At a Gulf Coast recovery meeting a few weeks ago, a long-time community activist I respect deeply lambasted Louisiana’s Road Home programÂ – a post-Katrina homeowners’ assistance program – as the “worst piece of legislation” he’s ever seen.Â Far be it from me to accuse this nationally-known politically active septegenarian of hyperbole; this is an absolutely abysmal public recovery initiative.Â And now the state is about to plow an additional $1B into the already $10B capitalized homeowner’s payout program, in the (foolish) hopes of extracting additional bail-out funds from DC, and at the expense of municipal, rental and small business recovery funds.Â
When I worked in Lower Manhattan after September 11, I learned from experience that recovery funds are never enough.Â No matter whether you’re a victim’s grieving family member, an ailing small business, or a homeowner trying to rebuild, focusing political energies on extracting recovery monies will only end in frustration and resentment.Â I don’t care if you get $1.5M or $5,000, you’ll want more, and you’ll inevitably interpret the payout as representative of your relative value in the all-around recovery process.Â Â Depending on your sense of victimization, entitlement and trauma, it’s highly likely you’ll believe you’ve come up short.
But when it comes to political atrocities like the Road Home program, who can blame you?Â
First, there’s the question of all the bad data they appear to be working with.Â While we know who to chastise for FEMA’s under-estimates of hurricane damage, it’s less clear who did the math that led to the under-estimates of post-storm construction costs and insurance payouts that have left the state with too little money to cover the average $72k grant to 148,000 applicants.Â And given that all this shitty arithmetic means that homeowners are left with much larger financial gaps to overcome in rebuilding, and that the state has made this bloated and mismanaged program the centerpiece of its recovery efforts, it’s reasonable that homeowners want and deserve the funds that the state has promised to them.
But the state should never have allocated this kind of money exclusively to a homeowner recovery problem.Â InÂ a state where two-thirds of the physical damage occured in the Greater New Orleans region, an area in which homeownership rates are less than the state and national averages, the Road Home program immediately failed to address the demonstrable needs of renters and their host municipalities who bore a disproportionate amount of the brunt of the 2005 hurricane season.Â Secondly, the primary federal funds used for the Road Home program are Community Development Block Grant (CDBG) monies, entitlement funds for states and municipalities to address issues of housing and economic development.Â While the state technically is operating with CDBG guidelines by allocating billions of dollars solely for homeowners, it is in spectular violation of the spirit of the CDBG program, which is the current incarnation of historical anti-poverty, affordable housing, and anti-blight federal initiatives in the U.S.Â
CDBG funds are also critical for infrastructure development, including schools, government buildings, roads, and other public facilities that are the backbone of local communities.Â To close the Road Home shortfall, the state is proposing to cut $50M in additional CDBG funds from other recovery initiatives, including municipal efforts to repair schools and other local structures.Â Now picture restoring your home to a pre-storm condition amidst shuttered schools, blackened street lights, rumbled streets, and nearby to overcrowded rental propertiesÂ because the state starved other recovery programs responsible for rental housing development and infrastructure repair.Â
Sounds like a great place to live, don’t you think?Â As my highly leveraged small business owners told one of my colleagues in 2005, “If I had known on September 10 what I know now….” they would not have taken on the very expensive fight (emotionally and financially) to stay put in the post-9/11 Lower Manhattan that, to them, changed for the worse around them.Â What a shame that the state of Lousiana is setting up its homeowners to learn the same very painful lesson.Â