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Politics & Money

HUD releases $8.2 billion in relief funds for Puerto Rico

Department also rolls back several "onerous restrictions" for distribution of funds

Plans initiated by the Biden administration in February to release billions of dollars in aid to Puerto Rico are now coming to fruition with a revised distribution of $8.2 billion, according to a Monday release from the Department of House and Urban Development.

HUD’s latest allocation is a substantial jump from the $1.3 billion in aid the administration originally intended for the U.S. territory to protect against future climate disasters. HUD also removed various spending restrictions put in place by the Trump administration following Hurricane Maria in 2017.

Biden also laid out plans to remove “onerous restrictions,” which HUD confirmed they are working toward. Of those restrictions, HUD removed the incremental grant obligations (or tranche structure) and review by the Federal Financial Monitor which was appointed to oversee Puerto Rico’s grant distribution in January of 2020.

In February of 2020, nine Senators sent a letter to then-HUD Secretary Carson expressing concern about the disbursement of the Community Development Block Grant, which is what Monday’s funding allocations will be listed under. It is likely that this $8.2 billion is the same $8.2 billion HUD announced in January of 2020, which Senators pointed out had “unnecessary stipulations” which only allowed $1.7 billion of the CDBG to be made available.

HUD also removed the requirement for Puerto Rico to request and submit any certification, observations, and recommendations by the Financial Oversight and Management Board, beyond what is already required by law.

“Since its first days, the Biden-Harris Administration has prioritized action to enable stronger recovery for Puerto Rico,” said HUD Secretary Marcia Fudge. “The actions taken by HUD today will unlock access to funds Puerto Rico needs to recover from past disasters and build resilience to future storms, while ensuring transparency and accountability. We are committed to an ongoing partnership with Puerto Rico to empower the island’s communities and help them build back better.”

Puerto Rico’s reconstruction has faced a sluggish recovery for some time following the devastation of Maria, partly due to restrictive roadblocks placed by HUD that did not apply to other aid recipients.

On Sep. 8, 2017, former President Donald Trump signed the Additional Supplemental Appropriations for Disaster Relief Requirements Act, which appropriated $7.4 billion in funding for major disasters declared in 2017.

In Feb. 2018, the Trump administration followed with a $1.5 billion grant to “address the serious unmet needs on the island,” and a $18.5 billion grant in April to further support recovery in Puerto Rico, according to HUD.

Though by the time the second round of funding hit, FEMA had already come under fire for its response in Puerto Rico as much of the island was left without power. The criticism eventually sparked controversy between Trump, who stepped in to defend FEMA, and the area’s local government.

A lawsuit was filed in July 2018 by a coalition of local emergency and justice groups that ordered a temporary halt of the eviction of nearly 2,000 people displaced by the disaster, alleging FEMA planned to prematurely abandon its assistance to thousands of Puerto Ricans when it discontinued its Transitional Shelter Assistance.

After the lawsuit, HUD announced plans to publish how it would allocate a new round of funds, which included $1 billion for housing and housing stock, $145 million for economic revitalization and $100 million for damaged infrastructure.

However, by March 2019, HUD’s Office of the Inspector General began looking into whether the White House interfered with aid approved for Puerto Rico as the island struggled to recover.

At the end of October, the island had only received about a third of the $43 billion Congress had officially allotted to Puerto Rico — an action former HUD Secretary Ben Carson defended.

In an October hearing titled “The End of Affordable Housing? A Review of the Trump Administration’s Plans to Change Housing Finance in America,” the House Financial Services Committee grilled Carson on the purpose of withholding the funds. The secretary said it was a move of common sense due to the corruption in Puerto Rico.

In fact, a Puerto Rican mayor and two former government officials were arrested for the misuse of HUD funds in 2018.

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