Funding Tools for Natural Resilience

There are a wide variety of federal, state, and local funding tools available to cities to implement equitable natural resilience solutions.^{See footnote 1} As many local governments have limited budgets and capacity — particularly in this time of economic recession resulting from COVID-19 — it is important to understand the many environmental, public health, economic, and other social co-benefits of natural resilience projects and initiatives.^{See footnote 2} In some cases, identifying these co-benefits may help to open up new sources of funding as well, such as programs for transportation and street design, habitat and conservation programs, water quality programs, disaster recovery and hazard mitigation grants, and more. This section focuses primarily on funding and technical assistance programs with a few financing tools included; however, more information on tools available can be found in the Funding and Financing chapter of the Toolkit.

Considerations of Funding Tools for Natural Resilience

Federal Programs

Local governments can make use of a range of federal formula and competitive grant programs for natural resilience investments that focus on equitable outcomes. In particular, programs through the U.S. EPA, the Department of Housing and Urban Development (HUD), the Federal Emergency Management Agency (FEMA), the U.S. Department of Agriculture, and even the U.S. Department of Transportation (DOT) can be utilized; these include programs with primary purposes designed to reduce pollution and improve water quality, provide flood or hazard mitigation benefits, implement green infrastructure or natural infrastructure solutions, restore habitat, and green urban areas. Examples of more common urban-focused programs that might be utilized are summarized below. Communities can learn more about the past and current funding status of many of these programs using the Catalog of Federal Domestic Assistance.^{See footnote 3}

• EPA Building Blocks for Sustainable Communities: This program provides targeted technical assistance to help communities implement solutions to mitigate flooding, promote equitable development, improve public health, and improve sustainability, among other benefits. Government entities and non-profit local government partner organizations are eligible to apply for the assistance.
• EPA Greening America’s Communities Program: Greening America’s Communities (formerly known as Greening America’s Capitals) provides technical assistance to help design green infrastructure and sustainable design solutions for neighborhoods.This program was leveraged to support greening efforts in Portland, Oregon’s Jade District, as summarized in the case study below.
• EPA Urban Waters Small Grants Program: This program provides funding to communities to improve urban water quality with green infrastructure practices while simultaneously stimulating neighborhood revitalization, focusing in particular on underserved communities, which are defined as “communities with environmental justice concerns and/or susceptible populations.” Governmental entities, universities, and nonprofit organizations are eligible to apply.
• HUD Community Development Block Grants: The CDBG programs supports communities’ development needs, and CDBG funds must principally (70% or more) benefit low- and moderate-income persons. CDBG funds are flexible and can be used for a range of purposes, such as property acquisition and green infrastructure installation; funds can also be used as non-federal match for other federal programs requiring state/local match. The funding is distributed to larger “entitlement” cities on a formula basis, and to smaller communities through a state-administered program.
• USDA Urban and Community Forestry Program: This U.S. Forest Service program aims to promote forest health and enhance community resilience in both urban and rural communities through information and technical assistance. One of the program’s strategic focus areas (as outlined in the 2016-2026 Ten-Year Urban Forestry Action Plan) is Diversity, Equity, and Leadership, with program goals including engaging underserved communities in urban forestry efforts, increasing workforce development opportunities in community forestry, promoting expanded collaboration, and more. To promote the goals underlined in its Action Plan, the U.S. Forest Service provides grants under its National Urban Forestry Challenge Cost Share Grant Program.
• DOT Transportation Alternatives Program: “The Transportation Alternatives Program (TAP) is administered by the U.S. Federal Highway Administration (FHWA) and can be used to pay for green infrastructure projects integrated into transportation improvements, including trails and sidewalks with permeable pavement. It can also be used to mitigate environmental impacts from transportation, including for green infrastructure projects that help to manage stormwater or abate water pollution from highway construction or run off.”
  

Other programs that have been utilized to fund greening improvements include DOT’s BUILD (formerly known as TIGER), DOT’s Congestion Mitigation and Air Quality Program, EPA’s Section 319 Nonpoint Source Program, and FEMA’s Hazard Mitigation Grant Program.

State Programs

States can utilize a variety of grant programs that they administer for the purposes of equitable natural resilience investments. These include programs ranging from transportation funds to wildlife and conservation funds to environmental protection program funding. To generate new dedicated funds for natural resilience, states can authorize the sale of bonds (though this generally requires legislative action and/or voter approval),^{See footnote 4} and state legislatures can appropriate funds for existing programs or authorize new programs through legislation to fund local greening or natural resilience improvements.^{See footnote 5} In some states these programs have integrated requirements to set aside portions of the funding for disadvantaged and frontline communities, or otherwise have included criteria in the grant guidelines that aim to prioritize applications that will result in greening investments in communities lacking greenspace, communities with higher proportion of health challenges like asthma, and low-income communities. For example, Massachusetts’ House Bill 4835 (2018) authorized over $2.4 billion for adaptation, environmental protection, greenspace and recreational initiatives, including allocations specifically for parks in underserved neighborhoods to advance environmental equity and community engagement. California’s Greenhouse Gas Reduction Fund, established through AB 1532 in 2012, gathers auction proceeds from the state’s cap-and-trade program, which are then appropriated by the legislature to various programs administered by state agencies for the purpose of funding projects that help reduce emissions and achieve other goals. The state appropriated over $11 billion through fiscal year 2019-2020 for projects and administration of over three dozen different programs, cumulatively referred to as “California Climate Investments.”^{See footnote 6} One of the three overarching priority areas for these investments is natural resources and waste diversion, which covers programs such as climate adaptation and urban greening, which is summarized in the case study below.^{See footnote 7}

Local Programs

Local governments can fund natural solutions through municipal budgets, different types of permitting fees, utility fees, and by issuing bonds. These approaches each come with administrative and legal benefits and drawbacks; for example, going through the municipal budget (e.g., capital improvements budget) to fund equitable greening initiatives may be preferable because the structures are already in place to gather and distribute the funding, whereas creating a new fee system (e.g., development impact fees, tree funds and permitting fees, or stormwater utility fees) may face legal hurdles depending on the scope of local authority and how the program is designed (e.g., to ensure that it is considered a fee as opposed to a tax). However, relying on the general fund for these efforts can be challenging as there are many other local priorities competing for funding that could cause greening initiatives to be cut; in contrast, a stormwater fee, for example, provides a consistent and predictable source of funding over time. Local governments may also have the option of issuing municipal bonds to fund natural resilience initiatives and improvements, but this will depend on the scope of authority granted by the state, including whether local governments can issue bonds and the types of projects and activities that can be financed through local bonds (e.g., whether maintenance of green infrastructure installations is an eligible expense).