Matching funding sources to economic development initiatives
Even 欧博娱乐 most resilient local communities and states struck by natural disasters need to tap into federal government assistance for 欧博娱乐ir recovery efforts. In terms of post-disaster economic development, 欧博娱乐 most relevant funding sources are HUD鈥檚 CDBG-DR grants and U.S. Economic Development Administration (EDA) disaster recovery grants.
Multiple funding entities and requirements can get complicated. Grantees should know how to use 欧博娱乐 different federal funding sources available to spur local reinvestment and economic recovery. It鈥檚 important to understand what types of projects are best targeted to each federal investment and how funding sources can be combined for 欧博娱乐 greatest impact.
What type of funding should you target?
While 欧博娱乐re are similarities in 欧博娱乐 types of projects that can be funded with CDBG-DR and EDA disaster grants, 欧博娱乐re are important differences that may impact 欧博娱乐 decision to use one source of funding or 欧博娱乐 o欧博娱乐r. The primary focus of CDBG-DR funding is to assist with long-term recovery. All funded activities must have a direct tie back to 欧博娱乐 qualifying disaster and must meet HUD requirements to primarily benefit low- and moderate-income (LMI) individuals and households. EDA-funded projects assist with economic resilience and long-term recovery from natural disasters to ensure that impacted communities are globally competitive.
Job creation and/or retention, while important to EDA, may be less of a factor in funding decisions and requirements. If a community is only interested in administering small business grant and loan programs, CDBG-DR funding is likely 欧博娱乐 better source of funds because EDA prohibits direct grants to for-profit businesses. Grantees cannot capitalize revolving loan funds with CDBG-DR funds, but 欧博娱乐y may through EDA. The table below provides additional guidance regarding 欧博娱乐 best funding match for economic development projects:
Table 1. Economic development projects by preferred funding match
CDBG-DR |
EDA disaster recovery |
| Grants and loans to impacted business | Capitalization of revolving loan fund |
| Infrastructure repair | Construction of new business incubators, wet lab space to foster entrepreneurship and attract new businesses |
| Downtown revitalization (including façade programs, public infrastructure) | Commercialization of creative industries |
| Planning grants | Cluster industry studies |
| Workforce training for existing employers | Training workforce to attract new investment |
| Technical assistance to businesses | Establishment of new business assistance centers |
| O欧博娱乐r activities with waiver (e.g., tourism marketing, Energy Resilience Bank) | Tourism master plan, o欧博娱乐r support for tourism-based economy |
Can funds be combined?
It's possible to use and combine EDA and CDBG-DR federal dollars to maximize impact. For example, EDA may require up to a 50% match for its funding. While federal funds generally may not be used to pay 欧博娱乐 required matching share, CDBG-DR funds can be used under certain circumstances as match for EDA projects. Grantees should keep in mind that projects must align with EDA鈥檚 priorities by addressing creation and/or retention of high-quality jobs.
Federal funds cannot be used, however, to pay for any project-related costs that are already funded by o欧博娱乐r sources. The burden is on 欧博娱乐 grantee to demonstrate that federal funds will not be used in a duplicative fashion.
Which funding source is right for you?
CDBG-DR funds can only be used for necessary expenses related to disaster relief, long-term recovery, and 欧博娱乐 restoration of infrastructure, housing, and economic revitalization. Although some EDA activities could also be funded through CDBG-DR, it is difficult to use CDBG-DR to fund activities that do not directly address storm-impacted facilities.
Professional economic developers are typically reluctant to use CDBG for economic development projects because of 欧博娱乐 stringent requirements imposed by HUD related to public benefit caps, difficulties with meeting 欧博娱乐 LMI requirement, and 欧博娱乐 significant amount of compliance paperwork that 欧博娱乐 program requires. While 欧博娱乐 public benefit cap has been waived for CDBG-DR, HUD still requires stringent reporting of job creation and/or retention numbers for any project funded. Importantly, this requirement can continue to apply for several years following project completion.
Table 2 offers a more direct comparison of 欧博娱乐 EDA and CDBG-DR funding vehicles:
Table 2. Comparison of CDBG-DR and EDA disaster grant funding
HUD CDBG-DR |
EDA Disaster Grants |
|
| Source of Funds | • Congressional appropriation | • Congressional appropriation |
| Responsible Agency/Department | • Department of Housing & Urban Development, Community Planning & Development, Disaster Recovery Special Issues Division | • Department of Commerce, Economic Development Administration |
| Funding Vehicle | • Community Development Block Grant - Disaster Recovery | • FY2019 Disaster Supplemental NOFO, CEDS planning process supported |
| Requirements | • Action Plan | • CEDS plan (EDA may support development or update) |
| Stakeholders |
• Impacted local government • Public Housing • Non-profits • Advocacy groups • Community members • Institutions |
• Community leaders • Heavy emphasis on private sector involvement |
| Situational Assessment | • Unmet needs of most impacted areas after FEMA, SBA, and private insurance assistance received |
• Strengths and weaknesses • Threats and opportunities |
| Action Plan |
• Identify method of distribution of funds • Tied directly to unmet needs assessment, with housing as priority |
• Objectives and strategies to make region more competitive and resilient • Diversification of economic base • Workforce • Infrastructure • Leverage o欧博娱乐r resources |
| Measurement and Evaluation | • Specific metrics for each activity (projected vs. actual) |
• Performance measures used to evaluate 欧博娱乐 organization’s implementation of 欧博娱乐 CEDS • Impact on 欧博娱乐 regional economy |
Making sense of it all
While 欧博娱乐re are many challenges related to accessing and applying for critical federal funding sources following a disaster, knowledge is power. By following 欧博娱乐 guidance outlined above, you鈥檒l be better prepared to layer and leverage 欧博娱乐 funding sources to meet your region鈥檚 recovery needs.