FEMA’s Gulf Coast Rebuilding Efforts: The Path Forward

Chairman Thompson and members of the Committee, I am pleased to appear before you this morning and very much appreciate your invitation.

The purpose of my testimony today will be to provide you with some observations about ways the federal government can work more effectively with state and local governments to rebuild in the aftermath of a major catastrophe, based on what I have learned from the Gulf Coast recovery effort.

I do want to preface that I am not an expert on FEMA or emergency preparedness, as are some my colleagues here at this hearing. I am primarily an expert on the role that federal, state, and local governments play to create healthy and prosperous cities and metropolitan areas, large and small. I hope that unique perspective will be of value to you today.

In general, I have three observations.

But before I summarize them, let me reaffirm that any post-disaster recovery effort requires a well-greased federal-state-local partnership, with a stress on “partner.”

Hurricane Katrina brought into sharp focus the reality that no one single level of government has the resources and knowledge to address the scale of post-disaster recovery alone. We live in a federalist democracy. Each level of government has a unique role to play in post-disaster recovery.

The federal government needs to take the lead right after a major disaster because states and localities often do not have the resources or capacity to respond to the scale of the disaster. Three years after Hurricane Katrina, the federal government remains the primary agent for funding and facilitating recovery, with many of those dollars still requiring federal approval. Meanwhile, states are responsible for determining how federal funds are to be spent and distributed and ultimately set the rules for redevelopment. Finally, local leaders are critical for articulating a vision and priorities for state and federal funds and setting the climate for effective implementation, such as setting zoning and land use laws to accommodate future growth and housing and providing key public service delivery, such as schools, public safety/crime, code enforcement and issuing a smooth permit process for accelerating housing renovations.

If any one of those levels of government is not performing their role well in rebuilding impacted communities, the whole system is ineffective.

But in this federalist system, it is incumbent for the federal government to not simply push massive amounts of monies out the door and then adopt a wait-and-see mode with states and localities or over-regulate with distrust. Instead, the federal government has a shared stake in recovery success and therefore must be a pro-active partner with states and localities by giving them the tools and flexibilities to succeed.

Which brings me to my main three points.

First, after a mega disaster, the federal government needs to get its own house in order by creating a White House-based” office of disaster recovery,” that is focused on results.

Many state and local leaders have praised the Office of the Federal Coordinator for Gulf Coast Rebuilding, which is situated in the Department of Homeland Security (DHS). In practice, the office does not have the independence or sufficient authorities to deliver optimal impacts on the ground.

In short, it should be a lean, White House-based, outcome-oriented operation.

Such an office should be placed in the White House with direct report to the president to demonstrates that long-term recovery SUCCESS is a priority and to effectively mediate conflicts between two agencies that are stifling state and local implementation, such as conflicts between the use of FEMA and CDBG funds in a single project.

Most importantly, such an office should be given the mandate to identify explicit goals and outcomes for post-disaster recovery, working with state and local leaders in the affected region.

What does this mean? For instance, this office could set such critical goals and targets as: (1) ensuring 100 percent spend-down of FY 2006 and FY2007 appropriated federal dollars at the end of a date certain; (2) ensuring on-time, quality delivery of federally-led initiatives, such as public housing redevelopments and levee modernization; and (3) ensuring that by xx date, all dislocated families will be in safe, affordable, longer-term housing

The office should then be given the authorities and the accountability to work across the key federal agencies to meet these goals and benchmarks. It is not sufficient to merely “coordinate.”

Instead, the situation we have today is that we are not organized around goals or to deliver results, and if there are such recovery goals, they are buried within a sea of other goals in each of the disparate agencies.

Second, federal leaders should then, in turn, reward state and local leaders for achieving a clear set of recovery outcomes, not just critique slow spenddown or only play “gotcha” regulator of fraud prevention.

Most philanthropists today ask their grantees: What are your indicators of success?

Most private investors ask: What is my return on investment?

When it comes to Gulf Coast recovery, federal leaders (and media) tend to ask: how fast are you spending down funds and how responsibly are you spending those funds?

No doubt, it is important to spend down existing funds efficiently. And we all applaud efforts to prevent fraud, waste, and abuse.

However, at the end of the day, when people ask me: Is New Orleans bouncing back? Speed and responsible spending does not answer that question.

Imagine what we could accomplish if the federal government instead helped and rewarded state and local leaders for achieving explicit recovery goals with benchmarks?

• In two years, we will restore 75 percent of the jobs lost in the city of New Orleans.
• In two years, we will repair or replace 20 percent of all of the damaged small-unit rental apartments in the Gulf Coast.
• We will ensure that at least 20 percent of existing residents will benefit from new skills training from the jobs created by all the housing repairs and reconstruction in the region

By doing this will ensure that taxpayers are getting a return on their investment by, in the case of New Orleans, not replicating the same city and metro area but knowing that our funds are helping greater New Orleans rebound as a better version of itself.

To do this, the federal government can consider providing planning grants to states or localities to develop unified plans with community goals and concrete performance outcomes that help guide and prioritize federal and state spending.

It can evaluate the impact of fraud prevention and increased accountability rules to make sure they don’t hamper state and local achievement of their goals and outcomes.

In short, we should encourage quality results as we help facilitate speedy and responsible spending.

Finally, the federal government needs to provide better data and transparency to help federal, state and local leaders track recovery progress against key goals and outcomes. To hold each level of government accountable for outcomes assumes that we can quantify and keep track of those outcomes.

Not really.

Since the fall of 2005, the Brookings Institution Metropolitan Policy Program has been tracking over 40 recovery trends in New Orleans and Louisiana through its New Orleans Index.

Despite all of our data, we do not know the following:

If a goal is ensure that New Orleans remains a diverse city, home to many original residents, we don’t know how many residents today are returnees and how many are newcomers and their characteristics. We don’t even have the status and location of all the city’s former federally-assisted housing residents.

If we know the income, race, or employment characteristics of the population in the city, it is two years old, completed dated in the real-time decisionmaking of recovery.

If a goal is to help save the small mom and pop stores that are at the heart of many tourist communities and others in the Gulf Coast, there is no good data on the health of small businesses (opening, closures, etc.)

Even if a goal is to help accelerate the spend-down of existing funds, we don’t have the status of federal spending by state, parish or county, in the aggregate or by funding type, beyond the FEMA public assistance dollars and temporary housing assistance. And, as you know, we all get lots of questions about the status of the funding and where it is going.

For future mega-disasters, the federal government should consider:

• Mandating the reporting of all federal short- and long-term recovery spending across the agencies at the project and geographic level
• Setting aside appropriations and staffing for the Census Bureau to conduct special population or housing estimate counts for disaster-impacted areas
• Creating a federal one-stop shop of all population, labor, economic, and housing statistics for disaster-impacted areas for easy access for reporters, researchers, and decision-makers so we can better track progress and outcomes.

In short, I believe that the three years since Hurricane Katrina has taught us the importance of a strong and sustained federal-state-local partnership in post-disaster recovery.

Thank you. I very much appreciate the opportunity to appear before you, and would be pleased to answer any questions you might have.