Saturday, September 5th, 2015

The Obameter

Restore housing in New Orleans

"Will work with the state to establish a goal for approving all Road Home applications within two months...Will also work to increase the supply of rental property, which is particularly important in New Orleans where 57 percent of pre-Katrina residents were renters."


Updates

Demand for rental property has not been met

The $9.7 billion Road Home Homeowner Assistance Program, which used federal funds to assist homeowners whose properties were damaged after hurricanes Katrina and Rita, can at this late point be called a success.

But that's because so much time has passed, not because the program speeded up grants. Despite President Barack Obama's promise, the backlog was not eliminated in two months.

By the end of January 2012, three years after Obama took office, about 400 checks still hadn't been cut — more than four years after the application deadline. About 60 remained at the end of his first term.

Now, nearly every eligible homeowner who applied for a Road Home grant has received one, according to the state agency that runs the program. All but 14 of the 130,053 eligible homeowners have received a grant. The average award: about $69,000.

That doesn't mean it all went smoothly.

This pledge specifically deals with the speed of approving grants, so we won't tell you about the unscrupulous contractors, the lenders who demanded mortgage payments, the fact that awards were often too small to cover repairs, the more than $100 million still unspent, the lawsuit that HUD settled for discriminating against low-income, black homeowners, the audit that found $1 billion went to people who may have broken the rules, or the threatening letters in which the state demanded repayment.

Despite all that, Road Home is "the reason that tens of thousands of property owners are back in homes that are newly renovated and, in many cases, safer than before," wrote WWL-TV reporter David Hammer.

Rental unit rebuilding, however, hasn't been quite as successful. The programs we looked at have fallen short of their goals.

A 2007 report by the Brookings Institution estimated that 108,000 rental units were flooded throughout the New Orleans metropolitan area after Katrina.

The U.S. Department of Housing and Urban Development awarded $13.4 billion in Community Development Block Grants for post-Katrina recovery. Though HUD allocated the money under the Bush administration, much of it was spent on Obama's watch.

Most of that money went to the Road Home homeowner assistance program.

About $550 million was budgeted to help rebuild as many as 33,000 units in large apartment complexes, including up to 27,000 units for low-income tenants. About $514 million has been spent, but that's resulted in far fewer units than planned: 7,500, including 4,400 considered affordable.

The state budgeted $869 million in federal funds to rebuild 18,000 rental units in houses and small apartment buildings. Of those, 12,000 were supposed to be for low-income tenants. But much of that money was moved into other recovery programs. The state has handed out about $434 million to rehabilitate about 8,600 units, of which 7,600 are affordable.

The small rental program, like Road Home, has come under fire for misspending, fraud and alleged noncompliance. State auditors recently said about $90 million has not been fully accounted for.

Then there's public housing. Since Katrina, there are fewer traditional public-housing units in New Orleans, but more Section 8 vouchers.

In August 2005, 5,146 families lived in public housing in the city, including about 2,900 in four complexes dubbed the "Big Four."

After the storm, the Housing Authority of New Orleans kept residents from returning home and ramped up a plan to demolish the complexes and replace them with mixed-income developments.

The agency now has about 2,000 public housing units, with about 600 more planned, HANO spokeswoman Lesley Thomas said. That's less than the 3,200 replacement public housing units the housing agency planned when the City Council approved the demolitions.

The number of Section 8 affordable housing vouchers in the city has increased from 8,400 to about 17,800 between 2005 and today. There are more than 13,000 families on the housing agency's Section 8 waiting list, which has been closed since 2009. On the public housing waiting list: 5,000 families.

Meanwhile, New Orleans is one of the cities in the U.S. where rents are rising faster than incomes. The Data Center, a New Orleans think tank, found that 51 percent of New Orleans renters spend 35 percent or more of their gross pay on housing. And 37 percent spend more than half of their gross pay on housing.

This is a tough pledge to evaluate. The feds did give $13.4 billion to Louisianans for housing and infrastructure relief, but that decision was made under the Bush administration.

Although Road Home finally cleared its backlog, it did not do so within two months as Obama promised.

As for rental housing, the Obama administration has funded the construction of thousands of affordable rental units. But the program has built many fewer units than planned.

Under current plans, there will be half as many public housing units in New Orleans as before the storm, although the administration has doubled the number of Section 8 vouchers for residents.

When you consider how much people in New Orleans are paying for rent, and the thousands of people on waiting lists for public housing and Section 8 vouchers, it's clear that the demand for rental property, especially affordable housing, has not been met.

The Obama administration has tried to meet the terms of this promise, but the results have fallen short. So we rate this Compromise.

Editor's note: On the 10th anniversary of Hurricane Katrina, PolitiFact has partnered with The Lens to report on President Barack Obama's campaign promises about the storm's impact on New Orleans. The Lens is a nonprofit, public-interest newsroom that covers the New Orleans area.

Sources:

Road Home Homeowner Assistance Pipeline Report: July 10, 2015

Road Home Action Plan Amendment One: 2006

Louisiana Executive Department Audit 2014

Brookings Institution, New Orleans After the Storm

Housing Authority of New Orleans Agency Fact Sheet

Housing Authority of New Orleans 2012 Progress Report

The Data Center, The New Orleans Index at Ten, July 31, 2015

The Data Center, Who Lives In New Orleans Metro Parishes Now?, Oct. 16, 2014

The Data Center, Expanding Housing Choice and Opportunity in the Housing Choice Voucher Program, July 8, 2015

Times-Picayune, "Alabama man gets 60 years for post-Katrina housing scam," Feb. 12, 2010

WWL-TV, "Protest group wants changes to Road Home policies," June 26, 2015

Times-Picayune, "With thousands still displaced, advocates call for better Road Home rules," June 26, 2015

Washington Post, "HUD to pay $62 million to La. homeowners to settle Road Home lawsuit," July 6, 2011

Times-Picayune, "Road Home officials taken to task for threatening demand letters sent to New Orleans residents," Feb. 24, 2014

WWL-TV, "Examining post-Katrina Road Home program: 'It's more than the money. It's the hoops we had to jump through to do it,'" July 29, 2015

Times-Picayune, "Contractor sentenced for over-billing Road Home subsidiary," Dec. 18, 2013

Times-Picayune, "Housing development tenants don't want old units, HUD survey shows," March 6, 2008

Times-Picayune, "Live Updates on Demolition Vote from Council Chambers," Dec. 19, 2007

New Orleans Advocate, "Sell them or redevelop them? Debate rages over HANO's scattered sites," May 26, 2015

 

Thousands of Road Home applications still outstanding

While the vast majority of Louisiana homeowners who applied for federally funded grants through the Road Home program, which provides compensation to residents whose homes were damaged by Hurricanes Katrina and Rita, have been processed, a study by the RAND Corp. released on May 27, 2008, found that some applicants had waited more than eight months to receive grants. Only about half of eligible applicants who applied for compensation in December 2006 had received grants one year later, the study found.

The Road Home Program stopped accepting applications in July 2007. But when President Barack Obama took office, there were still about 12,000 applications in the pipeline that had not been resolved. At the end of 2009, there were about 4,800 applications outstanding, said Christina Stephens, a spokeswoman for the Louisiana Recovery Authority. Most of the holdups have been due to the difficulty some have faced proving they own their home (a requirement to be eligible for grants), Stephens said, and title issues can drag on. Some applicants, she said, might never be able to prove eligibility.

"There have been no big conversations with (the Department of Housing and Urban Development) to work on ways to move these people more quickly through the process," Stephens said. But she said the office is committed to resolving cases as efficiently as it can, balancing the concerns of homeowners with the need to ensure that tax dollars are not wasted on applicants who are not eligible.

Administration officials say they have taken several important steps toward moving tens of thousands of Gulf Coast residents toward self-sufficiency and long-term solutions: 

· On Feb. 20, 2009, Obama approved a Disaster Housing Assistance Program that was coordinated through the Department of Housing and Urban Development and nearly 200 local housing authorities across the country, with FEMA support and funding. This program was intended to ensure that the families would not experience undue rent burden while phasing them toward more permanent solutions.

· In early June, HUD provided $80 million in new housing vouchers and the Department of Homeland Security provided new resources for case management to expand alternatives available to the approximately 3,450 households still residing in FEMA temporary housing units such as trailers and mobile homes. Since announcing these steps, White House officials said, roughly 1,200 additional households have transitioned out of FEMA"s temporary housing program.

In addition, HUD ruled that Neighborhood Stabilization Program funds, grants used to help communities struggling with the foreclosure crisis, could also be used to redevelop demolished and vacant properties for housing purposes. In New Orleans alone, there may be up to 68,000 abandoned, unoccupied or blighted properties that could now be restored using this program.

In this promise, Obama spoke specifically about increasing the supply of rental property. And that has happened, according to Stephens, of the Louisiana Recovery Authority.

"On the rental housing front, we"ve created 4,953 rental units through our two programs, one for small 'mom and pop' landlords, the other for larger developers," Stephens said in January 2010. "The majority of these units offer 'affordable' rents and almost half were created in 'mixed income' communities that feature both market rate units and more affordable units for those with more modest incomes. Another 13 of these mixed income developments are under construction, and when complete they will bring another 2,339 rental units online."

But while New Orleans has seen a rapid increase in development of market-rate rental housing, there is still a critical need for more affordable rental housing for low-income residents, said Allison Plyer, deputy director of the Greater New Orleans Community Data Center. State officials have put the brakes on some low-income housing projects and are seeking to redirect federal grants for them toward other infrastructure needs.

"There are about 7,700 rental units in the pipeline," Plyer said. "It's up to Obama whether those developments get built."

This promise comes with a pretty broad title, restoring housing in New Orleans. However, in campaign literature, Obama made a couple of very specific promises. One was to work with state officials to establish a goal for approving all Road Home applications within two months. That hasn't happened, according to the Louisiana Recovery Authority, though the authority cut the list of outstanding applications from about 12,000 at the beginning of the 2009, to about 4,800 by the end of the year.

In a more general sense, New Orleans has, however, experienced a rise in construction of rental properties. Some New Orleans officials warn, however, that not enough is affordable for low-income residents, and some state officials are looking to redirect federal money for rental property construction to meet other needs.

That's a bit of a mixed bag, and so we rate this promise a Compromise.

Sources:

Greater New Orleans Community Data Center, "Housing Production Needs," by Allison Plyer and Elaine Ortiz, November 2009

Louisiana Recovery Authority, Rental Programs

Rand Corporation, "Long, Unpredictable Delays Found in Louisiana 'The Road Home' Grants to Homeowners," May 27, 2008

Interviews with: Allison Plyer, deputy director of the Greater New Orleans Community Data Center; and Christina Stephens, a spokeswoman for the Louisiana Recovery Authority