More and more communities across the United States are being exposed to extreme weather and fossil-fueled climate disasters. In 2024 alone, 27 declared disasters caused over one billion dollars in damage. Growing physical risk from extreme weather is colliding with the nationwide shortage of affordable housing. A thoughtful and equitable reimagining of our disaster response and recovery system has never been more urgent. But the Trump administration’s dismantling of federal agencies and programs responsible for disaster response puts Americans everywhere at extraordinary risk and will hamper state and local government’s ability to prepare for and recover from disasters.
Cuts to HUD will hurt disaster recovery and affordable housing
The Trump administration has signaled that it plans to reduce the workforce at the Department of Housing and Urban Development (HUD) by half. One of the targets within HUD for layoffs is the Office of Community Planning and Development—a leaked document suggests 84% of the staff in the office will be terminated. Staff in that office run the Community Development Block Grants for Disaster Recovery (CDBG-DR) which support states and local governments to rebuild homes, public infrastructure, and fund economic development activities in areas where disaster has been declared. The Office of Community Planning and Development also administers the Continuum of Care program, which funds nonprofits and local governments in their response to homelessness—which is at a record high. Staff terminations will cause delays in these crucial programs.
Within a week of HUD Secretary Scott Turner’s confirmation, details about climate-specific research and programs have disappeared from the HUD website. Advocates are raising concerns about the agency’s failure to disperse the most recent tranche of funding for the Green and Resilient Retrofit program, which supports improvements to federally-financed, affordable apartments.
FEMA cuts harm communities pre- and post-disaster
The Trump administration has also announced significant layoffs and cuts to the Federal Emergency Management Agency (FEMA). FEMA has the sole mission to help people before, during, and after disasters. As my colleague Shana Udvardy notes, the agency needs both competent leadership and funding to accomplish its mission. Unfortunately, we are seeing the exact opposite right now.
Currently, FEMA is operating under an interim head who has little experience in emergency management or disaster response. Adding to that, recent layoffs to an already understaffed agency means decreased capacity to respond to increasingly frequent disasters. In addition to disaster response, risk reduction and resilience efforts also seem to be on the chopping block. FEMA’s Building Resilient Infrastructure and Communities and Flood Mitigation Assistance programs have obligated over 1.6 billion dollars nationwide in the last five years. Although both programs existed before the creation of the Biden administration’s Justice40 initiative, their designation as Justice40 programs in light of recent rollbacks raises questions about the continued funding despite enormous need for resilience investments.
A pattern of politicizing disasters
While the level of funding and personnel cuts may be unprecedented, the politicization of aid by President Trump is not. During his first term, Trump used the Office of Budget and Management (run then as now by Project 2025 architect Russell Vought) to delay obligated disaster recovery funding to Puerto Rico after Hurricane Maria in 2017. This weaponization of aid has continued into the second Trump administration, as evidenced by his threats to withhold aid to California after the January 2025 wildfires in Los Angeles, and FEMA acting administrator Cameron Hamilton’s refusal of Georgia Governor Brian Kemp’s request to extend the 100% federal cost share for continuing Hurricane Helene clean-up efforts.
Ripple effects of uncertainty in federal disaster funding
The politicization of disaster aid doesn’t just delay recovery and increase near-term risk, it poses longer-term threats to frontline communities. One such threat is the impact on municipal bond markets, which provide debt securities for state and local governments to finance everything from day-to-day operations to critical infrastructure investments needed for climate adaptation. Until recently, the municipal bond market has been slow to reflect climate risk, in part because of information gaps and in part because federal investments in disaster response and recovery can help reduce future risks and thereby ameliorate the negative impacts of these disasters on local communities’ creditworthiness.
Federal aid to state and local governments both directly increases resilience through disaster recovery grants, and indirectly by reducing the riskiness of municipal bonds through reducing climate risks to communities. The worst thing that could happen to communities hit by a climate disaster would be to then find their credit rating hit too, through no fault of their own. Investments in climate resilience pay off—for communities and for their ability to raise money through bond funding. Slashing disaster aid and resilience programs based on political whims will inject uncertainty into municipal bond markets that state and local governments simply can’t afford.
Rethinking local climate planning as defense
Already, state and local governments are mounting legal challenges to this administration’s rollbacks. Outside of the courts, state and local governments will need to take a more expansive view of planning for climate change, beyond emissions reductions. These expanded goals should be pursued with all available financing options before investor confidence in municipal bonds wanes drastically.
Investments in meaningfully affordable housing—from the building of new homes in less risky places to weatherization and upgrades to existing single and multi-family housing—will increase resilience. Policy changes should co-occur with investment. For example, adopting stronger building codes will help homes withstand increasingly severe storms, and developing tenant protection policies will ensure that well-intentioned investments in housing won’t inadvertently spur displacement. As property insurance premiums increase and put greater strain on homeowners and affordable housing developers, regulators on the state level could compel insurers to report more thorough data on rate increases and policy cancellations with the goal of moving towards risk reduction partnerships.
While state and local governments can play important defense against resilience policy and funding rollbacks at the federal level, they can do much more with the funding, strong standards, and technical assistance from the federal government. As the US Congress enters budget reconciliation, lawmakers should fight tooth and nail for agencies like HUD and FEMA, federal workers, and funding that communities across the country rely on.