North Carolina officials told lawmakers that the state’s Hurricane Helene recovery efforts are “on track,” even as funding gaps and housing shortages pose serious risks to progress across western North Carolina.
During a legislative oversight hearing, Stephanie McGarrah, deputy secretary for the Division of Community Revitalization at the NC Department of Commerce, outlined how the state is managing roughly $1.4 billion in federal disaster recovery funds.
Of the $1.4 billion in federal aid, more than $800 million is designated for repairing and rebuilding single-family homes. Smaller allocations are set aside for multifamily housing, workforce housing, infrastructure, and revitalization of business districts.
Despite the scale of the investment, officials acknowledged a central challenge: available funding may not meet demand.
State projections make clear that rebuilding needs are outpacing available funds. With over 3,600 active applications and an average home repair or rebuild cost of $276,000, demand could top $1 billion — far exceeding the $722 million currently set aside for construction. A more detailed estimate will be available later this year.
Consequently, not every eligible homeowner will receive assistance. Final determinations will depend on eligibility, construction costs, and the number of applicants remaining in the program.
According to the report, 7,924 applications have been submitted since the program began. Of these, 3,704 remain active and are waiting for review. To date, 28 homes have been completed, and 98 are in the pre-construction phase.
In response to these gaps, several lawmakers expressed concern about unmet needs. State Rep. Karl Gillespie, R-Macon, questioned the state’s focus.
“We chose to focus on the 28 completed… but instead we need to focus on the problem … we have 3,704 active applications out there scattered through the mountains that still need help,” Gillespie said. “We need to be focused on helping them, not on some small successes that we have had.”
Adding to these concerns, state Sen. Tim Moffitt, R-Henderson, warned that delays could drive away contractors.
“My concern is we have a lot of national contractors that have come to the mountains… and we are at risk of losing them simply because we are not issuing enough notices to proceed in a timely fashion,” he said.
Compounding the challenge, officials identified a lack of temporary housing as another major obstacle. Many homeowners cannot leave damaged properties, which prevents construction from starting and creates what the state calls a “significant chokepoint” between pre-construction and active rebuilding.
A healthy rental market typically has a multifamily vacancy rate above 5%. However, in the eight counties most affected by Hurricane Helene, the vacancy rate is now effectively 0%. This means that families seeking to relocate during construction have almost no rental options available.
To address the issue, the state is developing a $60 million temporary relocation program to help about 2,200 lower-income households secure short-term housing while repairs are underway.
Even with the temporary relocation efforts, housing availability in western North Carolina remains limited and continues to impede progress. Federal Housing and Urban Development rules permit up to six years for disaster recovery spending, but McGarrah noted the state’s goal is to accelerate the pace.
“When speaking with vendors, our goal is to build 2,000 to 3,000 homes in three years,” she said.
That timeline drew skepticism from some lawmakers. State Rep. Mark Pless, R-Haywood, emphasized the need to restore what was lost rather than focus on future development.
“I don’t care what could be there in the future,” Pless said. “I care what was there in the past and rebuilding it for those who live there now.”
McGarrah pointed to early milestones as signs of progress, noting the completion and ongoing construction of over 160 homes. The state has also processed nearly 4,000 applications and conducted extensive outreach.
Lawmakers are expected to continue monitoring the recovery efforts as funding gaps and housing constraints become clearer. While state officials say the program is proceeding as planned, they acknowledge significant challenges remain as demand continues to grow.