Louisiana to Receive $620M in Disaster Aid for Gustav, Ike

June 12, 2009

Louisiana will get $620 million in recovery funds to help the state rebuild after last year’s hurricanes, the U.S. Department of Housing and Urban Development said.

The money brings the total amount given to Louisiana through HUD’s Community Development Block Grant program for recovery from Gustav and Ike to $1 billion.

“We are absolutely committed to building back stronger than ever before, and this funding will give communities the vital assistance they need to rebuild and encourage growth in their local economies,” Gov. Bobby Jindal said.

Paul Rainwater, the executive director of the Louisiana Recovery Authority, said the money would start being distributed to parishes once they submit their recovery plans to the state.

The governor’s office said a breakdown of the recovery money looks like this: $565 million to parishes for housing, infrastructure and economic development; $84 million for affordable rental housing; $58 million for farmers; $27 million for coastal restoration; and $27 million for fishermen.

Besides that, the state government will get $197 million and the governor’s office expects $40 million will be spent on administrative costs to handle the money.

Rainwater said HUD allowed the block grant money to be spent on fishery and agriculture programs for the first time.

He said HUD was generous and that the money sent to Louisiana should cover the rebuilding needs. “We feel pretty comfortable,” he said.

HUD took into account that Louisiana had been hit by four major hurricanes since 2005, he said.

Unlike after Katrina and Rita, none of the block grant money will be put into a Road Home-style homeowner compensation program. Instead, homeowners will have to rely on insurance payments and other resources to rebuild.

HUD also said it would set up a $312 million fund states could tap into. The fund would pay for “long-term disaster strategies” to reduce risk from future natural disasters. The money would be handed out on a competitive basis, HUD said, and help states do such things as buy out homes in high-risk areas and make homes more resistant to natural disasters.