The state Department of Commerce official leading the effort to allocate $1.4 billion in federal disaster block grants said Monday that more funding is vital to help communities hit by Hurricane Helene recover.
Stephanie McGarrah, deputy secretary for the department’s Division of Community Revitalization, made the remarks at a public hearing in Asheville.
“We’re proposing that we put the vast majority of this money into housing,” McGarrah told the audience at the Land of Sky Regional Council. “The reason for that is there is not another source of funds for housing. This is it. We’re already deeply concerned that this is not going to be enough. So let me just be really clear about this: We’re worried right off the bat.”
In her presentation, McGarrah said about $1 billion of the $1.4 billion is expected to go toward housing. Hurricane Helene damaged about 74,000 homes in North Carolina — but McGarrah said Monday that the funding will likely enable the repair of only about 3 to 4% of the total number of homes damaged.
“We think we have enough money to maybe do 2- to 3,000 homes, depending on how many we actually need to completely rebuild and how bad the damage is on the others,” she said, drawing gasps from some members of the audience.
The HUD grants are not the only funding source for repairing and rebuilding homes. Home insurance claims and funding from the Federal Emergency Management Agency (FEMA) also play a role.
Monday’s meeting is one of six the state is holding across the region this month to solicit public input on how to spend the U.S. Department of Housing and Urban Development funds. The money is part of HUD’s Community Development Block Grant Disaster Recovery (CDBG-DR) program.
Public input is just one step in a long process of North Carolina eventually securing the funding. The state Department of Commerce has already released its draft proposal for how to allocate the funds. After the hearings conclude, the state will submit its plan to HUD, which issues final approval before the funds are released.
Late last week, Gov. Josh Stein (D) announced that he is seeking an additional $19 billion in federal funds for Helene recovery. Even that is a far cry from the total amount needed: the state Office of State Budget and Management estimated in December that the historic storm caused nearly $60 billion in damage.
The state Department of Commerce is working with a newly-created office, the Governor’s Recovery Office for Western North Carolina, or GROW NC, to coordinate the state’s disaster recovery effort.
McGarrah was previously the executive director of the North Carolina Pandemic Recovery Office. She emphasized Monday that the HUD funding is designed to address long-term recovery needs that cannot be met through other funding sources, and is expected to be spent over the course of six years.
“There are a lot of things about government that can be very bureaucratic,” she said. “This is one of the most bureaucratic programs. … We are going through all the many, many steps in the process before we can even have the chance to draw down the money. It’s very different from the pandemic funds.”
She also broke down the ways that the state Department of Commerce proposes spending the $1.4 billion.
Of the $1 billion that would go toward housing, $807 would go toward reconstruction and rehabilitation of owner-occupied units. $191 million would go toward rehabbing damaged rental units or constructing new ones. And $53 million would go toward the construction of workforce housing.
The remaining funding would be spent as follows: $194 million on community infrastructure, $111 million on commercial district revitalization and about $71 million for administration of the program.
The effort to repair owner-occupied units would “start with the poorest folks first,” McGarrah said, beginning with those earning 50% of the area median income (AMI) and extending to a top limit of 120%.
AMI varies across different Western North Carolina localities. In Buncombe, Madison and Henderson counties, for example, 50% of AMI comes out to an annual household income of $46,750 for a family of four.
With the federal government thrown into chaos in the weeks after President Donald Trump’s inauguration, uncertainty looms over many agencies and programs, including HUD. McGarrah said she is concerned about the potential impact on Helene recovery funding, but not necessarily in the immediate term.
“I don’t know,” McGarrah said in response to a question from an audience member about whether she’s worried. “I would say, at this point, no. But I’m concerned about delays and I’m concerned about potential funding impacts.”
