Financing Climate Adaptation and Hazard Mitigation, Part 1: Federal Cuts Increase Bay Area’s Risks

This article is the first in a series examining climate adaptation and hazard mitigation financing at the federal, state, and local levels, including current funding gaps and innovative models to bridge them.
 

Hazard mitigation is a proactive approach to reduce or eliminate risks to lives, ecosystems, property, and infrastructure from natural hazards such as earthquakes, wildfires, extreme heat, sea level rise, and flooding. It can involve structural measures such as implementing resilient building codes, nonstructural measures such as developing early warning systems, and preparedness measures such as developing emergency plans or local hazard mitigation plans, which are required by the Federal Emergency Management Agency (FEMA) to access federal hazard mitigation assistance.

As the Trump administration chokes off FEMA funding, the State of California and local governments will be forced to fill financing gaps for efforts to mitigate seismic and climate change hazards. In the Bay Area alone, more than $270 million in federal funding for resilience and adaptation projects has evaporated since January.
 

FEMA’s Critical Role in Hazard Mitigation

FEMA is best known for stepping in after a disaster to provide emergency assistance, coordinate relief, and help communities rebuild. But FEMA also plays a critical, though less visible, role in hazard mitigation. Through the Hazard Mitigation Grant Program (HMGP), Flood Mitigation Assistance (FMA), and Building Resilient Infrastructure and Communities (BRIC) grants, FEMA has provided billions in funding to help states and local communities advance seismic retrofit mandates for privately owned buildings, firebreaks and habitat restoration in wildfire-prone areas, infrastructure upgrades for flooding, and more. HMGP and the BRIC program provide mitigation funding for all hazards, while the FMA program covers only flood mitigation for buildings insured by the National Flood Insurance Program (NFIP). FEMA’s hazard mitigation grants generally require a three-to-one cost share between the federal government and the state or local agency applicant.

The key differences in FEMA’s HMGP grants and BRIC grants are timing and approach to risk. HMGP is reactive, providing funding for hazard mitigation only after a major disaster has been declared; the BRIC program, which replaced FEMA’s Pre-Disaster Mitigation (PDM) program in 2018, represents a proactive shift in funding from disaster response and recovery to pre-disaster mitigation — funding infrastructure upgrades and resilience planning before communities are impacted. The launch of the BRIC program marked a significant evolution in federal risk reduction strategy, recognizing that preparing for disasters to minimize their impact is far more cost-effective and equitable than merely recovering after disaster strikes. According to a 2019 analysis by the National Institute of Building Sciences, developed in partnership with FEMA, every dollar invested by federal hazard mitigation grants (averaged across all hazards) saves an estimated $6 in future disaster costs.

The first Trump administration launched BRIC. The second Trump administration canceled all BRIC grant applications from fiscal years 2020 to 2023, returning undisbursed grant funds — totaling $3 billion — to the U.S. Treasury or the Disaster Relief Fund. This action pulled the rug out from under hundreds of projects already identified, scoped, and submitted by communities across the country. FEMA called the BRIC program “wasteful” and “politicized” and declared that it will return to its core mission of disaster recovery. Additionally, FEMA canceled the FMA grant for 2025 and has fired or otherwise lost one-third of its full-time workforce since January 2025, further straining its capacity for fund distribution.
 

FEMA’s Primary Hazard Mitigation Assistance Grant Programs

The fate of FEMA’s hazard mitigation assistance programs remains unclear. The proactive Building Resilient Infrastructure and Communities program was recently canceled, even though FEMA’s own research acknowledges that federal mitigation investments are highly cost-effective.

Source: SPUR.
 

Federal Funding for Climate Adaptation and Resilience

For California, the cancellation of BRIC is especially burdensome. In April, the Urban Institute put the figure for hazard mitigation funding at risk in California at $765 million — more than three times the figure for the next biggest potential funding loser, Utah. In June, the California legislature identified $870 million in BRIC-funded hazard mitigation projects that are now in limbo. Bay Area BRIC-funded projects that will now need to seek alternative funding sources include

• the SAFER Bay Project in Menlo Park for flood protection ($50 million)
• wildfire resilience investments in Napa and Sonoma counties ($70 million-plus)
• San Francisco’s Downtown Coastal Resilience Project ($50 million)
• the Oakland-Alameda Adaptation Committee’s Adaptation Project ($50 million)
• the Beach Boulevard Resiliency Project in Pacifica ($50 million)
   

Federal Funding for Earthquake Safety

Of the $870 million in canceled BRIC grants in California, about $100 million was dedicated to seismic resilience, including a $40 million grant to the California Earthquake Authority (CEA) for a seismic retrofit incentive program. This program, overseen by CEA and the Office of Emergency Services, aimed to accelerate retrofitting of “soft-story” multifamily buildings by providing grants to low- and moderate-income property owners, particularly in high-risk urban areas. With the BRIC grant, CEA could have retrofitted 750 to 1,500 apartment buildings statewide, protecting some 30,000 Californians. CEA is seeking alternative grants to launch this program.

Like BRIC, FEMA’s Hazard Mitigation Grant Program has also been thrown into uncertainty. Although the program has not been officially canceled, the Trump administration stopped approving new allocations in early April 2025. This development has led to major project and programmatic delays. For example, the City of San José’s Seismic Retrofit Program, reflecting a mandatory multifamily soft-story building retrofit ordinance passed in late 2024, had applied for $25 million in HMGP funding to offer retrofit grants to property owners housing low-income tenants (a program similar to CEA’s). That program is now on hold until at least April 2026 as the city waits to learn whether its application is approved. The fear is that HMGP may be permanently suspended. Like many jurisdictions, San José is trying to protect its most vulnerable residents from earthquake damage — a huge challenge without federal support.
 

Shifting the Hazard Mitigation Burden to States and Cities

The recent cuts to FEMA are not the only challenge. Many other federal agencies that play critical roles in hazard research and mitigation, such as the National Weather Service, National Oceanic and Atmospheric Administration, U.S. Geological Survey, and National Institute of Standards and Technology, have also seen budget and staffing cuts. Underlying these cuts is a deeper shift in federal posture. Increasingly, the federal government is signaling that states, cities, and local communities should take on more responsibility for hazard mitigation, despite lacking the revenue tools and capacity to do so amid a growing list of priorities.

Hazard mitigation is a national imperative. From wildfire defense in California to hurricane resilience in Florida, every state has a stake in strengthening infrastructure, protecting people and property, and avoiding massive recovery costs. The national economy is intimately intertwined with regional and local economies, and a disaster in one place will lead to economic impacts in another. This knock-on effect is the reason the federal government funded hazard mitigation in the first place. It has the scale, resources, and reach to support mitigation in ways that no single state or jurisdiction can.

The importance of investing in hazard mitigation cannot be overstated. The choice governments make about whether to invest, delay, or abandon disaster preparedness plans will determine the severity of the crises to come. California’s Climate Bond (Prop. 4), approved by voters in November 2024, authorizes $10 billion in general obligation bonds to finance a sweeping suite of climate adaptation measures —from wildfire prevention and drought/flood resilience to coastal protection, biodiversity restoration, clean drinking water, and extreme heat mitigation. Unfortunately, $10 billion only scratches the surface of hazard mitigation needs in California, and without federal leadership, the path to a resilient future will become far steeper.

In response to the cancellation of BRIC, California legislators submitted a joint resolution in June calling on Congress and the president to revive federal funding for BRIC. With no signs of BRIC’s restoration, despite devastating flash flooding in Texas over the July 4th weekend, a coalition of 20 states, including California, filed a lawsuit accusing FEMA of unlawfully canceling the program. Texas is noticeably absent from this lawsuit. It is uncertain if this lawsuit will result in FEMA restoring funding to this program. However, advancing the lawsuit shows that California leadership is aware of the importance of hazard mitigation actions in protecting the public from future disasters.

While we wait to see if BRIC funding is restored. State and local governments must explore new financing models for hazard mitigation and climate adaptation to bridge the gap created by federal cuts. Pausing mitigation projects in wait of federal funding should be the last resort, as it will result in greater losses during the next major disaster.
 

Part 2 of this series will examine existing state funding tools for hazard mitigation and climate adaptation.