Jeremy Papasso // Digital First Media / Boulder Daily Camera via Getty Images
How federal disaster funding can slow rent increases after extreme weather
Coloradans often welcome rain storms with the refrain, “We need the moisture.” After the deadly floods in September 2013, many Coloradans sang a different tune.
Over five days, a slow-moving storm covered some areas of the Front Range with up to 20 inches of rain. Overall, the floods killed 10 people, displaced 18,000, and caused more than $4 billion in damage to more than 17,000 structures, of which 1,882 were completely destroyed, according to the Colorado Division of Homeland Security & Emergency Management’s after-action report.
Such situations have become more common as human-caused climate change continues to intensify extreme weather, Next City reports. According to the National Oceanic and Atmospheric Administration, in 2024, there were 18 days when a storm or extreme weather event caused flooding and significant property damage—twice as many as in 2023. Hurricane Helene caused about $59.6 billion in damage in North Carolina alone; Hurricane Milton in central Florida caused about $34 billion in damages.
As buildings are damaged and housing units are lost, these storms also present opportunities for real estate speculators to drive up the cost of housing. A 2022 study published in the Journal of Environmental Economics and Management found that real estate prices in areas damaged by hurricanes can be anywhere between 5% and 10% higher than in non-damaged areas. Another study conducted in 2024 by the Massachusetts Institute of Technology concluded that rent increases in storm-damaged areas follow a similar trajectory.
The increasing cost of housing following a damaging storm may seem like simple economics: Prices increase as supply declines. But there may be ways for governments to use federal disaster funding from the Community Development Block Grant – Disaster Recovery (CDBG-DR) to stem the increasing cost of housing following a damaging storm, according to Rachel Drew, senior research director of public policy at Enterprise Community Partners.
“When we do consider renters and make them an explicit part of our disaster recovery programs, we can certainly improve outcomes for them by reducing rent increases,” Drew tells Next City.
How Disaster Funding Can Protect Renters
CDBG-DR is a flexible funding program managed by the Department of Housing and Urban Development, designed to help governments afford disaster recovery efforts after a presidentially-declared disaster. Funds can be spent on housing, infrastructure, and various economic development projects.
CDBG-DR is the only program that can specifically address the needs of renter households, Drew says, unlike other federal disaster funding programs administered by the Small Business Administration or the Federal Emergency Management Agency (FEMA).
“Many of the other programs are either not specific or have limitations that actually disadvantage renters over property owners,” Drew says. “So it’s important to highlight not only that this option exists, but that when applied, it is effective.”
Disaster funding has also become a political sticking point. President-elect Donald Trump and billionaire backer Elon Musk tanked government funding packages in December 2024 because they did not raise the debt ceiling, which would have allowed the incoming Trump administration to provide deeper tax cuts for wealthy benefactors. Congress eventually passed a temporary spending bill that included $110 billion in disaster relief, including $29 billion for FEMA and $12 billion for the CDBG-DR program, but Drew says the funding only applied to disasters through the end of 2023, like the wildfire in Maui, Hawaiʻi.
It is also not guaranteed that communities will receive the disaster funding, and the money can be slow to arrive, Drew adds. This can make it both expensive and challenging for impacted communities to recover. The House of Representatives passed a bill authored by Colorado congressman Joe Neguse last month to modernize the disaster funding process, although the bill only applied to FEMA funds.
Even so, disaster funding can have a sizable impact on communities once it arrives. Drew and her team studied how four Colorado counties—Boulder, Weld, Larimer, and El Paso—deployed CDBG-DR funding following the 2013 floods. Overall, the state received more than $320 million in CDBG-DR funding to address issues stemming from the floods and other disasters that year. That total does not include additional funds contributed by HUD or FEMA.
Drew’s team found that initiatives to buy and rehabilitate homes and rebuild damaged infrastructure, such as sidewalks and stormwater systems, helped these counties prevent large rent increases following the story.
To be clear, CDBG-DR funding will not wholly prevent rent and home prices from going up after a storm. However, Drew explains, the financing can reduce overall housing costs increases by between 4% and 6% following a storm. That means rents will still increase, but not as much as they would have if local governments didn’t receive the funding.
“Disasters don’t care whether you’re in a red or a blue state. They don’t care if you’re if your mayor is a Republican or a Democrat, and they don’t care what the president or the Congress is either. Disasters hit everywhere,” Drew says.
Making Strategic Investments
Each of the four Colorado counties Drew’s team studied spent their CDBG-DR show how CDBG-DR funding can be utilized to tame rent increases following a disaster, from building new affordable units to assisting with repairs.
For instance, Boulder County invested in four affordable housing developments in cities including Louisville and Longmont. The projects added 614 affordable housing units for individuals earning between 40% and 60% of the area’s median income, which was around $48,000 for a single individual when the funding was awarded in 2015.
The county also acquired 45 properties following the floods through its Flood Buyout Program. The county’s Parks & Open Space department managed the properties, later absorbing 14 of them. Another 16 were rehabilitated and then made available for purchase in the private market. However, six of the properties were required to be transferred to nonprofits, religious groups, or other qualified organizations, because they also received funding from FEMA.
Property records show that some of the properties included in this transfer were single-family homes that later sold for below the county’s 2016 median price of $550,000. Others remain vacant plots of land today.
Even with the funding, rents in the county increased by 8.6%, from $1,103 to nearly $1,200 per month in the year following the 2013 floods, according to data from local brokerage 8z Rentals. That increase was primarily driven by low vacancies, which suggests the rent increases could have been much higher had the county not preserved some housing units with CDBG-DR funds.
Other counties, such as Larimer and Weld, also used their CDBG-DR funding to build dedicated affordable housing units for displaced people following the 2013 floods.
Larimer County spent over $3 million of its disaster recovery funds to support the construction of 246 dedicated affordable housing units across three projects. Those projects include a 126-unit complex called Oakridge Senior in Fort Collins for seniors a 72-unit apartment building called Village on Redwood in Fort Collins that supports families earning between 30% and 60% of the area’s median income, and a 48-unit building in Estes Park called Falcon Ridge.
The housing authority in Loveland, Colorado—located in Larimer County—also spent roughly $7 million to help disaster-impacted households with homebuilding or repair costs. The agency gave households up to $100,000 in grants or zero-interest loans that were deferred until the properties were sold. Households could also request up to $50,000 in down payment assistance if they needed to buy a new home following the flood.
Another $5.5 million of the county’s disaster funding was spent on projects that helped flood-impacted families regain access to their homes. These projects included repairing roadways, bridges, and other infrastructure.
Weld County also spent a significant portion of its disaster funding on new housing and infrastructure upgrades. For instance, the county contributed funding to two affordable housing developments. One was the 47-unit Guadalupe Apartments in Greely, which serves formerly homeless individuals. Another was the Windsor Meadows II in Windsor, a 36-unit complex for households earning between 30% and 60% of the area’s median income.
The county also received over $20 million in disaster-related funding from FEMA, which was spent on rebuilding damaged roadways and stormwater systems.
Despite its broad impact, CDBG-DR funding is temporary and relies on congressional reauthorization. Drew hopes Congress will make the program permanent to ensure disaster-impacted communities receive the help they need.
“Regardless of who’s in power, disasters will continue to happen,” Drew says. “They will continue to get stronger and cause more and more damage. It’s clear. It doesn’t matter what color tie you’re wearing to know that it needs attention.”
This story was produced by Next City, a nonprofit newsroom covering solutions for equitable cities, and reviewed and distributed by Stacker.
