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Wednesday 12 December 2018
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Puerto Rico Awarded $18.5 Billion in HUD Funding

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After September’s Hurricane Maria, Puerto Rico is still struggling to rebuild its housing stock and infrastructure. But thanks to the U.S. Department of Housing and Urban Development, Puerto Rico will receive $18.5 billion to make necessary repairs.

According to HUD undersecretary Pamela Patenaude, this funding is the largest grant the HUD has ever given. However, this grant still falls short of the $46 billion Governor Ricardo Rosselló originally requested in November.

Puerto Rico isn’t the only area getting help from the HUD. The organization is giving approximately $28 billion to nine states, including California, Florida, Missouri, Georgia, Texas, North Carolina, South Carolina, Louisiana, and West Virginia. Local governments in these states will be receiving additional funding, and the Virgin Islands and Puerto Rico will receive funding as well. This money is to help those areas still recovering from Hurricanes Irma, Harvey, and Maria as well as the wildfires in California.

These grants are part of a disaster aid package signed by President Trump in February. The package totals $90 billion and is meant to be spread around to areas that need it most. Of the HUD disaster recovery funds, $1.6 billion will be going to the Virgin Islands.

Puerto Rico is currently dealing with the largest bankruptcy in U.S. history. In total, creditors are owed $120 billion in bond and pension debt. Fortunately, the U.S. is the second largest construction market worldwide, having a market share of 10%. Governor Rosselló is expected to adjust Puerto Rico’s fiscal turnaround plan in order to match the full grant. This plan is meant to help put economic projections in place to serve as a starting point for upcoming restructuring talks.

The announcement of the award was made in a low-income community in Canóvanas. This area, Villa Hugo, was hit hard when Maria touched down this past September. Many of the 6,000 residents in Villa Hugo do not own titles to their properties and built their homes informally.

It’s estimated that one-fourth to one-half of Puerto Rico’s 1.2 million homes were informally constructed. With the widespread presence of informal housing, it’s possible that this type of building made the hit to Puerto Rico’s housing stock worse after the storm.

Even before the storm, Puerto Rico suffered a struggling economy, with a poverty rate reaching almost 50%. The island now expects to receive about $50 billion over the next few years to aid with disaster relief. These funds will be used for housing, economic development, and to repair the island’s immobilized power grid.