Six years after North Carolina Office of Recovery and Resilience (NCORR) was created by former Gov. Roy Cooper, not a single house had been rebuilt. Storm victims from Hurricanes Florence and Matthew were still waiting in hotel rooms or wherever else they could for their cases to be resolved. And when the scale of the waste in the NCORR became clear, many called for accountability and for heads to roll.
Tense hearings at the state legislature led to the director, Laura Hogshead, being replaced. To his credit, new Gov. Josh Stein decided to sidestep NCORR for Hurricane Helene recovery. Instead he created a new office called the Governor’s Recovery Office for Western North Carolina (GROW NC). It seems like a risky move for Stein to tag “governor” to the side of it, seeing as it risks becoming a bloated bureaucracy in many of the same ways that NCORR did. But he’s hoping a fresh start will make the difference.
Like many of the most intractable problems in government though — whether health care or housing or disaster relief — the answer is less likely to be “do it better this time” than to revisit the most basic structures and premises of these failing systems. And for rebuilding after a disaster, my question is: Why does the government need to run enormous, complex offices that manage every step of the process for each homeowner?
In State Auditor Dave Boliek’s audit on NCORR, he called it a “logistical nightmare.” It was the kind of bureaucracy where jobs multiply and money disappears and results were hard to find.
Boliek said applicants had to undergo eight separate steps to complete the application process as part of the ReBuild (NC) or Homeowner Recovery Program (HRP)
“Each step took an average of a minimum of 100 days, and then the grant determination, so the eligibility determination took an average of 936 days or 2.5 years,” the state auditor said. “Some families remained in temporary housing for as long as 1,400 days on average. NCORR did not start construction on eligible projects, and the way we talked about it in our office is that they didn’t start swinging hammers until approximately four years after homeowners were deemed eligible. That’s how bad it was. And quite frankly, the people of North Carolina deserve better.”
As of about a year ago, the breakdown was $1.3 billion spent ($319 million over budget) and 3,019 homes rebuilt or repaired (with another 1,297 homes not yet completed). Doing some back-of-the-envelope math, that’s about $430,000 per person. Most of these repairs and rebuilds required a fraction of that amount.
Taking a lesson from the private sector, why not just cut them a check for the amount they lost (after verifying the extent of the damage, and that they are who they say they were and lived where they say they lived)? If your home is damaged by flooding and you have flood insurance, they typically just give you a check for the settlement amount. This is because the private market understands how wasteful and inefficient it would be to manage every step of the process.
Federal agencies like HUD and FEMA want to ensure though there is no “fraud,” which would include a person whose house was damaged doing something else with the money other than fixing their house. But really, who cares? After insurance companies verify that you are covered and you did indeed suffer the losses, they certainly don’t care how wisely you spend that money.
If someone who lives in a rural western North Carolina community had their home destroyed in Hurricane Helene, and they are waiting for GROW NC to help make them whole, should it matter if they rebuild on that same hill? Many of them have since moved on to live with relatives. Maybe their adult children moved on, and they don’t need the same amount of space. Maybe the little neighborhood they loved is permanently scarred by the storm damage, businesses have closed, parks haven’t been rebuilt, and they’d prefer to live where they’ve relocated. Would allowing them to spend that money on housing or transportation to support where they’ve decided to relocate be enabling fraud?
Beyond the money saved avoiding unnecessary bureaucracy, trusting them to make their own decisions with the money seems like basic respect. If the pre-storm market estimate for their home was $250,000, and it was a total loss, cutting them a check would empower them to rebuild their lives, not just their homes.
This kind of program would be more like other voucher and cash-transfer programs, which have shown a lot of promise in reducing bureaucracy while delivering aid to citizens. Housing vouchers are much more efficient than building and maintaining public housing. Food stamps are much more efficient than the system that came before, where the government collected excess food from farms and distributed it themselves. I would argue the same is true for education vouchers over government-run schooling.
Vouchers and cash-transfer programs allow the person being assisted to determine what they think is the best place to live, food to eat, and school for their children. There should be some guardrails to ensure there isn’t fraud, but giving the money directly to those affected, and allowing them to make use of it, even if there are some bad decisions and waste, usually comes out way better than creating enormous bureaucracies to micromanage the process.
Transitioning agencies like NCORR and GROW NC to cash-transfer programs would be difficult. It would require federal waivers and changes in law surrounding HUD and FEMA. It would also take the same at the state level. But if we’ve decided to help those who’ve lost their houses in storms, after some initial inspections of the property and identity verification, cutting the person a check and trusting them to do the rest is a much more efficient and respectful way of approaching it than spending a decade after each storm creating more paperwork than homes.