La. Homeowners Face Waiting Game in State’s Housing Assistance Plans

Anita Richardson’s insurance company gave her $4,500 to repair what her contractor says is $50,000 worth of damage done when Hurricane Katrina ripped apart the roof of her New Orleans, La., home and poured about two feet of water inside.

“How can I repair my roof, my shutters, my gutters, all these other things, with $4,500?” Richardson said.

Unemployed since the storm and living in a FEMA trailer park north of Baton Rouge, Richardson is one of about 100,000 homeowners expected to register for up to $150,000 apiece in aid from a reconstruction plan unveiled by Gov. Kathleen Blanco.

The program has the blessings of President Bush, who is pressing Congress to provide about $4.2 billion toward its expected $7.5 billion cost. “The number fits into a well thought-out plan that has been put together by the local folks,” Bush said during a recent trip to New Orleans.

But the plan’s prospects are far from certain.

Congress probably won’t decide on funding until May, and there is no guarantee the state will get the full $4.2 billion – other Gulf Coast states will be competing for it. Meanwhile, the program needs approval from Blanco’s Louisiana Recovery Authority, the state legislature and the U.S. Department of Housing and Urban Development.

It all means homeowners like Richardson are unlikely to see any checks before summer – and the beginning of another hurricane season.

Even with the necessary approvals and funding, they still could face lengthy waits for contractors in a state where more than 120,000 owner-occupied homes received major damage from hurricanes Katrina and Rita. About 210,000 more received minor damage, according to the Louisiana Recovery Authority.

“I’m going to tell you, you have to be patient,” Blanco advised homeowners this week.

Blanco said the housing assistance program would end the financial paralysis that has kept thousands of Louisiana residents from rebuilding their homes since Katrina struck Aug. 29 and Rita followed a month later on Sept. 24. Thousands of homes sit ruined and moldy; neighborhoods in the hardest-hit areas contain only shattered houses.

The governor’s plan would provide money to repair or rebuild damaged homes or provide buyouts to people who choose not to rebuild in their devastated neighborhoods. For those who don’t want to relocate or rebuild in Louisiana, the plan would buy them out at 60 percent of the pre-storm home value.

Homeowners must have uninsured damage of more than $5,200 to be eligible. The program would provide repairs and replacement homes that were equivalent to the homes damaged or destroyed by the hurricanes, up to $150,000 in aid per house.

Insurance proceeds and FEMA assistance would be deducted from the maximum amount they could receive. Homeowners who were inside the flood plain and didn’t have flood insurance would have a 30 percent penalty taken off what they could receive.

The state plans to use existing federal aid already available combined with the $4.2 billion to cover the costs. Without the extra money, Louisiana’s housing aid package would have to be scaled back significantly.

“It would not be an adequate housing program,” Blanco said.