New Orleans housing program crumbles, leaves crumbs

By Guest Columnist Aug 02, 2007

Katrina homeowners: will some ever get rebuilding grants as promised? This month, Jacob Faber of the Center for Social Inclusion questions the failed housing program meant to give flooded New Orleaneans new homes. He writes for RaceWire: No "Road Home" The Louisiana Recovery Authority and U.S. Department of Housing and Urban Development (HUD) are finally giving up on their $8.5 billion Road Home Program (RHP), ending what was an example of “worst practice” in rebuilding and a complete failure as a recovery program. The program began last summer and aimed to help “residents get back into a home or apartment as quickly and fairly as possible”. Under the program, which cut off applications at the end of July, homeowners can apply for up to $150,000 to rebuild their hurricane-damaged homes or take 60% of the grant’s value and relocate out of state. There is a 30% penalty if you didn’t have insurance before the storms – 42,000 of the homes destroyed statewide were uninsured, 18,000 in New Orleans. The program isn’t too bad if you’re an insured homeowner with the time, energy, and money to fight bureaucrats for months for the chance to rebuild in the same flood-prone neighborhood. If you rented your home, didn’t have flood insurance, want to move outside the state, or don’t have the financial security to live in temporary housing for many months, this program might not be for you. If you fall into the second category, you’re probably a person of color. A problem of history Black Louisianans had much lower homeownership rates before the storm (50%) than their White neighbors (over 75%) – an outcome of both historically racist and exclusionary public policies (like the Federal Housing Administration, which only financed homes in segregated neighborhoods), and contemporary policy and institutional biases (like building highways connecting White suburbs to job centers rather than regional public transit). If they did own their home, they were less likely to have insurance. Because they were also less likely to own a car, Blacks made up a large majority of those bussed out of New Orleans – often to places where car ownership was essential for holding a job. By shortchanging renters and penalizing the uninsured, HUD has shown to care very little about the return of the majority of Louisiana’s poor Blacks and poor immigrants. While over 40% of the homes destroyed in Louisiana by Katrina and Wilma were rental properties (50% in New Orleans), only 25% of the Road Home Program’s budget was intended to rebuild rental units. Only 18% of the rental homes destroyed in New Orleans can be rebuilt with this meager funding – and only 40% statewide. This leaves over 13,000 families trapped in poisoned FEMA trailer parks and 31,000 families still on housing assistance away from their homes. Bureaucratic black hole The homeowner assistance program got off to a depressingly slow start – only 100 grants delivered in the first six months. They did pick up the pace a bit recently, but it is still painfully slow – as of July 1st, only 23% of applicants actually received any money, while over 40% of applicants (58,000 homeowners) are stuck in the bureaucratic black hole that is the approval process. Another 20,000 applicants have yet to be seen by a Road Home representative. Is it just a coincidence that the tens of thousands still stranded far from their homes are mostly poor people of color? On top of all this, there is a $5 billion budget shortfall. Congress asked Louisiana to cough up $1 billion to help close this deficit – on top of the $4.6 billion the state already committed to recovery efforts. The request would divert money away from a new Charity Hospital, school and infrastructure repairs, economic development, and other programs crucial to the state’s recovery. To ask the state to shell out more money is outrageous, considering Congress is spending tens of billions in waging a racist war against Arabs and Muslims at home and abroad. Cough up the money So how can we fix the program? First, let’s close the budget shortfall. If FEMA would release the $1.2 billion it promised the program, currently held up due to petty, bureaucratic disagreements between the state and federal governments, it would cost Congress a few billion to erase the entire estimated deficit. While a few billion isn’t chump change, it certainly is an affordable and necessary investment. It’s also obvious that the approval process is taking too long. A streamlined process and larger staff in more states than just Louisiana and Texas is desperately needed. Even if those problems were addressed, the Road Home Program is still another example of the federal government’s inept and discriminatory recovery effort. Many Blacks were disadvantaged before the storms and are now excluded from aid during recovery. Unless we change the way rebuilding policies are developed, supposedly “race-neutral” policies will just perpetuate racial inequalities. The federal government seems content to let displaced people of color languish in temporary housing with no opportunity to return home. This is simply unacceptable. More money must be dedicated to rebuilding rental properties and the ridiculous penalty for uninsured homeownership has to go.