Last week, the federal Department of Housing and Urban Development (HUD) announced that North Carolina will receive $1.65 billion in disaster recovery funds to reconstruct and repair homes damaged during Hurricane Helene.
Fortunately, the North Carolina Office of Recovery and Resiliency (NCORR) will not be responsible for the Helene recovery. On Gov. Josh Stein’s first day in office, he issued five executive orders for disaster recovery efforts related to Helene, including one to replace NCORR. Instead, Stein has decided to take the advice of the John Locke Foundation and create a new agency to direct the reconstruction and repair of homes for the victims of Helene. Hopefully, the new agency will be designed to correct NCORR’s mistakes, not mimic its failures.
Before NCORR
Before we look ahead, we should revisit the decisions that brought us to this point.
The year was 2016, and in the wake of Hurricane Matthew, North Carolina was set to receive disaster recovery grants from HUD for the first time since Hurricane Floyd in 1999.
In response, the Disaster Recovery Act of 2016, signed by former Gov. Pat McCrory, instructed the North Carolina Department of Commerce to transfer disaster recovery funds it received from HUD to the North Carolina Emergency Management Division of the Department of Public Safety. This act created a dual management structure in which Commerce was the grantee and DPS the subrecipient implementing the grants.
The plan was for DPS to award contracts to private organizations to provide program management. Unfortunately, DPS had no experience administering federal disaster recovery grants, which resulted in delays due to failure to comply with federal procurement regulations.
NCORR
In September 2018, Hurricane Florence struck the state, resulting in additional disaster recovery grants from HUD. At the time, North Carolina had been identified as a “slow spender” of the Matthew disaster recovery grants by HUD due to the delays caused by DPS’s procurement deficiencies. In late 2018, in an attempt to remedy the complications within DPS, former Gov. Roy Cooper created NCORR to become the new subrecipient. Unfortunately, under NCORR, disaster recovery was itself a disaster.
NCORR was initially established as a temporary agency of only 45 three-year time-limited positions, and it was to award contracts to private organizations for program management. This setup did not last long, however.
In 2020, NCORR replaced Commerce as the grantee. The following year, the agency’s time limit was removed, and in 2022, NCORR ceased awarding contracts to private organizations for program management. By 2023, in an effort to consolidate disaster recovery within NCORR, the agency had morphed into a centralized bureaucracy of more than 240 employees.
In a November 2024 hearing (see below for link to transcript), legislators asked why NCORR no longer contracted program management with private organizations. The agency’s former director answered that private vendors are motivated by profit, while state staff are altruistic in their mission to help families.
If that’s true, the first question would be: What results did these humanitarian public administrators produce?
Tragically, despite receiving $981.8 million from HUD, the benevolent bureaucrats generated a $319 million budget shortfall while completing homes for only 70% of the victims of Matthew and Florence. With 1,297 families still waiting, policymakers should seriously question whether NCORR is the best organization to finish the rebuilding efforts.
Executive order to replace NCORR
Within the executive branch, Stein has ordered that the Governor’s Recovery Office for Western North Carolina (GROW NC) be formed to create the vision for Helene recovery efforts, provide transparent updates to the public, and coordinate intergovernmental communications.
Also, inside Commerce, a Division of Community Revitalization will be established to administer the $1.65 billion from HUD and oversee the rebuilding of homes damaged by Helene. This means that DCR will serve the function for Helene victims that NCORR is supposed to serve for victims of Matthew and Florence.
Moving forward
NCORR’s failed rebuilding efforts will haunt Cooper’s legacy. Stein has the opportunity now to chart a better path than his predecessor by successfully managing the Helene recovery. To do so, it will be vital that DCR does not replicate NCORR’s failures. Instead of structuring the agency as a bloated centralized bureaucracy like Cooper’s NCORR, Stein should:
- Ensure that DCR does not mimic NCORR’s organizational structure or action plans
- Require annual audits of DCR’s activities
- Require that DCR complete the homes for the direct victims of Helene before allocating resources to other projects
- Design DCR to be a lean organization tasked primarily with contracting rebuilding efforts with private organizations that have proven track records in disaster recovery
- Staff DCR with experts in financial reporting and the federal procurement process of awarding contracts for HUD grants
Helene’s victims deserve no less.