ReBuild NC must increase pace of home completions or risk losing federal disaster funding

ReBuild NC’s homeowner recovery program has finished only 25% of the houses damaged by Hurricane Matthews and Florence, a pace that, if uncorrected, could jeopardize its federal funding. Roughly 4,700 applicants have been approved for new or rehabbed homes, state data show. Of those, just 1,118 are finished. Robeson County’s program accounts for 201 of those completions, which occurred in 2018 and 2019.

With a backlog of nearly 3,600 homes, contractors for ReBuild NC must finish 89 homes per month over the next three years or risk losing a portion of the $800 million in disaster relief funds the agency received from the U.S. Department of Housing and Urban Development.

For Hurricane Matthew, the deadline to is mid-2025; for Hurricane Florence, it’s mid-2026.

State lawmakers have introduced Senate Bill 438, which they hope will expedite the process of returning people to their homes; some have been living in one-star motels for more than three years. As NC Newsline reported, the legislation, filed in March, seemingly targets Rescue Construction Solutions. The Raleigh-based firm won the largest share of the bids, but has fallen far behind in doing the work.

NC Newsline has published more than 20 stories over the past year investigating ReBuild NC’s mismanagement of its homeowner recovery program. Rebuild NC is also known by its formal name of the NC Office of Recovery and Resiliency.

Today, Blake Belch, an evaluator with the government operations committee investigating ReBuild NC, presented the details of SB 438 to the Senate Judiciary Committee.

In addition to prioritizing low-income and elderly applicants, as well as those with disabilities, the bill would rein in contractors who bid on too many projects. For example, Rescue Construction bid and was awarded a modular home contract for 226 homes. As of February, it had finished just 20.

To prevent what Belch called “hoarding,” the bill would not allow a contractor to have more than 75 projects at one time.

ReBuild NC has 50 qualified general contractors — far more than the half dozen it had last fall. But three of those contractors account for two-thirds of the work, Belch said.

Construction projects routinely blow past deadlines, and ReBuild NC has not enforced timelines that are clearly stated in official contractor manuals. Instead ReBuild NC routinely granted extensions or failed to issue “Notices to Proceed” that would start the clock on contractors. By delaying an NTP, as they’re known, ReBuild NC allowed the contractors to avoid being penalized for late work.

If a contractor has not started a home within 45 days of receiving a project, the bill allows ReBuild NC to cancel and reassign it. The bill would still allow Rebuild NC Director Laura Hogshead to grant a 45-day extension in case of extreme weather. But additional extensions would have to be approved by the Department of Public Safety Secretary Eddie Buffaloe. (ReBuild NC is housed under DPS.)

Even when ReBuild NC assessed penalties, they had no teeth. They were merely a reduction on a contractor’s “scorecard,” whose metrics seemed to change without explanation. ReBuild could have assessed damages of $250 a day for overdue projects, as the contractor manual states, but never did so until February. That’s when Rescue Construction was penalized $4,000.

In some cases, floor plans changed drastically — either much larger or smaller than the original size of the home. The bill would limit that leeway to 5%.

The pace of completions peaked at 69 this past February, the same month Richard Trumper was hired as a senior adviser to ReBuild NC. In March, the figure was 56.

In May 2020 the program reported 36 homes were completed that month, but that figure slumped to just five homes in July 2022. After the first government oversight committee last September, the number steadily increased.

ReBuild NC closed applications for its Hurricanes Matthew and Florence homeowner recovery program on April 21.