HUD Announces New Action to Improve Housing in Puerto Rico

The U.S. Department of Housing and Urban Development (HUD) and Puerto Rico’s housing department, Departamento de la Vivienda, have announced two partial approvals of Vivienda’s Action Plan, approving the use of $6.2 billion in Community Development Block Grant Mitigation (CDBG-MIT) funding for Puerto Rico.

HUD is "committed to working with Puerto Rico to reset our relationship on the island’s recovery efforts, and the action we are taking will play a key role in this effort by ensuring that Puerto Rico is able to access and spend critical disaster and recovery funds on urgent unmet needs,” said Arthur Jemison, HUD’s Principal Deputy Assistant Secretary for the Office of Community Planning and Development.

On January 20, 2021, HUD, under the previous administration, issued a Partial Approval of Puerto Rico’s Annual Action Plan worth more than $4.9 billion. This Partial Approval carried with it conditions on Puerto Rico’s CDBG-MIT funds. Under the new Administration, HUD and the Departamento de la Vivienda are committed to resetting the relationship and accelerating access to promised reconstruction and resilience funding while ensuring transparency and accountability. HUD is working to remove onerous conditions placed on the more than $20 billion of CDBG-DR and CDBG-MIT funds allocated to Puerto Rico, which are unique to Puerto Rico, to free up these long-promised funds and bring the relationship in line with other jurisdictions.

Further, the Partial Approval required HUD’s Office of Community Planning and Development (CPD) to take an action by February 1, 2021, or have the burdensome terms and conditions of the Plan further codified, and thus difficult to amend.

Working in consultation with Vivienda’s leadership, on February 1, 2021, HUD CPD approved several new elements of the Plan, giving access to another $1.3 billion in CDBG-MIT funding. At the suggestion of Vivienda, HUD CPD issued technical disapproval to an aspect of the Action Plan, giving the organization both the time to make minor changes in the Plan and the window to work with HUD to remove the conditions previously imposed. This action enables Vivienda and HUD to reset their relationship on Puerto Rico’s disaster recovery and to eliminate the red tape that prevents faster recovery.

Specifically, HUD’s action gives Vivienda access to an additional $1.3 billion, for a total of $6.2 billion under the Action Plan, and creates the opportunity for Vivienda and HUD to remove the onerous conditions in the previous administration’s Partial Approval and Grant Agreement that are holding back progress by slowing the housing department’s access to the funds. By giving Vivienda additional time to enhance its housing plan, HUD will have the necessary time to work with Vivienda to remove oversight impediments, while allowing the $6.2 billion to go to work on the island immediately.