protective gear to care for patients. The HHS, Federal Emergency Management Agency (FEMA), and National Guard are all deployed to help with the critical hospital staffing crisis. Funding is available primarily through FEMA Public Assistance (PA), HHS Provider Relief Fund and other programs. Despite all of this, the US’s healthcare system is falling behind.

UnSplash: Mufid Majnun

While the next four to six weeks will be tough, hope is on the way and there is reason to be optimistic about better times ahead in the very near future. Public health experts who have looked at data and trends from recent Omicron outbreaks in South Africa and England show that Omicron cases are likely to peak in the US starting this week in parts of the country through the end of January. By February, we should begin to return to a level of virus in our communities that we can safely live with, meaning our hospitals will not be overwhelmed and cases and deaths per day will decrease.

The tide will not turn on its own; it will take collective effort us to return to the “new normal” way of living with COVID-19 that the world began adjusting to in the fall of 2021. For us to return to this reality – one that we will be living with for many years to come – we must try to be as safe and respectful of our health and the health of others by:

  1. Being thoughtful about your daily interactions with others. The kind of activities you use to do over the summer or fall of 2021 such as gathering with vaccinated family and friends and dining indoors are now likely to expose you to the contagious strain of Omicron. According to the most recent Johns Hopkins Coronavirus Resource Data, 1 out of every 4 people tested each day have COVID-19. This means the likelihood of someone having COVID-19 in an indoor environment with greater than 4 people is high. Choose activities that you must do such as school, work, doctors’ appointments or safe gatherings to balance your mental health and well-being. This is only for a short period of time.
  2. Wearing a high-quality fitted mask. The Centers for Disease Control and Prevention (CDC) is expected to change its guidance by recommending the wearing of N-95 or KN95 masks only. This is because we now have a good supply of these masks and given the contagiousness of the new variants which require well-fitting high filtration masks versus cloth masks. If everyone wore a N95 or KN95 mask in public, it is likely we could end this pandemic and spread of virus quickly.
  3. Getting vaccinated and boosted. Vaccines are extremely protective against hospitalizations and death from COVID-19. 60-75% of all current COVID-19 Omicron variant hospitalizations are in unvaccinated individuals. The remainder are either vaccinated but immunocompromised, have underlying conditions or were admitted for another reason and then test positive for COVID-19.
  4. Testing frequently. Test at the onset of any symptom or prior to getting together with others for a family gathering or event. Testing as close to the event as possible is important as rapid antigen tests are likely to only pick up higher viral loads when you are most contagious.

Moreover, as a nation, we must start now to learn to live with COVID-19 like we do other viruses. We must start to fund programs and initiatives to mitigate the effects of future virus surges and pandemics as well as prevent our hospitals from ever being overwhelmed in the future by:

  1. Prioritizing federal funding for Public Health Preparedness. Hospitals are hemorrhaging money implementing emergency measures to take care of patients. 20 years ago, following the September 11th attacks, the federal government created the Hospital Preparedness Program (HPP). Funding must be increased and tied to specific standardized preparedness deliverables that will strengthen our public health preparedness for the future.
  2. Creating standby critical care bed and staff capacity in our hospitals. Hospital bed capacity has been shrinking across the country for decades as more and more care shifts to outpatient settings and healthcare organizations look for improved efficiency in the cost of care. We must find ways to have beds and public health doctors and nurses at the ready to scale up in times of crisis. Easier said than done, but this is a challenge that we must get creative about.
  3. Enhance standardized seasonal public health measures and messaging. The US has arguably the greatest healthcare system in the world with leading experts and scientists and doctors. We must find ways develop standardized national public health measures and messaging that are easy for all to understand and subsequently follow. This will be essential for mitigating future virus outbreaks as we balance maintaining a fully functioning society with reasonable public health measures such as hygiene, masking, ventilation, and vaccination guidelines for all.

Jeff Bokser is Hagerty Consulting’s Vice President of Healthcare Programs with strategic expertise in all aspects of healthcare operations, finance, crisis management, and recovery. Jeff has over 20 years of experience as a senior leader at NewYork-Presbyterian and Yale New Haven Health. He advanced performance and increased revenue in clinical and nonclinical settings and led innovation in daily operations and care delivery processes. Jeff is nationally recognized in the healthcare sector for his transformational leadership in the areas of emergency and crisis management; security and safety; pandemic and surge planning; and business continuity. Jeff was the system-level executive responsible for Emergency Medical Services, Emergency Management, Business Continuity, Crisis Management, Safety, Security, and Regulatory Compliance for the entire continuum of the NewYork-Presbyterian Hospital & Healthcare System enterprise. He served as Incident Commander guiding 40,000+ employees through numerous internal and external emergency response and recovery operations including Hurricane Sandy, Ebola, H1N1, and 9/11.

Policy Update: Equity Challenges with FEMA’s New Consensus-Based Codes and Standards Policy

With passage of the 2018 Disaster Recovery Reform Act (DRRA), the new consensus-based codes and standards policy has brought substantive change to the Federal Emergency Management Agency (FEMA) Public Assistance (PA) grant program. Our previous blog discusses nuances of this new policy and while it offers an opportunity by allowing the communities to build back to more resiliently, it poses challenges and risk.

About the Policy

According to the consensus-based codes and standards policy, FEMA will fund PA projects to comply with the latest published editions of relevant consensus-based codes, specifications, and standards. The policy requires incorporating a holistic hazard approach to determine minimum acceptable criteria for the design, construction, and maintenance of residential structures and facilities that may be eligible for FEMA PA. Additionally, the project must be designed for the purposes of protecting the health, safety, and general welfare of a facility’s users against disasters.

This new policy amends FEMA’s previous codes and standards criteria which limited funding only to restore a damaged facility per the codes and standards locally adopted at the time of the disaster. However, per this new policy, FEMA now requires applicants to adhere to numerous published codes, specifications, and standards as listed within Appendix A of the new policy. The challenge is, these required codes, standards, and specifications may or may not be locally adopted. Moreover, applicants are now responsible for identifying, analyzing, justifying, and complying with applicable codes when restoring damaged facilities even if they have no experience building to such standards. FEMA’s previous codes and standards policy limited funding to only cover codes, specifications, and standards that were locally adopted and consistently implemented; however, now, FEMA will fund upgrades beyond what is locally adopted, provided they restore damaged facilities to be more resilient to future hazards.

Potential Implementation Challenges in Puerto Rico

On September 20, 2017, Hurricane Maria made landfall in Puerto Rico, and it was followed by a major disaster declaration. Since this incident declaration was after August 1, 2017 and before November 6, 2019, eligible applicants in Puerto Rico were eligible to request to opt-in to the interim policy and had to navigate the dilemma of deciding to do so or not. Ultimately, many communities in Puerto Rico declined the opportunity to opt-in to the new policy because the risks seemed to outweigh the rewards. Specifically, the rigor of the code analysis, availability of contractors, and FEMA’s requirement to certify that all restoration adhered to the highest resilience standards meant that failing to comply would jeopardize FEMA funding. As a result, many communities opted out, foregoing potential funding but protecting themselves pitfalls of trying to comply with a new, untested policy.

Sub-applicant’s experience on the island highlighted the risk and reward calculation of choosing to opt-in to a more rigorous policy with additional compliance requirements, administrative burden, and potential risk to PA funding. Factors that led to opt-outs in Puerto Rico are telling – and foreboding – because now, for disasters declared on or after December 20, 2019, FEMA requires recovering communities to comply with this new policy.

The FEMA guidance emphasizes that the burden of code identification and application is on each applicant and sub-applicant. Based on our experience, this will force each individual community to conduct a comprehensive code analysis, along with additional cost for architectural and/ or engineering services required to perform such an analysis. Furthermore, codes and standards are typically regularly updated, and updates are often prompted by the lessons learned during a disaster event. After the devastating hurricanes of the 2017 season impacted Puerto Rico, the building codes were updated to Puerto Rico Codes 2018 to include new wind speed and seismic category maps, and to implement more strict design requirements across the island. While it is positive that local codes were updated, it does further complicate compliance with FEMA’s new policy going forward.

While the process begins with code analysis, another risk is the availability of trained contractors and compliance certifications. Due to large variances in codes, finalizing the performance specification for a project will prove to be a challenge for communities across the nation. The guidance also specifies that when a code or specification offers discretion in design, FEMA will fund the least expensive option and it is up to the applicant to show how a more expensive alternative would provide greater hazard risk reduction. This uncertainty and lack of clarity in guidance poses further risks as a community looks at the life cycle of the project and potential pitfalls that could result in challenges with cost eligibility.

New Codes and Standards Policy and Equity

When FEMA funds more rigorous codes and standards than what is locally adopted, it makes damaged facilities more resilient to future events; however, going forward, implementation challenges will not be unique to Puerto Rico. For underserved communities, which may lack the resources or experience analyzing complex FEMA policy, this can create inequitable outcomes – something FEMA recently sought to address. While we believe that this policy can improve community resilience, it poses enormous implementation and equity issues and may result in otherwise eligible communities being unable to obtain funding or begin the grant process.

Greater technical assistance opportunities, provided by FEMA, could reduce these burdens, and result in more equitable program implementation. For example, instead of putting the onus of analyzing, identifying, implementing, complying with applicable codes on local communities, FEMA could provide technical assistance and be jointly responsible. This would support underserved communities and incentivize FEMA to support – rather than only enforce – compliance.

The Way Forward

While this new policy offers a unique opportunity to bolster community’s resilience to standards previously not funded by FEMA, it does pose significant challenges. Based on our experience, despite the need to build back more resiliently, many applicants have preferred not to opt-in; however, now applicants recovering from disasters declared on or after December 20, 2019, have no choice – they must comply. This will certainly make FEMA PA program compliance more challenging especially for communities with scarce resources and little disaster experience.

Fortunately, the work associated with code identification, implementation and compliance are eligible costs under the FEMA PA program. Therefore, while there are challenges, we believe this expansion of FEMA policy can work to achieve the stated goals of promoting resiliency and risk reduction; protecting lives and property; and supporting the efficient use of federal dollars, if recovering communities are supported by FEMA through technical assistance.

Hagerty Can Help

The disaster recovery process can be complicated, but it is eased with excellent advice and assistance. Hagerty professionals understand and know the rules, and we have years of experience advocating for and negotiating on behalf of our clients. The results of our work — the billions of dollars we have helped secure for our clients — is proof of our success and expertise in working with government programs. Contact us to discuss how we can help you meet your preparedness, response, and recovery needs.


Savita Goel serves as Hagerty’s Deputy Director of Infrastructure Resilience. Savita is an experienced engineer with more than two decades of experience in management, business administration, and recovery-related projects. She is also adept at assisting firms to assess risk. Savita’s storied engineering background gives her the ability to head teams including management and hands-on engineers, often with projects that deal in millions of dollars of federal grant management and budgeting. Savita is also experienced in assessing risks posed to large urban areas from terrorist threats.

Ari Renoni is Hagerty’s Deputy Director of Recovery and has 12 years of experience working with government and international public organizations. He has a deep familiarity with federal policy, given his experience supporting FEMA projects for clients in New York, California, Puerto Rico, Texas, and Florida.

Sage Hart is a Managing Associate in Hagerty’s Recovery Division, supporting various natural disaster recovery and COVID-19 response projects in New York, Puerto Rico, California, and other areas of the country. His experience and expertise include program management, policy analysis, finance, and data analytics. Sage holds a master’s degree in International Relations from the Maxwell School of Citizenship and Public Affairs and a Bachelor’s in finance from the Whitman School of Management at Syracuse University.

Policy Update: FEMA Public Assistance Grant Program – Consensus-Based Codes

With passage of the 2018 Disaster Recovery Reform Act (DRRA), FEMA will now pay to restore damaged facilities and make them more resilient beyond locally adopted codes and standards. While this new opportunity allows communities to build back better and protect themselves against future hazards, it also poses risks. State, local, tribal, and territorial (SLTT) governments and private nonprofits (PNPs) can access new funding – but to do so is a complex process and proper compliance is required. During this hurricane and wildfire season, SLTTs and PNPs should familiarize themselves with these new requirements to take full advantage of this federal funding.

What changed?

On November 6, 2019, FEMA issued an interim policy titled Consensus-Based Codes, Specifications and Standards for Public Assistance (Policy). This Policy requires FEMA to fund PA projects in conformity with the latest published editions of relevant consensus-based codes, specifications, and standards – incorporating the latest hazard-resistant design and establishing minimum acceptable criteria for the design, construction, and maintenance of residential structures and facilities that may be eligible for this assistance. Additionally, the project must be designed for the purposes of protecting the health, safety, and general welfare of a facility’s users against disasters. FEMA amended their previous codes and standards criteria and is now requiring applicants to adhere to numerous published codes, specifications, and standards which are listed within the policy document as Appendix A. FEMA’s previous codes and standards policy limited funding to only cover codes, specifications, and standards that were locally adopted and consistently implemented; however, now, FEMA will fund upgrades beyond what is locally adopted, provided they restore damaged facilities to be more resilient to future hazards.

On March 29, 2021, to support its new 2019 policy, FEMA released the new FEMA Policy and Building Code Decision Tree: Navigating Building Damage within the Public Assistance Grant Program to guide FEMA staff, FEMA PA grant applicants or their representatives, hazard mitigation officers, and others through the process of making determinations and decisions related to substantial structural damage and substantial damage.

FEMA Policy and Building Code Decision Tree: Source

This new Policy is applicable to applicants for disasters that occurred after November 6th, 2019, or applicants who “opt-in” for disasters that occurred prior to that date. The key aspects of the new FEMA Policy relevant to an applicant are:

  1. Not Optional – Compliance with the new codes, specifications, and standards will not be optional for an applicant for future disaster permanent work projects funded by FEMA Public Assistance. Non-compliance with the applicable code, specifications, and standards will result in denial of project eligibility or funding deobligation by FEMA unless the applicant is able to successfully argue to FEMA that the code, specification, or standard is “technically infeasible,” creates an “extraordinary burden” on the City, or is “inappropriate” to the facility “such as adversely affecting a facility that has been listed on the National Register of Historic Places.”
  2. Specific to Certain Types of Facilities – The Policy is specific only to buildings, electric power, roads, bridges, potable water, and wastewater facilities. Therefore, shoreline protection, parks, hardscapes, etc. will not be affected by this policy and will be subject to the previous FEMA policy in which codes and standards are eligible to be funded by FEMA, i.e., codes and standards formally adopted prior to the disaster by the applicant and practiced without exception.
  3. Proof of Compliance – Upon completion of all projects, proof of compliance – with all applicable codes, specifications, and standards – must be provided by the applicant to FEMA. FEMA will accept written certifications by registered engineers, design professionals or other qualified individuals as proof of compliance. A likely standard practice would be for the designer of record (engineer or architect) or Department of Buildings (DOB) plan examiner to create these certifications. The designers of record are already responsible for normal applicable code compliances, so the certification would be consistent with their normal duties although this creates abnormal additional requirements for the designers of record and additional fees might be required.
  4. Direct Relationship to Disaster Damages – The Policy limits which codes, specification, and standards requirements are eligible for FEMA reimbursement. The Policy language describes that there must be a “direct relationship between the upgrade work and eligible damage.” This language is vague but can be interpreted as only codes, specifications, and standards of a disaster damaged building system will be reimbursed by FEMA. It should also be noted that this limitation in funding could create an unfunded mandate scenario for FEMA PA applicants. Since the Policy’s proof of compliance requirement does not distinguish between those codes, specifications, and standards related to disaster damages (funded) and those that are not related to disaster damages (not funded), it can be assumed that the proof of compliance could still be required, thereby requiring that certain non-FEMA funded codes, standards and specifications are being met at the SLTT level.

Way Forward

With hurricane season upon us, SLTTs and PNPs will benefit from preparing for the additional complexity this new FEMA Policy creates. Hagerty recommends taking the following steps before disaster strikes:

  • Code Comparison – Perform a comparative analysis of the FEMA required codes, specification, and standards to the current, locally adopted applicable building code and create a document that details significant, new requirements. Since the consensus-based codes as well as adopted codes by SLTTs are regularly updated, this code comparison review will also need to be revisited regularly.
  • Code Compliance Certification Process – Develop a code, specification, and standard certification process to follow for all future PA-funded disaster recovery projects that identifies applicable consensus-based codes, specifications, and standards. This process should detail which party creates the certification, how and in which phase of the project it is created. Additionally, this process can also include standard forms, design contract language to include the additional certification scope of work, procurement instructions, etc.

Hagerty Can Help

The disaster recovery process can be complicated but it is eased with excellent advice and assistance. Hagerty professionals understand and know the rules, and we have years of experience advocating for and negotiating on behalf of our clients. The results of our work — the billions of dollars we have helped secure for our clients — is proof of our success and expertise in working with government programs. Contact us to discuss how we can help you meet your preparedness, response, and recovery needs.


Savita Goel serves as Hagerty’s Deputy Director of Infrastructure Resilience. Savita is an experienced engineer with more than two decades of experience in management, business administration, and recovery-related projects. She is also adept at assisting firms to assess risk. Savita’s storied engineering background gives her the ability to head teams including management and hands-on engineers, often with projects that deal in millions of dollars of federal grant management and budgeting. Savita is also experienced in assessing risks posed to large urban areas from terrorist threats.

Ari Renoni is Hagerty’s Deputy Director of Recovery and has 12 years of experience working with government and international public organizations. He has a deep familiarity with federal policy, given his experience supporting FEMA projects for clients in New York, California, Puerto Rico, Texas, and Florida.

The Hagerty Advantage: Our People – John Hageman, Senior Manager

Tell us about yourself and how your career path led you to Hagerty Consulting.

After serving as Chief of Staff for the City of Detroit’s Office of the Chief Financial Officer and helping Detroit recover post-bankruptcy, I became more convinced that times of crisis can create unique opportunities for the government to reform itself and improve outcomes for its constituents. Hagerty Consulting’s work enables me to help all levels of government and communities not only when they are most in need, but also when the opportunities are greatest.

What do you find most rewarding about public service?

At its core, public service focuses on improving people’s lives and helping solve some of our largest challenges. Being able to help governments organize and operate better, and then seeing how that helps people in their daily lives, is what I find most rewarding about public service.

Given your experience with financial and change management, what fiscal issues should local governments and communities be paying close attention to as they continue to recover from COVID-19?

In my experience, the most impactful fiscal and economic recoveries are strategic and comprehensive. They re-imagine how services, programs, and investments are delivered in the short- and long-term.

Here are a few considerations that local governments should think about:

  • Evaluate each funding source and determine the best approach to leverage available funds and maximize their impact. Consider centralizing grants management, as Detroit did, to establish a government-wide approach and help drive recovery.
  • Identify eligible Federal fund recipients, including American Rescue Plan recipients, in your community and collaborate to the extent possible. This will help create a community-wide approach, speed up recovery, and may create cost-savings.
  • Prioritize using one-time, Federal funding for one-time expenditures. Doing otherwise may create a structurally imbalanced budget. Plan for any ongoing expenses created by one-time expenditures and conduct long-term financial planning to understand how decisions today may impact the community in the future.

FUN FACTS

What are you passionate about outside of work?

I enjoy reading, spending time outside, and traveling. I also enjoy wine and learning about wine’s impact on a place’s culture and identity.

What author do you admire most and why?

A specific author is tough, but I enjoy memoirs and other non-fiction. I am currently reading “The Overstory” by Richard Powers.


John Hageman is a Senior Manager in Hagerty’s Recovery Division. Prior to joining Hagerty, John was Chief of Staff for the City of Detroit’s Office of the Chief Financial Officer, helping Detroit recover post-bankruptcy. He also has a background in management consulting with a focus in strategic project management, public sector finance and administration, and restructuring all of which he employed working with the Financial Oversight and Management Board for Puerto Rico (FOMB) as well as during his tenure with the City of Detroit. 

One Year Later: How a Global Pandemic Has Changed Our Lives and What Comes Next

THURSDAY, MARCH 11, 2021 AS OF 4:30 PM EST

One year ago today, the World Health Organization (WHO) declared the novel coronavirus (COVID-19) a pandemic. At that time, worldwide, over 4,600 people were confirmed dead as a result of COVID-19 and approximately 125,000 people were confirmed to be infected with the virus. In the organization’s message, the WHO proclaimed COVID-19 was a global pandemic and encouraged aggressive action from all nations to combat the virus. The world went into lockdown, with countries closing off borders, flights being grounded, and major cities enforcing stay-at-home orders. 

To date, there have been over 118.2 million confirmed COVID-19 cases worldwide, with the global death toll reaching approximately 2.6 million this week. This coming Saturday, March 13, 2021, marks the one-year anniversary since the United States (US) declared the novel coronavirus (COVID-19) a national emergency, two days after the WHO pandemic declaration.

HOW THE IMPACTS OF COVID-19 CHANGED THE WORLD

Essential workers in fields ranging from trash collection, food services, transportation, and medicine have been working on the front lines since before the pandemic declaration. Dr. Angela Chen, an ER physician at The Mount Sinai Hospital and the first doctor to diagnose New York City’s first confirmed COVID-19 case on March 1, 2020, spoke with NPR on the COVID-19 wave that decimated the City. Frontline healthcare workers initially struggled to create wards dedicated for COVID-19 patients to control the spread of a then-unknown disease. “The amount of tragedy and death that we saw — nothing in my training prepared me for it,” Chen said.

On March 11, 2020, the World Health Organization officially tweeted that COVID-19 is a global pandemic: Twitter.com

Government agencies were among the first to shut down at the onset of the pandemic. On March 12, 2020, The Associated Press (AP) reported Congress closed the US Capitol, House, and Senate office buildings to the public, with an initial reopening date of April 1, 2020. California was one of the first states to enact stay-at-home orders, with The New York Times reporting that Alameda, Contra Costa, Marin, San Francisco, San Mateo, Santa Clara and Santa Cruz counties issued a three-week shelter-at-home order on March 16, 2020. California Governor Gavin Newsom called for the closure of restaurants and bars, and banned visits to hospitals and nursing homes unless in the case of severe circumstances, while New York Governor Andrew Cuomo ordered all nonessential businesses to close on March 20, 2020.

The US economy struggled, and still continues to struggle, under the burden of unemployment and recession. According to the International Monetary Fund, US residents out of work reached an annual rate of 8.9 percent. The Organisation for Economic Co-operation and Development (OECD) estimated COVID-19 resulted in a 60 percent decline in international tourism in 2020, with a potential to decline up to 80 percent when all of the data for 2020 were aggregated.

Veronica Benavides: Unsplash

NBC’s WKYC-3 in Cleveland, Ohio, provided a timeline of how sports and world events were canceled, starting on March 11, 2020, when a game between the Utah Jazz and Oklahoma City Thunder was postponed halfway through the game after Jazz Center Rudy Gobert was revealed to have tested positive for the virus. The following day, the NHL announced a delay to the season, while college conferences throughout the US canceled NCAA basketball tournaments. By March 24, the International Olympic Committee (IOC) postponed the 2020 Summer Olympics in Tokyo, Japan until July 23, 2021. Wimbledon had been scheduled for June 29 to July 12, 2020, but tournament organizers declared the event canceled for the duration of 2020 – the first cancelation for the event since World War II, according to The New York Times. While countries and states were placed in lockdown, there were still those who needed to continue their work, risking their health and safety in service to others. 

Today, the number of Americans who know someone deceased from COVID-19 is increasing. According to the Axios-Ipsos Coronavirus Index, 34 percent, or roughly one-in-three Americans, knows someone who has died as a result of the virus. The past year has created unprecedented challenges for every industry, across every avenue of the US’ society, yet the medical community’s global efforts have helped to limit the spread of the virus and provide respite for long-term recovery.

THE CURRENT STATE OF COVID-19 AND WHAT THE FUTURE HOLDS

Shortly after the 2021 new year, vaccination efforts increased across the US. As of today, approximately 18.8 percent of the US population has received their first dose of the vaccine, and 9.8 percent have gotten their second dose. According to the CDC, the three pharmaceutical companies with emergency use authorization (EUA) to produce the vaccine include Pfizer-BioNTech, Moderna, and Johnson & Johnson. Even more companies and vaccinations, such as AstraZeneca and Novavax, are going through late-stage trials to be approved for distribution. Daily infection rates in the US have been steadily trending downwards since mid-January of this year. 

Many individuals have started to look towards a brighter future, which may not be as far off as it seemed just last year. Today, President Biden signed a $1.9 trillion stimulus package into law, which will provide relief for thousands of Americans including much needed federal funding for schools and higher educational institutions; small businesses; tribal, state, and local governments; and more. 

The one-year anniversary of an unprecedented global event is a memorial to the lives that have been lost, tested, and derailed. The sacrifices and work by so many people on the front lines and behind the scenes is a testament to our nation’s strength. As we move forward, may we take the lessons learned to prepare and protect the world from ever experiencing a pandemic on this level again.


Joely Bertram is an Associate in the Preparedness Division working out of Hagerty’s office in Washington, D.C. 

Molly Harris  is an Associate at Hagerty who works within the Communication and Operations Teams.

Ruth Anne Holiday is a Managing Associate at Hagerty, supporting both the Preparedness and Recovery Divisions.

Sarah Herchenbach is a Marketing Associate at Hagerty and leads the Situational Status Blog Team.

Risks and Rewards: Examining the Benefits and Challenges Associated with the American Rescue Plan and How State and Local Governments Can Address Them

The Biden Administration’s $1.9 trillion American Rescue Plan (ARP) reignited the debate on how federal funding should be put to work to help our nation’s continued response to and recovery from the COVID-19 pandemic –  minimum wage, direct payments to citizens, and other issues continue to be discussed. Earlier this afternoon, the House passed the Senate-approved version of the American Rescue Plan Act of 2021 (ARPA), sending the legislation to President Biden’s desk for signature which he is expected to do this Friday, March 12. If enacted, the ARPA will become one of the largest stimulus packages in US history.

During recent congressional debates, a critical sticking point was providing another round of relief funding directly to state and local governments. Under the ARPA, $350 billion will be made available to state and local government across the country to address unmet needs driven by the economic impacts of COVID-19.  Many have analyzed the data which paints varying pictures of the current economic situation at the state and local level:

  • A recent JP Morgan Report found that there was an average decline of 0.12 percent in state revenue in calendar year 2020, while 21 states saw positive revenue growth compared with 2019.
  • Additionally, based on finance data from the US Census Bureau and recent unemployment projections from the Congressional Budget Office, the National League of Cities estimates —that cities will lose up to 21.6 percent of their revenue this year – representing up to $134 billion in losses this year alone and approximately $360 billion in losses over the next three years.
  • Conversely, The Tax Policy Center forecast for state personal income tax revenue collections calls for 3.3 percent growth for fiscal year 2021, which is larger than the 2.4 percent projected growth estimated for fiscal year 2020. At the same time, median state-level forecasts for corporate income tax revenue collections showing less than 0.1 percent growth for fiscal year 2021.

While the depth and magnitude of the pandemic’s economic impact can be debated, state and local governments continue to balance budgets while facing continued economic recovery challenges because of COVID-19. Moreover, it can be argued that some of the longer-term impacts from the pandemic have yet to be determined.  Thus, while the calls for data driven funding are warranted, a collective effort to support the economy as the pandemic continues seems necessary.

Administering ARPA Funds: Turning Current Risks into Long-term Rewards

Many jurisdictions remain focused on pandemic response efforts including testing, contact tracing, vaccination administration, healthcare, etc.  Additionally, many are also navigating the changing and complex cost recovery operations associated with previously available funding from the Federal Emergency Management Agency (FEMA), the Emergency Rental Assistance Program (ERAP), the Coronavirus Relief Fund (CRF), and more. While the ARPA creates additional opportunities for state and local governments, the management and compliance requirements associated with it will also place additional burden on recipients of its funding.

At Hagerty, our experience has shown that there are both short- and long-term strategies necessary for the strategic use of ARPA funds. Some state and local governments are familiar with the fact that federal disaster programs are often reimbursable in nature – the state and local government expending their resources on the front-end to be reimbursed for eligible expenses after the fact. However, ARPA funding will be different in that it is a very large and flexible pot of money headed directly into the hands of governments nationwide.  Therefore, to effectively administer this aid and help communities recover, state and local governments must have a strategic plan to expend these funds.

As governments consider their plans, we offer the following framework to address the unmet needs driven by the pandemic:

Throughout the pandemic, Hagerty has supported state and local governments in their response to and recovery from COVID-19. Based on this experience, we offer some deliberate solutions communities can implement with this additional federal funding.

Provide Equitable Access to the Digital World. If COVID-19 has taught us one thing, digital connectivity via the Internet is more important than ever. Careers, healthcare, education, and more all went virtual. This was all based on the assumption that internet connectivity exists for all; yet, unfortunately, that assumption is wrong.  Populations all over the US cannot get regular access to the internet because it is either unaffordable or unavailable. Therefore, it is important to think of connectivity options to enable reliable internet access.

Foster Workforce Development. Helping our clients nationwide, we have certainly noticed the disparity in how the pandemic has impacted governments. For example, below we compare the economic diversification of some geographically similar states in comparison with GDP and projected revenue loss.

While each of these state’s possess diverse economies, we observe the states with a higher percentage of Gross Domestic Product (GDP) in the manufacturing space faring better throughout the pandemic. While surprising, given the in-person nature of the manufacturing industry, the resilience of that space has helped NC, OR and PA to either limiting loss or in two cases achieve growth in COVID-19.  Thus, each state and local government should consider a similar analysis to determine the pandemic’s impact on their economy as well as how equitable development can occur through workforce training.   Dedicated training to grow the workforce in resilient industries while fostering economic expansion will be critical for governments to withstand the impacts of a future pandemic event.

Provide Affordable Housing. Time and time again, we see housing being a critical component of any recovery following a disaster and this is no different. Last spring, we observed many governments quickly pivoting to address housing issues exacerbated by the pandemic. Many of these programs were established in support of disadvantaged, vulnerable populations, such as retrofitting homeless shelters for social distancing which caused space constraints across the country requiring new solutions as well as rental assistance programs to enable renters and landlords to sustain while they navigated the pandemic. Simultaneously, the rental market has seen mixed results and while there has been a surge in housing prices, home ownership will continue to be challenging going forward. To reach full recovery, state and local governments must be diligent to provide housing opportunities for all populations within their communities.

Develop an Incubator Mentality. In November 2020, Lake Research Partners conducted a study for Small Business Majority polling 500 US small, minority business owners (with oversamples of Black, Latino and Asian American/Pacific Islander) on how they navigated the first round of federal relief funding associated with the COVID-19 pandemic. According to this study, 18% of Black or Latinx businesses surveyed plan to close over the next 3 months. Thus, while February 2021 unemployment data is showing improvement, the cascading impact of COVID may still be working through the employment market.

To account for this attrition and support local entrepreneurs, small business incubators should be considered. Incubators are designed to help startup and small businesses grow and succeed by providing free or low-cost workspace, mentorship, expertise, access to investors, and in some cases, working capital in the form of a loan. According to a 2010 Senate Hearing, in 2005 alone, small business incubators assisted 27,000 start-up companies that provided full-time employment for over 100,000 Americans and generated $17 billion in revenue.  To develop a sustainable long-term tax base, a thriving economy, and address future impacts in the labor market, small business incubators could be vital resources for more than 30 million businesses across the country.

Next Steps

Expending this additional federal funding will be no easy task for state and Local governments. Putting the $350 billion into context, it represents 101 times the FY 2021 Housing and Community Development’s Community Development Block Grant (CDBG) program funding level of $3.45 billion and with a three-year window to expend allocated funds.  Jurisdictions need to think carefully about how to expend these funds with a data-driven approach being paramount to maximize the funding’s impact. Moreover, as new federal programs and policy changes continue to be announced almost daily, there are many factors and priorities to consider; however, planning for and organizing your cost recovery now will lead to more resilient outcomes for your community and its residents in the future.


Matt Hochstein is Hagerty’s Vice President of Client Services. He has nearly two decades of management consulting experience working with diverse clients across the emergency management, financial services, healthcare, and technology sectors.