NEW ORLEANS - A year after the Obama administration’s top housing official came to New Orleans to take in Jazz Fest and announce millions of additional dollars to help homeowners finish their Katrina rebuilding, the money is still stuck in Washington.
It made housing advocate M.A. Sheehan think of her own Jazz Fest experience last year, when she heard that Housing and Urban Development Shaun Donovan was releasing $7 million to $10 million for case management services for thousands of Road Home grant recipients struggling to restore their homes.
She was listening to “Louisiana 1927,” the song that became a post-Katrina anthem with the refrain, “Louisiana, they’re trying to wash us away.”
“I was listening to Marcia Ball sing that song when you actually called me to tell me about the secretary’s announcement,” Sheehan said. “And my response was, looking at what he announced, they’re not trying to wash us away. They’re trying to help us get back. A year later, I feel like they’re trying to wash us away.”
Louisiana’s plan to spend the final $110 million in the federally financed Road Home program is tied up in the HUD approval process. The feds already agreed in 2011 to let the state pay additional money to victims of contractor fraud, contaminated drywall or lenders who coerced them into using their grants to pay off mortgage balances, but there may be problems in dealing with a rule that no homeowner can be awarded more than $150,000.
The delay in releasing the funds is particularly frustrating given the findings in recent audits and analyses of the Road Home.
Of the 90,000 homeowners who selected Road Home’s rebuilding option and signed covenants stating they would rebuild and reoccupy their homes within three years, these reviews have found that as many as a third may not have complied, even as we approach the seventh anniversary of the Road Home program’s launch.
State and federal auditors are calling on the state’s Office of Community Development to more aggressively recover unused or misspent grant dollars. But Donovan was clear a year ago that he wanted to help as many stragglers as possible.
“You need to get to the bottom of this and sort of exhaust these potential efforts before you can finally say, ‘This isn’t going to work,’” Donovan said. “And you have to have both the case management piece and the enforcement side-by-side. You can’t have one or the other without doing them together.”
That was a heartening message for Cheryl Young, a Central City homeowner whose contractor made off with $80,000 from her Road Home grant before ending up in a Georgia jail, charged with mortgage fraud. She fixed her roof and windows, but since losing most of her grant and exhausting her savings, she hit a dead-end.
Since then, her house has been repeatedly vandalized. Just last month, thieves made off with the brackets on her porch and before that, most of her electrical wiring and plumbing lines were stolen.
“I just feel like I’m beating a dead horse,” Young said. “I keep putting money in, and as fast I’m putting the money in, someone else is taking it out.”
She was hoping that case management would help her move forward with a trustworthy contractor and with additional loan or grant funds to make up for what was stolen. Instead, she was informed that she might have to pay back the money; which, of course, she doesn’t have.
“I just feel like, don’t punish us for the people who did wrong,” she said.
Over the last couple of years, we’ve found several homes that got Road Home money but still sit abandoned – the clear violators.
But here’s a first: A son who says his dad ran off with the money.
Alfred Cousin said his father, who has lived in California for decades but took ownership of the family home in Pontchartrain Park after Katrina, never finished rebuilding.
“He advised me that he got like $150,000 from the Road Home settlement, and I know that he only spent like $60,000 getting it repaired,” Cousin said.
There was someone working on the house Tuesday. His father, Edward Cousin, did not respond to a request for comment.
Sheehan said the case management services Donovan announced a year ago would help tell the scofflaws from those who are trying desperately to come back.
“The purpose of that case management process is to identify those people who will be able to get home with additional funds,” she said.
Sheehan wants HUD to use $30 million on case management and transferring “Option 1” rebuilding grants into “Option 2” and “Option 3” buyout grants, so local agencies like the New Orleans Redevelopment Authority can take over properties that are truly abandoned. And for those who just need some extra help, she hopes the other $80 million in the Road Home coffers can go toward additional grants and low-interest loans.
It appears the level of non-compliance is highest in poorer neighborhoods. For example, Sheehan, who represents the Lower 9th Ward Homeowners Association, said a recent survey found half of that neighborhood’s Road Home grantees are not yet back. But the share of vacant Road Home rebuild properties can be as low as 7 percent in a well-to-do area like Lakeview, according to Rita Legrand, a blight watchdog who recently performed a survey there.
Pat Forbes, executive director of the state Office of Community Development, said his agency “is still finalizing an Action Plan Amendment addressing the remaining Road Home funds, and we have been in ongoing discussions with HUD about new policies within the Road Home program that will help those homeowners who have experienced unforeseen circumstances – such as rebuilding with contaminated drywall or experiencing contractor fraud – to obtain more funds to finish their construction and reoccupy their homes. Once these policies are in place, OCD-DRU will have case management staff available to review the files of anyone who may be eligible, as well as to help any other homeowner obtain the necessary paperwork to become compliant within the program.”
Sheehan led a group of homeowners to the local HUD office in New Orleans on Tuesday and delivered a letter from the Lower 9th Ward Homeowners Association to Donovan, calling on HUD to release the rest of the Road Home money.
“While you may not intend to wash us away, neglect has the same effect,” it reads. “We learned this when government neglect of the levees left our city under water.”