Catastrophic floods wreaked havoc in eastern Kentucky last July, killing 44 people and requiring 1,334 more to be rescued by boat and helicopter. The floods also destroyed or seriously damaged thousands of homes. Analysis from experts who live and work in the flood-damaged areas shows that local resources, philanthropic aid and federal disaster relief will be deeply inadequate to address the enormous resulting housing need.
The Kentucky legislature held a special session to allocate state dollars for aid in August, but did not include monies for permanent housing, an essential component of a healthy recovery. Given the scale of the destruction and what we know about available resources, the General Assembly should direct significant aid for housing this session in order to start work creating safe future living conditions out of one of the worst disasters in state history.
Scale of damage from floods was massive
Approximately 14 to 16 inches of rainfall hit parts of eastern Kentucky on July 28, 2022, especially harming Clay, Leslie, Perry, Breathitt, Knott and Letcher counties. The North Fork of the Kentucky River rose 18 feet in 10 hours, rising 11 feet above flood stage.
The Kentucky Geological Survey identified more than 1,000 new landslides and debris flows resulting from the rainfall. Flooding destroyed 100 bridges and thousands more required inspection, while roads, water treatment facilities and communications infrastructure were also damaged. Past mining likely increased the flood damage according to Mary Cromer of the Letcher County-based Appalachian Citizens Law Center. Surface mining can increase peak runoff events during storms due to lack of vegetation, and water coming from underground mines can cause landslides as well.
The flooding was particularly devastating for housing. Even prior to the floods, “we had a housing crisis,” said Scott McReynolds, executive director of the Perry County-based Housing Development Alliance. He estimates that at least 40% of the population was already inadequately housed, including “living in places not designed for human habitation and living in substandard housing.” The July floods destroyed 393 homes, made 8,304 uninhabitable without repairs, and damaged 13,833, according to Eric Dixon with the Ohio River Valley Institute (ORVI). In the hardest hit counties, more than one in seven homes took on at least one inch of water. McReynolds puts the estimated cost for housing needs from the floods at more than $600 million.
Available resources are not adequate
Multiple financial challenges make addressing the housing crisis practically impossible without state aid. First, those harmed tend to have very low incomes. Of the people applying for Federal Emergency Management Agency (FEMA) aid, 54% have a household income of less than $30,000 and more than one in four make less than $15,000, according to ORVI. A full 57% of the houses destroyed were mobile homes, and children and seniors make up 40% of the population in households seeking aid. Most of those harmed have little in the way of personal financial resources to draw on in obtaining new housing.
Insurance is of little to no help in these circumstances. Homeowners’ insurance, which is required for people who have mortgages, covers tornadoes like those that hit western Kentucky in 2021 but not floods. For that, people must buy special flood insurance, but such coverage is rare due to outdated maps and a broken federal program, as well as high costs. Only 4% of those harmed by the eastern Kentucky floods had flood insurance, with very few living in what had been identified as a floodplain.
FEMA aid is also available, but award amounts are small compared to housing replacement costs, which are rising because of currently-high inflation. The median amount received in eastern Kentucky is only $5,099, with the average household receiving $10,937. The median home in the area, in contrast, is worth $73,393. In addition, an estimated 35% of homeowners in the impacted counties owed a mortgage or similar debt on their existing home that may need to be paid in addition to the cost of acquiring a new home. FEMA has also begun a buyout program, although only a small number of properties have been awarded funds thus far.
The Kentucky legislature met in August, and appropriated $212.6 million in disaster aid for the floods. But while the package included needed resources for emergency management, highways, schools, local governments, utilities and water and sewer infrastructure, there was no money earmarked for permanent housing.
Philanthropic resources are also far too modest to address the cost of building and repairing thousands of homes. Helpful post-flood fundraising efforts have generated new resources, but they fall far short of the need. The Team Eastern Kentucky Flood Relief Fund operated by the state has raised just $13 million, the Foundation for Appalachian Kentucky awarded $5.3 million through October, and the Kentucky Sports Radio-Kentucky Chamber Eastern Kentucky Flood Relief Fund raised $206,174.
Additional aid is also hoped for eventually from Congress through the Community Development Block Grant-Disaster Relief (CDBG-DR) program. However, those amounts will not come close to filling in the full gap, and will take a while to receive based on Kentucky’s experience following prior flooding in eastern Kentucky and the western Kentucky tornadoes. The federal government took many months to provide $124 million to recover from those disasters, an amount that was $78 million less than the $202 million in remaining unmet need identified by the state. The scale of the destruction is much larger from the 2022 eastern Kentucky floods than those disasters, and the inability of homeowners’ insurance to help cover housing costs is a factor that distinguishes it from the western Kentucky tornado damage.
McReynolds said the “The Great Recovery Gap”— the difference between what private, philanthropic, local and federal resources can provide and the housing need — amounts to hundreds of millions of dollars.
Waiting creates problems, and the legislature has the resources to move EKY forward now
While those who lost housing wait, McReynolds said people are living in temporary housing like a FEMA trailer; doubling up with family members or friends; living in unsafe, flood-damaged homes; or homeless. They face undesirable options like converting storage sheds to makeshift tiny homes; putting mobile homes back where old ones were washed away; paying rent they can’t afford; or leaving the region and thus family, work and community ties.
Waiting for new housing is also a problem because rebuilding is a special challenge in eastern Kentucky and work must begin now. Relocation is necessary in many cases because prior home sites are no longer safe, and there is a need to fortify homes of those who do not relocate. Building houses requires planning and pre-development work for which funding commitments are needed in order for work to begin. Identifying and preparing sites is also particularly challenging given the topography of eastern Kentucky, the threat of future floods, corporate ownership of higher ground, and the legacy issues around prior mining and other land use.
Housing nonprofits including the Homeless and Housing Coalition of Kentucky and Fahe have developed a proposal they call AHEART: A Comprehensive Housing Recovery Strategy. The proposal asks for $150 million a year from the legislature in 2023 and 2024 to jump start and sustain disaster housing efforts. They state that this funding will not duplicate federal funding tools and resources, and will allow them to leverage other resources.
Thankfully, the Kentucky General Assembly has ample resources it could commit now to help fill the enormous funding gap. Federal pandemic aid stimulated a fast economic recovery from the COVID-19 recession, and the state has built up a rainy day fund balance totaling $2.7 billion, a number expected to grow substantially with large surpluses currently projected for this fiscal year and next year.
Helping fill the gap with significant resources would take only a fraction of those dollars and is a sensible use of one-time resources. And most importantly, through such action the legislature could bring hope to thousands of Kentucky families for a safe place to live and a way to begin moving beyond last year’s calamity.