Two decades ago, the levees broke in New Orleans during Hurricane Katrina, and the results broke our hearts. The storm exposed one city’s vulnerability to a hard-charging Category 3 hurricane and tragically upended the lives of the city’s most vulnerable residents. “This can’t happen in America” was a refrain we uttered for the first time, but not the last. The era of extreme weather had begun. 

Over the past year alone, tragic floods in Texas, Kentucky, and North Carolina shocked communities, and massive wildfires fueled by historic winds burned Los Angeles neighborhoods and gutted the Grand Canyon National Lodge. 
But Katrina did more than break our hearts in 2005; it exposed how government’s ability to prevent and plan ahead for future disasters was not sufficient to withstand what were considered “once-in-a-generation” disasters—now becoming far more frequent.  

New Orleans, despite it all, has come back with a vengeance—led by local perseverance, unprecedented philanthropic and federal funding, community-scale innovation, and a strong New Orleans Strong spirit anchored by local businesses and above-average rates of entrepreneurship.

Yet in the current atmosphere, where federal budget shortfalls in Washington, DC, and a rising insurance crisis threaten local rebuilding efforts, the road to recovery has become far more complicated, just as extreme weather disasters are increasing. The number of annual billion-dollar disaster events in the United States (adjusted for inflation) has increased 170 percent since 2014.  

As the federal government considers a wide range of ideas to improve disaster preparation, recovery, and response, we clearly need a new framework of shared responsibility—one that maximizes the impact of federal investment while harnessing frontline community expertise.

As the national system disaster response comes under active review by the Trump administration, the Federal Emergency Management Agency Review Council, key federal agencies, affected states, and Congress, we believe the time has come to organize around a new model that scales from the bottom up, incentivizes prevention and resilience best practices, and builds for the future.  

However, transitioning from federal management to local leadership will take time, collaborative partnerships, and resources to ensure that local and state governments can effectively shoulder new responsibilities for prevention, protection, rapid response, and long-term recovery. New approaches to catalyze resilient economic growth in underprepared communities, such as Opportunity Zones, Resilience Zones, and blended finance using municipal bonds, could help anchor next-generation policy that promotes resilient, public-private partnerships.
 

Making the Resilience Transition: Five Key Principles

We believe that there is an emerging national bipartisan consensus on the five pillars of a more effective resilience system:
 

Funding Transition Through Performance Block Grants and Other Financial Levers

Communities in recovery, at risk, or in economic distress cannot shoulder the responsibility for prevention, protection, response, and recovery without the tools, funding, and playbook they need to scale up local resilience. Local governments must be equipped to lead, and a refined federal recovery response could build local capacity by streamlining time-limited federal funding through a range of options, such as tax incentives in designated federal investment zones, data innovation to simplify federal program access for communities, performance incentives, and public-private partnerships.

Incentivizing Pre-Disaster Mitigation

Study after study shows how small investments in pre-disaster mitigation deliver strong value return. To incentivize these investments, we support three years of federal transition funding to promote the scale-up of proven local innovations.

Examples include the Rhode Island Infrastructure Bank and the Ohio Water Development Authority—local institutions that invest in “blue-sky days,” long before a disaster strikes. Private efforts, such as the work of The Resiliency Company, are already demonstrating how to use infrastructure financing tools to reduce future risk and leverage success at every stage of disaster preparation and recovery.

Innovating Recovery Assessment

Effectively scoping risk, estimating damage, and allocating disaster costs are essential to recovery and to protect taxpayers who often foot the bill for community shortfalls in disaster preparation. Innovative partnerships with local governments and technologists are helping communities quantify their exposure and understand the real costs of inaction. Data-driven approaches—like those used in Florida, Chaffee County, CO, and Providence, RI—are enabling smarter investments in reserves, insurance, debris removal, and post-disaster deployment, laying the groundwork for more strategic response and recovery.

Facilitating Disaster Response and Recovery

Disaster response and recovery often falter not for lack of will but for lack of liquidity and trust. Regional disaster recovery funds could be created, scaled, and replicated, giving every local government access to the dollars they need to respond in real time, provided their investments are accountable to defined performance metrics. Technical assistance, as well as transition funding, could help state and local governments capitalize on disaster recovery funds that are built to last by recycling capital into investible hazard mitigation projects in the years to come. Proactive thinking is also needed to ensure small businesses have the resources to recover from disasters, a critical economic resilience issue often overlooked, especially at the state and local level. For example, states could create a standardized post-disaster application, similar to the Free Application for Federal Student Aid, to streamline the post-disaster grant and loan application process for small business owners.  

Catalyzing Long-Term Recovery

As each disaster strikes, we don’t just want to build back—we want to build forward. New public-private partnership pilots are needed to demonstrate how to rebuild to insurer-approved standards that lower risk and improve insurability.

Precedents exist in the FORTIFIED program by the Insurance Institute for Business and Home Safety, which has motivated southeastern state and local governments and insurers to incentivize resilient roof installation on residential and commercial properties, or the National Fire Protection Association’s Firewise USA program, which recently enabled insurance discounts in California. Backed by private investors, insurance partners, and public support, models like these will pioneer a new approach to recovery that can maximize innovation and minimize long-term federal outlays. Another area of long-term opportunity is piloting efforts to designate disaster-affected areas as Resilience Zones to incentivize new private investment for community recovery. Special attention to preserving and enhancing small businesses is also recommended through the creation of regional networks of small business resource hubs. Philanthropic support to help affected communities access the capital and community they need to rebuild through the use of innovative tech platforms like the Milken Institute’s Community Infrastructure Center will also accelerate rebuilding from California to Kentucky.

A growing number of governments, financial institutions, insurers, philanthropies, and civic leaders stand ready to help build a new system that rewards proactive investment, accelerates community-led reforms, and reduces the long-term costs of disasters. What’s needed now is top-down federal leadership to scale up these bottom-up solutions to fortify national and community resilience.