Finding 2 – There are major systemic barriers utilizing funding.

For our second finding, we evaluated some of the programs used to distribute the allocated funds to the island, namely at HUD’s Community Development Block Grants –Distracter Recovery (CDBG-DR). Transferred from HUD to the USVI’s Housing Finance Authority (HFA) for distribution, the CDBG-DR funds are broadly directed in four ways: for housing, infrastructure, economic revitalization & recovery, and public services.

The funds are used for a multitude of recovery efforts, one such notable use being the “Local match for FEMA,” which accounts for almost half of all total funds during just the first and second tranches alone. Most FEMA funding available to USVI is delivered on a reimbursement basis, which the USVI has addressed partially by diverting CBDG infrastructure funding to foot the upfront FEMArelated costs. Accounting for a huge to share of the total infrastructure allocation, these dollars could be used towards infrastructure separate from FEMA projects, if the reimbursement requirements changed.

Another potential challenge facing the system is the allocation of all CBDG funds to the Housing Finance Authority, even though the majority of the funds are not used for housing. Having the HFA as the primary recipient of CBDG funds creates the potential for this, already heavily used, Authority to be overburdened with assigned programs beyond its staffs’ scope and capacity.

As of September 2022, according to VI Housing Finance Authority:

A potential example of this maxing out of capacity for the authority is the current status of the EnVIsion Tomorrow Homeowner Rehab program. Designed to support homeowners repair and rebuilding after disaster, the program enables eligible households to have up to $350,000 worth of work towards rehabilitating their homes. A critical effort as 52 percent of all housing stock in the territory experienced major or severe damage, the program has experienced significant program mobilization and matriculation delays. As of September 2022, the program had over 600 eligible-homes approved for work, but only 44 under active construction and 14 homes that have completed the program since its approval in 2018. While increasing costs of materials and labor, in additional to the limit supply of labor on island, there are clearly systemic breakdowns occurring with the implementation and execution of the program.