After six years and millions of taxpayer dollars wasted, Governor Roy Cooper discharged the director of the North Carolina Office of Recovery and Resiliency (NCORR), also known as ReBuild NC. While commendable, Cooper’s decision to install Pryor Gibson as the interim director demonstrates that the governor does not intend to address NCORR’s inadequacies.

Per Cooper’s instruction, Gibson has advised NCORR since the start of the year. Nevertheless, NCORR recently reported a $175 million budget shortfall.

However, in a recent hearing, the former director and Gibson admitted that the agency would require $264 million in the worst-case scenario. Then, just days later, the budget deficit was estimated at $319 million.

NCORR has either expended or obligated every dollar in its Homeowner Recovery Program (HRP) budget; still, the agency has 1,397 homes to complete for the victims of Hurricanes Matthew and Florence.

NCORR Funding

The federal Department of Housing and Urban Development (HUD) provided NCORR with grants worth $779.1 million for the rebuilding efforts of Matthew and Florence. HUD also provided NCORR $202.7 million to reduce losses in future disasters. Of the $202.7 million, NCORR is in the process of moving $44.2 million to the HRP.

Moreover, NCORR has already received $90 million from state taxpayers, including $30 million in October and another $50 million in November.

Poor Planning

Unfortunately, due to poor financial planning, NCORR frequently needs to divert funds from one program to another. Since 2019, the Matthew and Florence HRP allocations have chaotically changed numerous times. As shown in Table 1, the Matthew HRP has increased from $104.1 million to $207.6 million.

As depicted in Table 2, the Florence HRP has increased from $325.6 million to $456.7 million. NCORR’s action plans state that allocations are changed “to focus on the most urgent recovery needs.” Shockingly, in August 2024, just two months before NCORR announced its budget deficit, the agency decided to reduce the Florence HRP by $10 million.

Warped Priorities

A natural question might be: If thousands of direct hurricane victims are still waiting for their homes to be completed, what priority could be more urgent than the HRP?

Well, NCORR also decided to construct affordable housing units before completing all the homes of the direct hurricane victims. In fact, NCORR has constructed 752 affordable housing units available to anyone below a certain income threshold for rent. 

As illustrated in Table 3, the amount set aside for affordable housing has increased from $59.7 million to $121.7 million and then back to $54.3 million. Meanwhile, thousands of direct hurricane victims have been waiting years for their homes to be rebuilt.

Inconsistent Reporting

To view outcomes, NCORR’s action plans direct you to the agency’s projections of expenditures and outcomes. The most recent projections for Matthew and Florence provide the following for October 2024:

  • For residential rehab and reconstruction, 6,440 units were projected to be completed, but only 2,236 were. 
  • For construction of new housing, 308 units were projected to be completed, but zero were. 

However, according to NCORR’s most recent summary statistics, only 4,320 homes are in the HRP, and 2,923 have been completed.

So, what is the likely cause of this discrepancy? 

NCORR received more than 10,000 HRP applications. HUD deemed roughly 1,600 applications ineligible, and about 4,400 were withdrawn by the applicants or NCORR. Unexplainably, it appears that as applicants became weary of waiting and withdrew from the HRP, NCORR failed to provide up-to-date outcomes in its projections.

It is also worth questioning why NCORR’s projections distinguish residential rehab and reconstruction from construction of new housing, but its summary statistics do not.

Policy Suggestions

Upon taking office, governor-elect Josh Stein should replace Gibson with a permanent director with experience in the construction industry. The new director should have a strict timeline for completing the homes.

After the remaining 1,397 homes are completed, NCORR should be permanently eliminated. In the future, federal disaster relief grants (including Hurricane Helene) should be administered by something other than a state-run bureaucracy. Instead, policymakers should consider implementing the following alternative:

  • Replace NCORR with a smaller agency in the Department of Commerce designed to aid local governments, award contracts, and provide consistent reporting.
  • Utilize state and federal funds to hire administrative staff in the local governments of impacted communities. Decentralized teams will more effectively ensure quality service for applicants and foster trust with the public.
  • Contract rebuilding efforts with for-profit and nonprofit organizations with a proven track record of disaster recovery. For example, IEM managed a $252 million HUD grant for the State of Florida to rebuild after Hurricane Irma. Using approximately the same time as NCORR, IEM completed about 700 more homes for a third of the cost. Furthermore, IEM has been involved in every disaster recovery HUD grant larger than $1.5 billion since 2005. Also, Habitat for Humanity has been in the home reconstruction industry since 1976. In fiscal year 2023 alone, the organization restored homes for 14,581 families in the United States and Canada.
  • Instruct the Office of the State Auditor to conduct annual audits on the organizations administering and receiving federal disaster relief grants.

Due to NCORR’s ineffectiveness, after six years, 1,397 families are still waiting to return to their homes. Unfortunately, thousands more were devastated by Helene and were forced to the back of the line.

Will Stein have enough resolve to take the necessary measures to improve disaster recovery, or will he follow the failed policies of his predecessor?