CEDAR RAPIDS - Local officials admit that getting housing funds into the hands of the owners of flood-damaged homes is more complicated than they imagined.
The central problems are:
l There is not enough federal and state disaster financial assistance and it is too slow in getting to cities and flood victims.
l The rules accompanying the money prevent some from qualifying for it.
l The federal government has no program specifically designed to help with recovery from disasters. Instead, cities must rely on existing programs that don't fit disaster needs, that slow recovery and that exclude some victims.
The list comes from two officials who met with The Gazette's editorial board this week — City Manager Jim Prosser and Jim Ernst, president/CEO of Four Oaks and its affiliate the Affordable Housing Network — but the complaints are being heard throughout Iowa as public officials face disaster recovery needs that far outpace available money.
The two officials have ideas on how things could be improved.
Prosser said the federal government should change its rules so a city the size of Cedar Rapids can receive disaster funds directly with the federal government rather than having to funnel paperwork and funds through state government.
Ernst said he wonders why the federal government hasn't figured out that disaster areas in colder climates need quicker responses than those in hurricane areas where recovery work can proceed year-round.
Both said the federal government needs to figure out a way to dispense funds with rules specifically designed for disaster needs. The federal government instead is using Housing and Urban Development and Small Business Administration programs with rules never intended for disasters, they said.
In housing assistance alone, the city needs more than $100 million for the 1,600 homeowners who have applied for grants for housing rehabilitation, mortgage assistance or down payment assistance, Prosser and Ernst estimated.
The city, though, can count on only a fraction of that money. The city has $7.9 million in state Jumpstart funds, all of which will be committed in housing grants this week, Ernst said. The city also has received a commitment of $13.9 million in federal Community Development Block Grant funds and is expecting a new commitment of another $8 million.
"I'm not ready to say that I know we will run out of money," Ernst said. "I think there's a risk we will run out."
There are two other complicating factors.
Some homeowners who were flooded in June were buying their homes on contract rather than with a mortgage through a financial institution. As a result, they did not have title to the home and don't qualify for federal housing rehabilitation funds.
Secondly, a number of homeowners who received payments from the Federal Emergency Management Agency immediately after the flood — the limit was $28,800 per household — spent the portion of the FEMA money earmarked for home repairs on other things. The size of any housing rehab grant now must be reduced by the amount of the earmarked FEMA money spent on something else.
Ernst's Affordable Housing Network is teaming up with the Wisconsin Partnership for Housing Development to administer the city's distribution of state and federal housing rehabilitation funds.
Nearly 1,600 homeowners have registered for housing help in a city that has about 2,100 significantly flood-damaged homes, Ernst reported. Another 1,300 to 1,500 flood-damaged residential units were rentals and are not eligible for funds through the city program.
Ernst said all 1,600 homeowners seeking help will have had their properties reinspected and a decision made on help by the end of the year. As of early December, about 1,000 inspections were complete and 400 to 500 owners have had final interviews, Ernst said.
He said owners of 400 of the 1,600 homes are seeking down payment assistance on a new home because their flood-damaged home can't be rehabilitated. In many of those instances, the cost to renovate would be greater than the value of the home, he said.
Those seeking down payment assistance cannot use the money to buy a home outside of Cedar Rapids. The federal government requires that money received by the city be used inside the city, said Prosser and Jane Benning, the city's housing services manager.
Ernst said not all of the 1,600 people seeking housing assistance will qualify, in part, because of the complications noted above.
Prosser noted the city had no role in the disbursement of FEMA grants that went out quickly to owners of flood-damaged homes. Typically, a small part of those grants was designated for use for emergency needs, with the bulk of the money to be used for housing needs.
Ernst said people might have used FEMA funds on "real needs," but if the housing portion of the grant was spent on non-housing items, that spending counts against any housing grant someone qualifies for now, he said.
Prosser noted that Grand Forks, N.D., had received around $160 million in federal Community Development Block Grant funds within three months of its flood in 1997, while Cedar Rapids has received less than $40 million for housing and businesses after nearly six months.
This year, however, the federal government is attempting to cope with disasters in 30 or more states. Congress just appropriated $2.1 billion in disaster funds, of which Iowa has received just $125 million. Cedar Rapids doesn't yet know how much of that it will get.
Prosser estimated that the state of Iowa has received three commitments from the federal government for block grant funds: $85 million, $71 million and $125 million. Of that, he said, Cedar Rapids has received $13.9 million and expects another $8 million soon in addition to $7.9 million in state Jumpstart funds.
Help for local businesses totals an additional $18.5 million.
