Jun 16, 2026
An emergency preparedness advocacy group is sounding the alarm that potential reforms to the Federal Emergency Management Agency (FEMA) operations could leave victims on the hook for “a cumulative $1.5 billion cost burden” in the wake of hurricanes, floods, wildfires or other natural disasters.
Sabotaging Our Safety (SOS) — a group made up of emergency management experts including former FEMA employees — issued the warning following a recent report released by the FEMA Review Council to overhaul the agency’s operations.
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The FEMA Review Council was appointed by President Trump and includes Department of Homeland Security Markwayne Mullin and Secretary of Defense Pete Hegseth as co-chairs, along with multiple state-level officials. Trump has previously signalled his desire to “wean off FEMA” and “bring [disaster relief] down to the state level.”
“That $1.5 billion shortfall lands directly on state budgets, county emergency managers, and survivors who are already overwhelmed,” Rafael Lemaitre, an SOS advisory council member and former FEMA Director of Public Affairs, told Moneywise.
He added that cutting federal relief funding means that, following a disaster, “businesses might not ever be able to reopen, residents will be forced to move, and the tax base could erode further, making the next disaster even harder to survive.”
Proposed FEMA changes
According to 2022 Congressional Budget Office calculations, between 1992 and 2021, FEMA spent $347 billion in the wake of disasters to cover infrastructure, home and property repairs, debris removal and future disaster prevention projects. That includes disasters ranging from Hurricanes Katrina and Sandy to emergency measures during the COVID-19 pandemic.
The SOS analysis, however, points to concerning statistics cited in the FEMA Review Council report, including shifting the $1.5 billion in disaster relief away from FEMA to states and survivors and the fact that, under the Council’s recommended new threshold for disaster coverage, 29% of disasters that FEMA responded to between 2012 and 2025 wouldn’t make the cut for relief assistance.
For those disasters that do qualify, the Council report recommends capping payouts to affected homeowners at 15% of the assessed value of their home, up to $150,000.
Lemaitre notes, however, that “only those with the most expensive homes in the most expensive markets will get a full $150,000,” adding that the 15% cap “will leave many homeowners with overwhelming out-of-pocket costs needed to make their homes liveable again.”
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He also warned that the 15% would only go to those whose homes are “declared uninhabitable, not just damaged,” meaning “significantly fewer people will qualify for support.” Survivors, he added, may also have to absorb the cost of temporary housing while also rebuilding their home.
An analysis by the Federation of American Scientists (FAS) showed that the current FEMA home repair cap is $25,000. For someone with a home valued at $250,000, the 15% cap would deliver $37,000 — a significant upgrade. That said, they noted that the payment, under the Council recommendation, would have to cover “everything from home repairs to funeral costs” — which requires stretching the money further than the current FEMA payment.
The Harvard University Joint Center for Housing Studies found that, as of 2023, homeowners spent an average of $22,100 to repair their homes after a natural disaster.
For renters, the changes would mean FEMA covers up to six months total for housing “based on level of need.” Meanwhile, following Hurricane Helene, affected renters in North Carolina received an 18-month window of FEMA temporary housing and rental assistance, which was extended another six months in March.
The SOS noted that the Council’s proposal could also result in up to 60% decline in new flood insurance policies in low-income areas, while premiums could jump almost 280% — or more than $2,000 annually — in flood-prone areas.
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A Michigan Chronicle story added that Black people “are nearly twice as likely to be affected as other residents living in the same part of the country” when hurricanes hit, and that the dependence of lower income residents on FEMA assistance means the agency “often ends up playing a major role in the lives of Black residents after a natural disaster.”
Of course, some, like the FAS, noted positives in the Council report, including “streamlining the application process for disaster survivors, along with a focus on getting money to states and survivors quicker.” And most changes recommended in the report would require Congressional approval before taking effect.
FEMA replied to Moneywise’s request for comment, saying that the report “marked an important milestone in this Administration’s ongoing efforts to strengthen FEMA’s mission, operations and accountability” and that they “look forward to continuing to enhance our operations and engage with our state partners to best provide the federal support they need during disasters.”
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How homeowners can prepare for disaster
While no changes to FEMA are immediate, Loretta L. Worters of the Insurance Information Institute told Moneywise that “Americans can take meaningful steps today to strengthen their financial and physical resilience against disasters.”
That, she said, includes understanding their insurance policies and what they include when it comes to disaster coverage, fortifying their homes “to better withstand severe weather” and “create emergency plans, maintain home inventories, safeguard important documents, and build emergency savings where possible.”
The SOS’s Lemaitre added, however, that while advanced preparedness matters, “Extreme weather doesn’t discriminate, and the financial tools available to prepare for it — flood insurance, home retrofits, elevated construction — are expensive and largely out of reach for working families.”
The best disaster preparation, he said, “is a functional national response system.”
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Mike Crisolago is a Sr. Staff Reporter at Moneywise with nearly 20 years of experience working as a journalist, editor, content strategist and podcast host. He specializes in personal finance writing related to the 50-plus demographic and retirement, as well as politics and lifestyle content.
