More than $4 billion in federal disaster recovery funding is now flowing to Florida communities to help them recover from 2023–2024 storms, reshaping local budgets and recovery efforts from Fort Myers, to Cedar Key, to Tallahassee. The allocation of these funds is testing how well state and local governments can turn federal aid into real recovery. So far, early spending plans show a clear pattern: jurisdictions are investing the most funds into public infrastructure recovery, shifting the financial burden of addressing unmet recovery needs onto households and local businesses, where recovery depends on savings and private credit rather than public support.
The arrival of the money came with hard choices. Federal allocations covered only a fraction of the documented unmet need, forcing state and local governments to decide how to distribute limited funds across housing, infrastructure, and economic recovery. How those choices were made — and who benefits — tells us a lot about Florida’s recovery system and its limitations.
Infrastructure Comes First
Public infrastructure is the dominant focus among the 12 jurisdictions that have received Community Development Block Grant–Disaster Recovery (CDBG-DR) funds for the 2023–2024 storms and have also published Action Plans. On average, jurisdictions met just 18 percent of their housing unmet needs and 4 percent of their economic recovery unmet needs through CDBG-DR funds, as compared to 55 percent of their public infrastructure needs.
Some jurisdictions went even further. Florida Commerce, the state agency overseeing $925 million in CDBG-DR funding, funded infrastructure projects at 290 percent of its documented unmet need — nearly triple what was needed to close the gap — while leaving major housing needs unaddressed. In contrast, Pasco County and Hillsborough County committed a larger share of their resources to housing, covering 28 percent and 36 percent of their unmet housing needs, respectively.
Other jurisdictions invested far fewer resources in housing. Sarasota County had an estimated $2.1 billion in unmet housing needs, but its allocation only met 3 percent of housing needs, while St. Petersburg met just 8 percent. Economic recovery funding was minimal; several jurisdictions — including Florida Commerce, Volusia, Sarasota, and St. Petersburg — did not allocate any funding towards small-business or workforce recovery.
That lack of attention to economic recovery has real-world consequences. In Cedar Key, a small coastal community under the auspices of the Florida Commerce’s CDBG-DR Action Plan, residents have gone more than 13 months without a grocery store after Hurricane Helene destroyed the town’s only market. Local officials have repeatedly asked the state for economic recovery assistance to reopen the store and support small-business recovery, but no such funding has been made available. Meanwhile, the local aquaculture industry — more than 90 percent of Florida’s clam production comes from Cedar Key — lost nearly all of its 2024 crop due to storm surge. Without targeted recovery funds, the community faces not just a lack of accessible groceries but also a collapse of businesses and mounting personal debt.
In general, there is a clear pattern; Florida’s disaster recovery system remains geared toward rebuilding public infrastructure — debris removal, roads, drainage, utilities — while leaving low- and moderate-income households to compete for a narrow pool of recovery dollars and forcing small businesses to shoulder much of the financial cost of recovery on their own.
Housing Recovery Dollars: Not Enough, Yet Far More Than Local Jurisdictions Allocate
Even with those imbalances, the 2023–2024 CDBG-DR housing allocations represent an extraordinary level of funding compared to what local governments typically spend on affordable housing and disaster resilience.
- Pasco County committed $100 million to new affordable rental construction — the county’s largest single affordable housing investment on record.
- Pinellas County’s $57.9 million small-rental rehabilitation program, which is just one part of its larger $599 million housing recovery program, is larger than the County’s annual housing budget.
- St. Petersburg ($48 million), Hillsborough ($60 million), and Sarasota ($30 million) each launched or expanded new multifamily housing initiatives.
These amounts far exceed other federal affordable housing funding sources. Florida receives roughly $39 million a year in Low-Income Housing Tax Credit (LIHTC) allocations — the main federal tool for affordable housing production. A single CDBG-DR housing program in one county can surpass many years of statewide LIHTC funding, and, overall, the 2023–24 CDBG-DR housing allocations are 54 times larger than the state’s average annual LIHTC funding.
The storms also deepened the affordable housing crisis in Florida. Across the Tampa Bay region, hurricanes Helene and Milton flooded or destroyed thousands of lower-cost homes and apartments — especially in neighborhoods like Bartlett Park in South St. Petersburg, where first-floor units were left uninhabitable and families on fixed incomes have struggled to relocate. In the months that followed, investors snapped up many of the storm-damaged properties, with LLCs buying more than a quarter of all homes sold in heavily flooded areas of Hillsborough and Pinellas Counties. As older, affordable units are demolished and replaced with higher-priced homes, low-income renters face displacement and few options to return. Without deliberate reinvestment, even large infusions of CDBG-DR dollars risk reinforcing the same housing inequities that leave many Floridians most vulnerable to disaster. However, with the right design, these funds could also serve as the foundation for a stronger, fairer recovery system.
Big Money Doesn’t Mean Fast Recovery
Despite their size, these state-run recovery programs move slowly. Families often wait years for assistance as dollars pass through multiple layers of contractors, consultants, and procurement systems.
The National Low Income Housing Coalition notes that this complex, opaque, and heavily outsourced pattern often deepens inequality. Renters and low-income homeowners, who have the least ability to self-finance repairs, are the least likely to see timely relief.
Florida Policy Institute has recommended a simpler model: a direct homeowner reimbursement program that would allow households to apply for funds to rebuild or repair their homes. This approach — which has been used successfully in other states and employed by Volusia and Pinellas Counties — could speed recovery, reduce administrative costs, and limit the profit margins private contractors take.
Why Affordable Housing Finance Matters
However, there are more effective and efficient solutions. Understanding the opportunity — and the risk — of CDBG-DR funding requires examining how affordable housing is financed in the first place.
U.S. affordable housing production depends overwhelmingly on limited federal subsidies, such as the Low-Income Housing Tax Credit. Since those credits are capped annually by Congress, local housing agencies have few options to scale development when costs surge or when disasters strike.
Some jurisdictions are beginning to change this, as a new wave of public development and revolving loan fund (RLF) models stretches scarce dollars further to establish permanent financing sources for affordable housing development. For example, in Montgomery County, Maryland, the local housing authority created a $100 million Housing Production Fund that provides low-cost construction loans to public developers. The loans revolve, meaning that repayments finance the next project and, in turn, create a self-sustaining source of affordable housing capital.
States like Michigan, New York, and Utah are already following suit, launching revolving loan funds to finance mixed-income and affordable housing projects. These programs show how jurisdictions can turn one-time public dollars into lasting development capacity.
A Missed Opportunity — and a Path Forward
Florida’s disaster recovery funds could do the same. Instead of flowing entirely into infrastructure contracts or one-off housing projects, a portion could be used to capitalize local revolving funds that finance affordable housing construction long after the disaster cycle ends.
Such funds could help counties build and preserve affordable homes without depending exclusively on private equity or federal tax credits — both of which drive up costs and limit affordability. They would also align with the Housing and Urban Development’s goal of “long-term resilience” by creating permanent public financing capacity within local governments to preserve and rebuild affordable housing after storms.
In short, disaster dollars could become seed capital for public development, not just emergency repair.
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Notes
1Florida Policy Institute’s calculations of CDBG-DR Action Plan allocation amounts as a percentage of documented unmet need.
2See page 57 of the Action Plan.
3The U.S. Department of Housing and Urban Development’s Community Development Block Grant Disaster Recovery (CDBG-DR) Universal Notice explicitly authorizes jurisdictions to use CDBG-DR funds for a wide range of eligible housing activities, including “new construction, rehabilitation, and financing mechanisms” consistent with title I of the Housing and Community Development Act (42 U.S.C. 5301 et seq.) and 24 CFR part 570. The Notice further clarifies that grantees may “establish programs to distribute grant funds” using direct implementation or financial assistance models such as loans or subgrants, provided that each activity meets a national objective and is tracked in HUD’s Disaster Recovery Grant Reporting (DRGR) system. In addition, the Universal Notice incorporates the regulatory provisions at 24 CFR 570.489(f) and 570.500(b)—carried forward from the State and Entitlement CDBG programs—which expressly permit the creation and reuse of revolving loan funds and require that loan repayments be treated as program income and reinvested in other eligible activities. Collectively, these provisions confirm that jurisdictions may capitalize revolving loan funds or other public financing vehicles with CDBG-DR dollars so long as the funds are used for eligible housing or economic-revitalization purposes, benefit low- and moderate-income residents, and comply with HUD’s financial-management and reporting requirements.
