Friday, August 26, 2011

Hurricane Katrina Grants Going To The Wealthy But Not To The Poor!

According to some advocates, the effort to help Huricane Katrina victims with government grants seems to have benefited more affluent people than those who are low-incomed.

According to one organization, "The recovery is really the tale of two recoveries. For people who were well off before the storm, they are more likely to be back in their homes, back in their jobs and to have access to good health care. For those who were poor or struggling to get by before the storm, the opposite is true."

Louisiana's program to distribute grants to property owners whose homes were damaged or destroyed by Katrina was found by a federal judge this month to discriminate against black homeowners!

Meanwhile, in Mississippi, state officials refused to offer rebuilding grants to property owners who suffered wind damage, explaining that the property owners should have carried private insurance. That rule hit low-income and black homeowners particularly hard, advocates say, because many of them were uninsured, often because they owned property that was passed down through the generations.

The $143 billion federally funded effort, one of the largest reconstruction projects in the country's history, fortified vulnerable levees, rebuilt hundreds of public buildings, reconstructed miles of roads and bridges and provided tens of thousands of residents with money to help piece together their shattered lives.

But there is a sharp disparity in how residents view the pace of recovery. A recent poll by the Kaiser Family Foundation found that while seven in 10 New Orleans residents say the rebuilding process is "going in the right direction," a third say their lives are still disrupted by the storm.

African Americans are more than twice as likely as whites to say they have not yet recovered after Katrina, the survey found. And blacks in the city are 2 & 1/2 times more likely to be low-income than whites.

One disabled Vietnam veteran has said, "I just knew we had a rotten deal". He and his wife have been struggling to rebuild their duplex in New Orleans East. The storm propelled them on a years-long odyssey through Port Arthur, Tex., Houston and Arkansas. They did not return to their still-damaged home until 2008! Their home was valued at just $135,000, although repair costs were estimated by the state to be $308,000. They were awarded a grant of just $16,649 to supplement just over $100,000 they received in insurance payments.

The federally funded grant program offered homeowners grants of up to $150,000. But homeowners could not collect more than the pre-storm value of their homes, regardless of the cost of repairs.

A federal judge ruled that the program's formula for calculating grants discriminates against black homeowners, who tend to live in neighborhoods with lower home values.

A spokesperson for the grant program has said that they have already appealed the judge's decision and added that the grant program has modified the program to pay out an additional $2 billion to more than 45,000 low-income homeowners. So far the government grant program has paid $8.6 billion to more than 127,000 homeowners.

While the waterfront casinos are providing a large chunk of state revenue, the vast majority of residents are back in their rebuilt homes, although thousands are still struggling to find affordable housing as their recovery checks did not cover the cost of the damage.

Despite the improvements, many gaps remain.

In Mississippi, where Katrina severely damaged more than 101,000 housing units, many residents face what advocates call a similar inequity. Praised in the aftermath of Katrina for his can-do attitude, Gov. Haley Barbour received a series of waivers from the Bush administration that largely freed Mississippi from the requirement to spend at least half of his state's $5.5 billion in federal block grant money on low- and moderate-income residents. Barbour successfully argued that the waivers were necessary to give the state flexibility to deal effectively with the widespread devastation. That allowed the state to divert close to $1 billion to help devastated utilities rebuild, to subsidize residents' insurance premiums and the port and other economic development projects. Meanwhile, advocates say that more than 5,000 low-income Mississippi families have yet to settle in permanent housing since the storm. Advocates have said that more than $3 billion distributed by the state's housing recovery program went disproportionately to more affluent residents. The plan paid up to $150,000 to homeowners whose properties were damaged by the unprecedented storm surge spawned by Katrina, but nothing to those whose homes suffered wind damage.

To be eligible for the initial grants, families had to have homeowners insurance, although the state later devised a program that paid grants of up to $100,000 to low-income, uninsured homeowners whose properties were damaged by the storm surge.
The rationale, state officials said, was that responsible homeowners had no way to know that they should have flood insurance in areas that federal experts deemed to be outside of the flood plain.

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