Hurricane Katrina has resulted in the displacement of tens of thousands of families from theirhomes. While its magnitude is unprecedented, the resulting need to shelter and house displacedfamilies is not. The Department of Housing and Urban Development (HUD), the nation's agencywith a mission to provide safe and decent housing for all Americans, has played a role in meetingthose needs in the past and is playing a role in the wake of Katrina. This report is designed to lookat HUD's current programs and their ability and authority to respond to housing crises, and the waythat Congress has expanded that role and authority in the past. It does not track the Department'sresponse to Hurricane Katrina; see CRS Report RS22358 , HUD's Response to Hurricane Katrina ,by [author name scrubbed], [author name scrubbed], [author name scrubbed]. Before looking at existing housing resources, it is useful to think about the housing needs thatemerge after a disaster. Research by E.L. Quarantelli (1) identified four major stages of housing need following a disaster: emergency shelter, temporary shelter, temporary housing, and permanent housing. Emergencyshelter is designed to provide a safe location during or immediately after a disaster. In the case ofHurricane Katrina, people sought emergency shelter on roofs and overpasses, for example. Temporary shelter is one stage beyond emergency shelter, and while it lasts longer than emergencyshelter, families are generally not able to establish day-to-day routines during their stay. Temporaryshelter includes mass shelters that provide food and sleeping accommodation, and homes temporarilyshared by friends or family. Temporary housing is housing that is unique to a family and allowsthem to begin to establish day-to-day routines, but is not seen as permanent. It can last for monthsor even years, and examples include the temporary trailers often made available while damagedhomes are undergoing repair. Permanent housing is a familiar concept and can include families'return to their former residences, new residences in or near their original communities, or permanentrelocation in another community. While most aspects of emergency response are led and organized at the state and local level,the federal government provides resources to aid their efforts. (2) The Federal EmergencyManagement Agency (FEMA) generally provides assistance to meet all four states of shelter andhousing need, as authorized under the Robert T. Stafford Disaster Relief and Emergency AssistanceAct ( P.L. 93-288 ). FEMA helps localities designate evacuation areas to provide emergency shelter,and it coordinates with municipalities and organizations such as the American Red Cross and othercharitable organizations to establish temporary shelters. FEMA also provides, in conjunction withstates and municipalities, temporary housing options including rental assistance payments --sometimes under contract with HUD (3) -- that allow families to find temporary accommodation in theprivate rental market as well as temporary physical structures, such as trailer homes. Finally, FEMAalso provides loans and grants to help families repair damaged homes. (4) While FEMA is the primarydisaster response agency, other federal agencies also contribute housing resources, including theDepartment of Commerce (the Small Business Administration, primarily), the Department ofAgriculture (the Rural Housing Service), the Treasury (various tax programs and incentives,including the Low Income Housing Tax Credit (LIHTC)), and HUD, the agency that is the focus ofthis report. (5) Furthermore,a large majority of the restoration and creation of permanent housing is met through the use ofprivate and public insurance. (6) In responding to disasters, HUD generally focuses on aiding families in the final two stagesof housing need; temporary and permanent housing. HUD's programs and assistance in response todisasters fall generally into one of three categories: direct assistance, flexible block grants to statesand localities, and mortgage programs. One primary form of direct assistance provided by HUD is rental assistance provided throughthe Section 8 Housing Choice Voucher program. (7) Section 8 vouchers are used by low-income families to reduce theirhousing costs in the private market to an "affordable" level. (8) Families with vouchers pay30% of their incomes towards rent and the federal government pays the difference between thefamilies' contributions and the actual rent, up to a limit. (9) In order to be eligible, families must be very low income, (10) however,75% of allvouchers are statutorily targeted to extremely low income families. (11) The subsidies are portable,meaning families can move anywhere in the country with their vouchers. The program isadministered at the local level by quasi-governmental Public Housing Authorities (PHAs), andCongress currently funds approximately 2 million vouchers. In FY2005, Congress provided almost$15 billion for the voucher program. Another form of direct assistance provided by HUD is low-rent public housing. Very lowincome families are eligible to live in one of the nearly 1.2 million units of public housing ownedand maintained by local PHAs. Families living in public housing pay 30% of their incomes towardstheir housing costs, and PHAs receive two streams of federal subsidies -- operating funds and capitalfunds -- to help make up the difference between tenant rents and the costs of maintaining theproperties. Operating funds are used to help cover day-to-day expenses including utilities, socialservices, staff and security. Capital funds are used to meet modernization needs, such as buildingrepair and refurbishment. In FY2005, Congress provided approximately $2.5 billion each to thecapital and operating funds. (12) The final form of direct assistance provided by HUD is a hybrid between vouchers and publichousing, called project-based rental assistance. The primary project-based rental assistance programsare Section 8 project-based rental assistance, the Section 202 program for the elderly, and the Section811 program for the disabled. In all three programs, private landlords own and manage housing unitsfor which the rent is subsidized by the federal government. Families who live in the units payroughly 30% of their incomes towards rent and the federal government pays the landlord thedifference between the tenant contribution and the negotiated rent for the unit. Generally, thesebuildings are FHA-insured (see discussion of FHA insurance below). In FY2004, 1,309,427 unitsreceived project-based Section 8 rental assistance, 75,227 units received Section 202 rentalassistance, and 21,646 units received Section 811 rental assistance. In FY2005, Congress providedover $5 billion for project-based Section 8, over $230 million for Section 811, and over $740 millionfor Section 202. (13) HUD's direct assistance programs can be both affected by disasters as well as used as toolsin recovering from disasters. When public housing units are damaged, HUD can tap into an existingemergency capital reserve. For private owners of HUD-assisted units, insurance is often availableto cover damage, as are SBA loans and HUD loans (discussed below). HUD-assisted families displaced by a disaster retain their assistance. Displaced voucherholders are eligible to find another unit in which to use their vouchers. For public housing and otherproject-based assisted families, HUD identifies vacant HUD-assisted units to which they are eligibleto relocate. HUD can also provide resources to non-assisted households; in other words, households thatwere not previously receiving HUD housing assistance prior to a disaster. Vacant units of HUDdirect-assistance housing can be made available during a disaster for non-assisted households. Inthe past, Congress has also created special emergency short-term vouchers that can be used toprovide temporary housing to displaced families. HUD administers a number of flexible block grant programs that provide funds to states andlocalities. The Community Development Block Grant (CDBG) program is the largest of these,funded at $4.9 billion in FY2005. CDBG funds are formula-allocated to states and localgovernments in support of 23 categories of eligible activities, including neighborhood revitalization,economic development, and housing activities. Seventy percent of CDBG funds must be used oneligible activities and projects that principally benefit low- or moderate-income persons. CDBGgrantees are not required to provide a local match. For more information on the use of CDBG fundsfor disaster recovery, see CRS Report RS22303, Community Development Block Grant Funds inDisaster Relief and Recovery , by [author name scrubbed]. The HOME Investment Partnerships Program provides formula-based block grant fundingto states, units of local government, Indian tribes and insular areas to fund affordable housinginitiatives. Eligible activities include acquisition, rehabilitation and new construction of affordablehousing as well as rental assistance for eligible families. Grantees must meet a 25% matchrequirement, and 90% of all assistance must primarily benefit families at or below 60% of the areamedian income. For both HOME and CDBG, grantees must submit consolidated plans detailinghow they intend to use funds to meet local needs. HUD also administers several other special purpose grants and block grants targeting specialpopulations, including the Native American Housing Block Grant, the Homeless Assistance Grants,and the Housing for Persons With AIDS grants. When communities are impacted by a disaster, HUD has the authority to waive manyregulatory requirements governing the use of HOME and CDBG funds. (14) Generally, HUD will issuesuch waivers and permit local communities to redirect HOME and CDBG funds to meet disasterrecovery needs, both short and long-term. Congress has also used CDBG, and, to a smaller extent,HOME, as vehicles for providing emergency funds to communities impacted by disasters.