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Testimony of Cashauna Hill, Executive Director to the U.S. House Committee on Financial Services Subcommittee on Housing and Insurance

Posted on 03. Nov, 2015 by in Staff Testimony

Good afternoon, Chairman Hensarling, Ranking Member Waters and Members of the Committee. My name is Cashauna Hill, and I am Executive Director of the Greater New Orleans Fair Housing Action Center. GNOFHAC is a private, non-profit civil rights organization established in 1995 to eradicate housing discrimination in the greater New Orleans area. Through education, investigation, and enforcement activities, GNOFHAC promotes equal opportunity in all housing transactions, including rental, sales, lending, and insurance. We are funded in part by federal Fair Housing Initiatives Program (FHIP) funds from HUD. Our work since Hurricane Katrina first made landfall in August of 2005 has focused on ensuring members of classes protected under the Fair Housing Act have been able to return to the City they call home, and with guarantees to fair housing choice. I wanted to thank you for hosting this important hearing today.

  1. Indicators of Recovery

August of this year marked a decade since the storm made landfall, and many of you are well aware of the great accomplishments and many persistent challenges that this city and region have faced. I would like to provide you with just a quick sketch of some overall indicators of recovery, both at the city and regional levels.

Of New Orleans 72 neighborhoods, more than half (40) of those neighborhoods have recovered over 90 percent of their population, according to the New Orleans Data Center. In the last four years, New Orleans has grown an additional 12 percent, ranking 28th in population growth out of U.S cities with populations of 50,000 or more. However, as you probably heard during the August media coverage of Hurricane Katrina, despite rapid growth and ongoing recovery, approximately 100,000 African Americans have not returned to New Orleans.

Regionally, surrounding parishes have also shifted demographically in the decade since Hurricane Katrina. These shifts are consistent with trends nationwide and the suburbanization of poverty as low and moderate-income people are pushed out of city centers. However, the “Katrina Effect” certainly accelerated trends seen at more gradual rates in other cities nationwide.

For example, in Jefferson Parish, the county just to the west of Orleans, the population rebounded far faster than New Orleans -with 95 percent of its pre-storm population back by 2010, while New Orleans only had 71 percent. The African American population grew in Jefferson Parish after the storm, but at a rate far slower (8 percent) than previous decades.   Consistent with national trends, however, between 1999 and 2010, the share of the region’s poor living in suburbs increased from 56 percent to 67 percent, with roughly 61,500 people living below the poverty line in Jefferson Parish.

To the south of Orleans Parish lies St. Bernard Parish. In 2006, the Fair Housing Center filed suit against St. Bernard for enforcing a “blood relative only ordinance” that prevented St. Bernard homeowners from renting to any person that wasn’t a blood relative. Because 90 percent of homeowners in the Parish were white at the time the ordinance was passed, most single-family homes would have only been available to white tenants.

The ordinance was passed at a moment when New Orleanians, forced out of their homes, were desperately seeking housing with reduced housing stock and limited options available. As New Orleanians, who are majority African American, sought stable housing options, surrounding communities quickly erected barriers to entry.

Since the 2006 litigation and widespread press coverage, St. Bernard Parish has integrated considerably. With a pre-storm percentage of 7.5% African American residents, St. Bernard is now close to a quarter (22%) African American. Notably, the Hispanic population has also doubled since the days before Hurricane Katrina as well.

  1. The Road Home

By far the largest Congressionally funded housing recovery program in U.S. history has been the Road Home, the disaster Community Development Block Grant (CDBG) funded rebuilding program for Louisiana homeowners. The program was intended to provide direct cash rebuilding grants at a maximum of $150,000 for storm-impacted homeowners, with awards calculated to exclude insurance proceeds or other existing benefits.

In 2008, GNOFHAC filed a lawsuit against the State of Louisiana and HUD because of the design of the Road Home program. Our housing counseling staff had noticed that many African American clients received smaller grants than white clients —even when the homes had similar square footage, had sustained comparable damage, and were estimated to cost the same amount to repair.  That’s because the grant formula was based on the pre-storm value, rather than the cost to rebuild. As result of this formula, homeowners from neighborhoods where homes were appraised at a higher value received more— even if the costs to rebuild were the same. The formula benefited white homeowners over African Americans due to high home values in white neighborhoods, and played a major role in displacing black residents.  In 2008 and again in 2009 this committee heard extensive testimony from the fair housing center about this program, so I won’t go into any more details.

In 2011, the case settled and made additional funds available to eligible homeowners.   The settlement was a step in the right direction toward getting more hurricane-affected homeowners back into their homes and making good on the promise to rebuild a better New Orleans, but the truth is that the settlement in 2011 was a tremendously late recovery start for primarily African American households that had been left behind. While the formula was ruled discriminatory by a federal judge, in the meantime many people had made homes elsewhere or were overwhelmed by the costs of prolonged displacement. To date, the settlement has resulted in $16 million to hundreds of homeowners.

changeinaahomeowners

The map shows areas with the greatest losses of African American homeowners in dark orange. While the City lost homeowners of all races after Katrina, the hatched areas show where the loss of African American homeowners out-paced the loss of homeowners in the City as a whole.

Source: Greater New Orleans Fair Housing Action Center.

III. Renting in New Orleans

The plight of renters in the aftermath of Hurricane Katrina is particularly striking, as New Orleans is a city where more than half of the residents are renters, rather than homeowners. Yet, there was never a comprehensive plan to rebuild or repair this largest slice of the housing market. The results of this lack of a comprehensive rental-rebuilding program are twofold: For one, much of our rental stock is low quality and suffers deferred maintenance, with families living in substandard housing that creates a significant public health concern. Second, there is tremendous pressure and competition on our rental housing market.

As a result, citywide average rent in New Orleans is up 40 percent since before Katrina, yet household income is only up 2 percent.   Close to 60 percent of renters are rent-burdened and pay 30 percent or more of their income toward rent and utilities.   Shockingly, more than a third of New Orleans renters are severely rent-burdened and pay 50 percent of their income towards rent and utilities, leaving little else for education, transportation, groceries or other necessities. Increased competition for limited remaining rental stock has pushed middle and lower income people to the margins of the market.

pricedout

Source: Greater New Orleans Fair Housing Action Center.

Further, New Orleans has not been immune to the effects of gentrification common to other cities. These trends have most severely impacted service industry workers, culture bearers, musicians and others in the cash tourist economy. It has also more severely impacted African Americans over whites, as the borders of historically African American neighborhoods became porous to whites moving into the city center. We do not see the same trends in historically white neighborhoods.

At the same time that the city is facing a massive affordability crisis that pushes low and moderate income renters to the periphery of the market, both geographically and into substandard units, discrimination also has worked to keep people of color out of New Orleans’ highest opportunity neighborhoods.

In 2014, the Greater New Orleans Fair Housing Action Center investigated fifty properties to determine whether landlords and housing providers discriminate on the basis of race in neighborhoods that social science research would indicate offer significant opportunity for healthier and more successful life outcomes. The sites tested included apartment complexes, single-family homes, and apartments located in multi-family buildings that advertised availability in local publications and online.

Paired sets of testers, or persons trained to pose as apartment-seekers, contacted the rental agent for each of the fifty properties investigated to express interest, elicit information about the terms and conditions, arrange a viewing, and ask for an application. The testers in each paired set had substantially similar profiles and were equally qualified to rent the advertised apartments.

All testers received standardized training from the Greater New Orleans Fair Housing Action Center. The training included both classroom and field training. Testers are taught to be objective fact- finders and to report, but not interpret, the results of their test.

The United States Supreme Court has upheld the use of the testing process as a legal and effective tool to investigate claims of housing discrimination. Both the U.S. Department of Justice (USDOJ) and Department of Housing and Urban Development (HUD) use testing to conduct investigations.

The tests revealed that equal access to housing opportunity does not exist in the highest opportunity neighborhoods of the city. Of the fifty tests conducted, African-Americans who were otherwise fully qualified, were either outright denied the opportunity to rent or received less favorable treatment 44% of the time.

Similarly situated white testers, on the other hand, were given the opportunity to rent or otherwise experienced favorable treatment in a stark demonstration of racial preference and discrimination. Unfortunately in New Orleans, not only does the place where a person lives contribute to one’s life outcomes, but race plays a significant part in determining whether one can find a home in neighborhoods that offer the greatest opportunity for positive life outcomes.

It can therefore be seen that New Orleans’ affordability crisis, coupled with ongoing racial discrimination, continues to skew the rental housing market and push African American renters to the margins. A number of citywide interventions may help to increase supply in high opportunity neighborhoods, including enhanced neighborhood zoning and small local dedicated funding sources. However, it will take a number of local interventions and leveraging of local and federal assets in order to adequately address this crisis. 

  1. HUD Assisted Clients

As this committee is aware, after Hurricane Katrina the Housing Authority of New Orleans (HANO) demolished over 5,000 units of public housing. While Congress funded the Gulf Opportunity Zone (Go Zone) for low-income housing tax credits to rebuild or replace affordable and deeply affordable housing, only 13 percent (or 670 units) in the original Big Four housing developments have been replaced more than a decade since the storm. The demolition of public housing developments began even before the storm. At the time, the demolitions were justified based on high poverty concentrations and local trends, consistent with national ones, to move from project-based (supply-side) rental assistance to tenant-based (demand-side) assistance.

The vast majority of former public housing residents received Housing Choice Program vouchers. As portable subsidies, the vouchers are often referred to as a way to provide better housing choice for HUD tenants and increase housing mobility.

However, this transition hit New Orleans at precisely the moment when approximately 50 percent of the rental housing stock had been lost, increasing the demand but reducing the supply, and putting program participants in competition for remaining limited housing stock.

As a result, the voucher program has increased residential segregation in even further flung and isolated areas of the city in the decade since Katrina. The program includes nearly a quarter of our city’s renters: In 2010, there were 17,347 families using vouchers to subsidize their rent, up from about 8,400 in 2005—reflecting the replacement of unit-based assistance with tenant-based vouchers.

 

 

Screen Shot 2015-11-03 at 12.36.10 PM

From: The Data Center.

Even before the storm, a 2003 HUD study found that twice as many metro New Orleans voucher households (21 percent) lived in neighborhoods of extreme poverty compared with a national average of 10 percent.

The 2000 dissimilarity index for New Orleans was .68 (68% of African Americans or whites would have to move to in order to create neighborhood distributions that look like the city as a whole), in 2015 the dissimilarity index had gone even further up to .71. According to HUD, dissimilarity indices below .40 are considered indicative of low levels of segregation. Indices between .40 and .55 indicate moderate levels of segregation; above .55 indicate high levels of segregation.

Yet housing options since the storm have only become more limited for HUD clients, deepening racial segregation and living patterns in neighborhoods of extreme poverty. According to a report issued by the New Orleans Data Center, “An examination of voucher households reported by HUD in 2010 reveals that 25 percent of the vouchers were used in 5 percent of the census tracts (4,279 total vouchers used in nine tracts).  In each of these nine tracts, more than 300 vouchers were used, which is triple the amount that would be present if vouchers were evenly distributed across all tracts.  The number of vouchers appearing in these tracts ranged from 318 to 843.  Seven of the nine census tracts are located in New Orleans East; six of the nine tracts in this group are in high-poverty areas; and all of them are in neighborhoods with fewer than 25 percent white residents.”

With the exception of a lucky few, evidence suggests that people who were displaced from public housing after Katrina and subsequent demolitions are worse, not better, off, potentially condemning a Katrina generation to poverty.

Yet, the benefits of living in a high opportunity, low poverty neighborhood are well documented. More than a decade after HUD’s Moving to Opportunity pilot program, where voucher holders were randomly selected to move to lower poverty neighborhoods, the children of parents who participated in the program were found to:

  • Have an annual income 30 percent higher than their non-moving counterparts
  • Have increased rates of college attendance
  • Be more likely to live in high opportunity neighborhoods themselves
  • Be less likely to be single parents

Programs like Moving to Opportunity have been found to remove the generational persistence of poverty and ultimately generate better returns for taxpayers and decreased future reliance on HUD programs, yet program design heavily influenced outcomes. Successful demand side programs all included mobility counseling and supports for tenants, as well as landlord recruitment.

If the next generation of New Orleanians is to succeed, we must do more to expand housing choice and opportunity. This includes efficient administration of the voucher program and an effective counseling program with landlord recruitment and retention, pre-move counseling, search assistance, and post-move counseling. HUD should also set fair market rents (FMRs) at the neighborhood or zip code level, rather than metrowide. HUD could also incentivize administration of vouchers at the metro or regional level, which could improve access to a wider range of neighborhoods. Finally, as mentioned during the overall market discussion, New Orleans must do more to increase the supply of affordable and deeply affordable housing in high opportunity neighborhoods and use every asset to do so, including redevelopment of HUD scatter sites and even better use of adjudicated or other city owned properties.

The last thing I’ll mention related to barriers to housing opportunity for HUD clients is criminal background policies, again which I believe mirrors nationwide trends and research that demonstrates reduced recidivism with family reunification and housing stability. While Secretary Donovan issued guidance to public housing authorities (PHAs) explicitly allowing them to adopt more flexible admissions and continued occupancy criteria, Secretary Castro should take the next step and direct PHAs to increase housing choice for individuals that have paid their debt to society, or who may have faced possible arrest but without conviction.   In New Orleans, where 60 percent of African American males have faced arrest, the impact on families is considerable. 

  1. Conclusion

Swift and thoughtful policy interventions are needed to ensure that the next generation of New Orleanians—the Katrina generation—is not permanently set back. With over 39 percent of children living in poverty in New Orleans in 2013 and over half of voucher households including children, it is time we reset long term recovery patterns and promote equity for those who have been left out of the recovery.

Thank you for all of your time and the opportunity to present, and I’m happy to answer any questions you might have.

Monika Gerhart to the Select Committee on Hurricane Recovery

Posted on 14. May, 2012 by in Staff Testimony

Statement of Monika Gerhart, Senior Policy Analyst, to the Select Committee on Hurricane Recovery on May 14, 2012:

Chairman Brossett, Members of the Committee, thank you for the opportunity to speak today.

My name is Monika Gerhart, and I serve as Senior Policy Analyst for the Greater New Orleans Fair Housing Action Center.

Yesterday members of this committee and the Office of Community Development, together with our Congressional delegation, received a meeting request.  The Fair Housing Center and its partners in this work, including the Greater New Orleans Housing Alliance and the Louisiana Housing Alliance, would welcome the opportunity to sit down together and work to solution some of the challenges our clients and community members are facing.

That is, we collectively serve property owners wishing to rebuild.  We believe that between FEMA and d-CDBG HUD funds, the resources are available.  This may be the last pot of recovery funds our state will see, and we’d like to serve our clients, community members, and federal taxpayers in a responsible manner by ensuring that funds are best used to make people whole, address blight, and bring properties back into commerce.

I brought a few client stories that I think demonstrate both the challenges some property owners have faced as well as the solutions available.  These solutions range from implementation of new HUD duplication of benefits policies, addressing pilot reconstruction applicants that are enrolled in or think they are enrolled in the HMGP program, to thinking holistically about how to bring Road Home Option 1 applicants into compliance.  The Louisiana Land Trust is already in possession of over 17,000 properties, and we would argue that homeowners wishing to rebuild, rather than State or City government, are probably the best stewards of their own land.  That is, I think everyone in this room can agree that getting homes back on-line serves both individuals and local communities better than increasing the stock of government owned empty or blighted land.

GNOFHAC Clients: Duplication of Benefits and Blight

Mr. Frances

The homeowners are working to rebuild their demolished Lakeview property. They had received a flood insurance settlement of $81,000, all of which was used for a forced mortgage payoff. They then took out a SBA loan to buy another house to live in while they figured out what to do with their pre-Katrina residence. They applied for a Road Home grant and were awarded $120,000. The entire Road Home grant was taken by the SBA as a duplication of benefits. They applied for a HMGP Pilot Reconstruction grant to build a new home. They were stuck in FEMA clearance for over 3 years, and were finally told they were not in the active pipeline to receive a grant. The client is currently seeking private financing to rebuild their home, but have no other resources available.

Ms. Jane

The homeowner has been unable to complete repairs to her storm-damaged home in the 7th Ward of New Orleans. She received $150,000 from the Road Home, but the entire grant was stolen by a fraudulent contractor.  She applied for Pilot Reconstruction and was waiting to receive an award. GNOFHAC contacted OCD and was told that the client’s HMGP application was not in the active pipeline, but that OCD was working with the City of New Orleans through their blight partnership to stall any action against the property. The house had previously been up for auction by the City through its blight foreclosure process. The application is now on the waiting list for HMGP Pilot Reconstruction but the client has no other resources available to fix the house.

Ms. Patrice

The homeowner has been unable to repair her Gentilly home. Her home was completely destroyed, but because insurance proceeds were greater than the cost of damage, she was not eligible for a Road Home grant. Her entire flood insurance settlement was taken as a forced mortgage payoff, and she took out a SBA loan to help finance repairs. She was in line to receive a HMGP elevation award, but HMGP determined that the elevation cost for a 2nd story conversion was not feasible and advised her to apply for Pilot Reconstruction.  After she withdrew from elevation and applied for reconstruction, HMGP then determined that she would not be eligible for any funds for Pilot Reconstruction due to duplication of benefits calculations. She has appealed HMGP’s decision.

Mr. William and Ms. Marilyn

The homeowners are working to rebuild their demolished home in the Gentilly neighborhood of New Orleans. They received a Road Home grant of $80,000, including elevation, but the grant was significantly constrained by the pre-storm value. Unable to rebuild for that amount, the couple continues to live in New York. The couple never received any notice from OCD about HMGP, but learned about the Pilot Reconstruction program on a trip home in April 2011 and immediately contacted OCD.  HMGP put them on the late interest hold list. GNOFHAC contacted OCD and asked that they be put in the active pipeline tobe considered for Pilot Reconstruction, but OCD refused. In July 2011, OCD advised GNOFHAC that the applicant would be eligible for Blight Reduction Grant Adjustment if they withdrew from Pilot Reconstruction.  GNOFHAC worked with the clients to drop out of HMGP and apply for BRGA. The applicants received an additional BRGA grant of $68,000. This is still not sufficient to build a new home, and the applicants are seeking private financing to fill the gap.

Mr. Ellis

The homeowner has been unable to complete repairs to his storm-damaged home in New Orleans East. He received a Road Home grant of $138,500 and had used all of it to try to fix his house. GNOFHAC contacted OCD to determine if the applicant was eligible for any additional funds, and found out that he should have received an additional $11,500 in 2009 when the ACG cap was lifted, but that he was never notified. GNOFHAC assisted the applicant that was finally approved for an additional ACG grant.  The homeowner has significant additional home repair needs and it is unclear if this additional grant will be enough to get his home finished. He would likely be able to benefit from an affordable construction loan program.

I think that what these stories demonstrate- and those are just five out of an active client caseload of over 100- is that while the City’s code compliance and blight eradication efforts are in many ways aligned with homeowners’ individual struggles to get their properties back on line, we need to be able to work together with the State’s Office of Community Development to solution these issues.

Download a PDF of the testimony

Seth Weingart to the Select Committee on Hurricane Recovery

Posted on 17. Aug, 2010 by in Homeownership Protection Media & Pubs, Staff Testimony

Statement of Seth Weingart, Homeownership Counseling Supervisor, to the Select Committee on Hurricane Recovery on August 17, 2010:

There are many remaining unmet needs facing homeowners as a result of Hurricane Katrina. Estimates are that over 10,000 homes in New Orleans have not been rebuilt because homeowners did not receive enough money from the Road Home Program, and thousands more have been injured by the manner in which the state has implemented this program.  We continue to believe that the biggest obstacle to full recovery is the discriminatory manner in which the Road Home Program continues to calculate homeowner grants.

In November 2008, the Greater New Orleans Fair Housing Action Center, National Fair Housing Alliance, and 5 New Orleans homeowners filed a federal civil rights lawsuit against the LRA and HUD, alleging that the grant calculation formula used by the Road Home had a disparate, discriminatory impact on African-American homeowners. Because grants are based on the lower of pre-storm value and cost of damage, grants have been severely limited to homeowners who live in neighborhoods with predominantly African-American populations because they have lower property values. This is a legacy of continued racial discrimination in the housing market that undervalues comparable homes in areas with large minority populations. With damage costs far higher than property values, homeowners in predominantly African-American neighborhoods have not had a full opportunity to rebuild.

Just yesterday, the presiding judge in the case, Judge Kennedy, issued an order granting a preliminary injunction to the plaintiffs, forbidding the state from issuing any further Road Home grants that use the discriminatory formula. In his order, Judge Kennnedy stated, “plaintiffs will likely be able to show after discovery that the Option 1 formula is unlawful,” and the state has not provided “an explanation of the reason for taking pre-storm home values into account.” Judge Kennedy stated as well that the plaintiffs have a “likelihood of prevailing on the merits of their Fair Housing Act claim.”

Therefore, we believe the only lawful and equitable use of the remaining CDBG funds dedicated to the Road Home Program, is to provide all Road Home Option 1 recipients with grants on a non-discriminatory basis that does not use the pre-storm value in calculations. If the state finds that sufficient funds are unavailable, we would ask that the Additional Compensation Grant (ACG) be expanded to homeowners who earn up to 160% of area median income, to include more middle income homeowners who were especially impacted by the discriminatory formula. The state of Louisiana and city of New Orleans will not fully recover from Hurricane Katrina until this grave injustice is corrected.

Seth Weingart
Greater New Orleans Fair Housing Action Center
404 S. Jefferson Davis Pkwy.
New Orleans, LA 70119
504-596-2100
sweingart@gnofairhousing.org

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James Perry to US House of Representatives Financial Services Subcommittee

Posted on 21. Aug, 2009 by in Enforcement Media & Pubs, Staff Testimony

Testimony of James Perry, Executive Director, to the United States House of Representatives Financial Services Subcommittee on Housing and Community Opportunity on August 21, 2009:

Introduction  

Thank you Congresswoman Waters, Ranking Member Capito, and members of the Committee for the opportunity to testify regarding “The Status of the Big 4 Public Housing Developments”, housing challenges facing low income families in New Orleans, and additional affordable housing needs. My names is James Perry. I serve as Executive Director of the Greater New Orleans Fair Housing Action Center (GNOFHAC). GNOFHAC is a private, non-profit civil rights organization established in 1995 to eradicate housing discrimination in the greater New Orleans area. Through education, investigation, and enforcement activities, GNOFHAC promotes equal opportunity in all housing transactions, including rental, sales, lending, and insurance. GNOFHAC is dedicated to fighting housing discrimination not only because it is illegal, but also because it is a divisive force that perpetuates poverty, segregation, ignorance, fear, and hatred.

Across the United States, mixed-income communities have been lauded as an effective way to de- concentrate poverty, spur job opportunity, promulgate integration and decrease crime. New Orleans has sought to do the same by demolishing traditional public housing and constructing new mixed income housing. It was the model used to transform the one hundred percent (100%) low-income St. Thomas Public Housing Development into the mixed-income River Gardens apartment complex.

However, a core question surrounding the mixed income model’s success lies far outside the walls of River Gardens or any other mixed-income development in New Orleans because most residents don’t get to return to the new developments. For example, about 1,500 low-income families resided at St. Thomas. But River Gardens, the reincarnation of St. Thomas, only houses about 246 low-income families. Many of the remaining families received Housing Choice Vouchers and were encouraged to rent apartments across New Orleans. The idea was that low-income residents would be integrated across the community solidly establishing New Orleans as a mixed-income community. By subsidizing the amount that a low-income renter can afford, the Housing Choice Voucher Program (HCVP) professes to afford low-income residents the opportunity to live in middle and upper-middle income communities.

In a purely academic sense, this may sound ideal. But its real world applicability falls woefully short. The reason? Landlords are not accepting Housing Choice Vouchers. This study found that eighty- two percent (82%) of landlords either outright refused to accept vouchers or added insurmountable requirements for voucher holders making it impossible for voucher holders to rent units. The Housing Authority of New Orleans (HANO) has not released much data on the utilization rate of vouchers post-Katrina but it did double the 60-day term that HANO clients usually have to use the vouchers due to tenants’ inability to locate landlords willing to accept the vouchers.

The relative success of the New Orleans metropolitan economy relies on having a diverse population with diverse incomes. For example many employees of the New Orleans hospitality industry have incomes at or below the poverty level and must rely on government housing assistance as a result. Most schoolteachers make incomes low enough to qualify as tenants of low-income housing tax credit developments. Without housing for workers in the hospitality industry or teachers, it will be difficult for our economy to be successful. In 2007, GNO inc., an economic development incubator in New Orleans, estimated that there were approximately 20,000 unfilled hospitality and tourism jobs. When they surveyed likely employees, they found overwhelmingly that prospective employees could not accept the jobs because they could not find and/or afford housing in New Orleans.

New Orleans cannot be successful if all residents cannot find decent, safe, affordable housing. This study clearly indicates that a large cross-section of residents is having significant trouble doing so. Hopefully the presentation of these facts is a step in the important path towards insuring fair housing choice for all New Orleans residents.

Overview of Voucher Programs in New Orleans

The Housing and Community Development Act of 1974 created Section 8 Voucher Programs. In 1998, the Quality Housing and Work Responsibility Act consolidated the Section 8 Voucher Programs under the Housing Choice Voucher Program (HCVP). Under the HCVP, voucher holders secure rental housing from private housing providers and contribute up to thirty (30) percent of their income to cover the cost of rent. Local Public Housing Authorities (PHAs) manage the HCVP and pay the difference between thirty (30) percent of a voucher holder’s income and the Fair Market Rent (FMR). Eligible households generally must have incomes that fall below fifty (50) percent of the Area Median Income (AMI). The HCVP relies on the private market to meet the housing needs of low-income residents. The program is designed to provide low-income residents with more housing choices, that might ultimately help to de-concentrate poverty and better integrate neighborhoods.

Starting in the mid-1990s, the Housing Authority of New Orleans (HANO), like many other PHAs around the country, launched a redevelopment effort in its public housing developments that coupled a reduction in the number of public housing units with an increase in the number of housing vouchers issued. Due to persistent mismanagement, HANO has been in federal receivership under HUD’s management since 2002.    In the wake of Hurricane Katrina, HANO and the U.S. Department of Housing and Urban Development (HUD) are aggressively furthering a campaign that involves an increased reliance on tenant-­‐based vouchers in the New Orleans area with the demolition of the B.W. Cooper, C.J. Peete, Lafitte, and St. Bernard housing developments, and the planned redevelopment of mixed-income communities with significantly fewer public housing units. In April 2009, the Office of Inspector General released an audit report that found decisively that HUD could not demonstrate that its receivership had improved HANO’s performance.

Currently, 8,975 households in the New Orleans Metropolitan Statistical Area (MSA) participate in the HCVP. Ninety-nine percent (99%) of voucher holders in Orleans Parish are African American. A breakdown of HCVP data by Parish is available in the HUD Resident Characteristics Report in the Appendix.

After Hurricane Katrina, the Federal Emergency Management Agency (FEMA) launched a voucher program to assist displaced families in need of housing, and in 2007, HUD assumed management of the program called the Disaster Housing Assistance Program (DHAP). HUD has been working with local housing authorities since early 2008 to transition families off of the DHAP program, and although the Obama administration has issued a limited two-month extension for voucher-holders that have applied for the transition, the DHAP program is set to end August 31, 2009. Income eligible families are to receive traditional Housing Choice Vouchers, however many families in need of ongoing assistance are not eligible for the transition, many families have not been able to complete the transition process due to administrative delays at PHAs, and some families eligible for the transition have not engaged in the process.

Summary of the Problem

Housing Choice in Crisis is an investigation of bias against Housing Choice Voucher holders in the greater New Orleans rental housing market. Though discrimination on the basis of a renter’s source of income is not currently illegal, it is important to understand the rate at which voucher holders encounter discrimination in evaluating the functionality of the Housing Choice Voucher Program (HCVP).

Housing Choice in Crisis examined one hundred (100) rental properties in the greater New Orleans area to determine whether available rental units would be offered to voucher holders relying on the HCVP. Rental properties investigated advertised rental rates of $1250 or under for a two-bedroom unit and did not advertise any preference in favor of or against renting to voucher holders. In addition to the audit of rental units for source of income discrimination, Housing Choice in Crisis includes results from a series of interviews with landlords, housing advocates, tenants and administrators to assess the administration of HCVP.

Landlords denied voucher holders the opportunity to rent units eighty-two percent (82%) of the time, either by outright refusal to accept vouchers or by the addition of insurmountable requirements for voucher holders making it impossible for voucher holders to rent units. Landlords refused to accept housing vouchers seventy-five percent (75%) of the time, and of the twenty-five percent (25%) of the landlords that purported to accept Housing Choice Vouchers, seven percent (7%) imposed additional conditions that would have made it nearly impossible for a voucher holder to rent the property. Therefore, housing providers said they would accept vouchers as a rental payment without any obstacles or additional terms or conditions only eighteen percent (18%) of the time.

The data demonstrates that the alarming rate of discrimination against voucher holders is driven by two primary causes: discrimination against and stereotypes of low-income, African Americans and dysfunctional administration of the HCVP. The Greater New Orleans Fair Housing Action Center (GNOFHAC) has proposed several recommendations that would reduce the alarming rate of source of income discrimination in the region.
As federal and regional housing policy increasingly relies upon the voucher program as a solution to our affordable housing needs, it is critical that we confront prejudice harbored against voucher holders and rectify the dysfunctional administration of the program. Confronting the problem of extensive discrimination against voucher holders will require a coordinated effort among public and private actors.

Testing and Investigation Methodology

One hundred (100) phone-tests were conducted during the three-month period of May to August 2009 across the New Orleans metropolitan area to determine whether available rental units would be offered to voucher holders relying on the Housing Choice Voucher Program (HCVP). Testers (persons trained to pose as apartment-seekers) were given substantially similar profiles that demonstrated they were qualified to rent the apartments in question. Testers made inquiries about matters such as the availability of the advertised unit and the rental terms and conditions.
Phone tests were performed in three stages. The first stage was conducted using a white tester without a housing voucher. In the second stage, a white female tester posing as a voucher holder contacted the landlord. The tester in the third stage was an African American female voucher holder.
The United States Supreme Court has upheld the use of the testing process as a legal and effective tool to investigate claims of housing discrimination. Both the U.S. Department of Justice (USDOJ) and Department of Housing and Urban Development (HUD) use testing to conduct investigations.

All testers received standardized training from the Greater New Orleans Fair Housing Action Center. The training included both classroom and field training. Testers are taught to be objective fact- finders and to report, but not interpret, the results of their test.

Selection of Sites

Rental property advertisements selected for testing were identified in four (4) regional publications: Nola.com, Gambit, Craigslist.org, and Renter’s Guide. Rental properties were selected at random subject to two criteria. First, testing was limited to units with an advertised rental rate of $1250 or below for a two-bedroom unit, such that the properties would be affordable to voucher-holding households. Second, selection was limited to properties that did not advertise any preference in favor of or against renting to voucher holders. The sites were then selected at random, sampling from parishes within the greater New Orleans metropolitan area.

Interviews with Landlord, Housing Advocates, Administrators and Tenants

A set of interviews was carried out with housing providers that advertised in the four regional publications listed above, who explicitly indicated whether they engage in or refrain from participating in the HCVP. Landlords were asked to rate their experiences with and perceptions of the HCVP. Eighteen (18) landlords were contacted. Interviews with landlords were conducted by telephone in a one-week period in August 2009. This report was also informed by eight (8) interviews of housing advocates and administrators from June to August 2009, including the Housing Authority of New Orleans, Louisiana Recovery Authority, Louisiana Housing Finance Agency, Southeast Louisiana Legal Services, Tulane Civil Litigation Clinic, GNO Community Data Center, Urban Institute, and Policylink. Information on tenant experiences with the HCVP was assembled using a questionnaire that was distributed to legal aid and social service agencies, and from documentary film footage of four (4) years of interviews with voucher holders by JoLu Productions.

Testing Results – Findings  

In the one hundred (100) phone tests performed, landlords outright refused to accept vouchers or added insurmountable requirements for voucher holders eighty-two percent (82%) of the time.

Landlords provided varying reasons for their refusal to rent to voucher holders. Explanations that commonly arose among respondents included fear of not receiving rental payments or security deposits, and past experiences or problems working with the Housing Authority of New Orleans (HANO) office. The statements housing providers expressly made to prospective tenants are not exhaustive of the possible reasons that voucher holders were denied. Specifically, since a vast majority of voucher holders are African American, it is unlikely that prejudice imbued in the rental unit denial was expressed to the prospective tenants. As ninety-nine percent (99%) of Housing Choice Voucher holders in Orleans Parish are African American, an eighty-two percent (82%) rate of discrimination has a clear discriminatory impact on race, a protected class under the Fair Housing Act.

Housing providers said they would accept vouchers as a rental payment without any obstacles or additional terms or conditions only eighteen percent (18%) of the time.

Additional Terms and Conditions for Voucher Holders

Of the twenty-five (25) landlords that accepted Housing Choice Vouchers, seven (7) imposed additional conditions. Additional conditions included fees or rental deposits, or a more rigorous rental-screening process that were not required of non-voucher holders. In most cases, the effects of an additional security deposit would make it nearly impossible for a voucher holder to rent the property, making such additional requirements tantamount to a denial of the unit.

Testers were informed by four (4) landlords that they would only accept voucher holders if their voucher amount was more than the advertised rent, which would enable the landlord to collect additional rental monies above their asking price. Contrary to Department of Housing and Urban Development (HUD) policy, one landlord stated that the rental amount advertised was for “cash paying tenants” and that if a voucher holder rented the unit, the price would increase to be equal to the voucher amount of $1030. The landlord also asserted that the tester should not worry about the higher price because “no money would be coming out of [the voucher holder’s] pocket.”

Heightened Discretion

Housing providers used additional discretionary measures with housing voucher holders during this study. Landlords stated that they would allow a voucher holder to live on their property only after having met them or that it would “depend on the person.” Two landlords indicated to white voucher holders that although they did not normally accept housing vouchers, the tester sounded “nice” and therefore they would consider renting to them.

Statements like this, when they indicate a preference based on race, are illegal under the federal Fair Housing Act and enforceable in federal court. These discretionary tactics often serve as a pretext for discrimination against marginalized groups. This is especially true for families with children and African American female heads of households, who are the primary users of housing vouchers in the New Orleans area.

Racial Discrimination

In nine percent (9%) of tests in which a tenant was denied a voucher, landlords denied African American testers on the basis of their voucher after having previously told a white tester that rental vouchers were taken at the property. As evidenced by the pervasive source of income discrimination highlighted in this audit, voucher holders face extreme challenges when locating housing providers that accept rental voucher payments. In addition, the challenge voucher holders face when securing housing increases when the home seeker is African American. Such additional discriminatory practices further shrink the number of available rental properties, further removing the “choice” in the HCVP. This has broad implications for the HCVP in New Orleans, since ninety-nine percent (99%) of voucher holders are African American.

A.  The Discrimination Against Voucher Holders Reflects: Discrimination Against Low-income African Americans in Both Intent and Impact
The findings from the present study indicate that the alarming rate of discrimination against voucher holders in the greater New Orleans housing market is generated in part by intentional housing discrimination against African Americans, and results in discrimination in the form of disparate impact upon African Americans. One of the primary reasons voucher holders experience a high rate of discrimination in the New Orleans area is because of prejudice harbored by housing providers against low-income, African American voucher holders.

The discriminatory intent behind the denial of voucher holders is clear from surveys conducted with housing providers in the greater New Orleans area, which revealed prominent stereotypes in the perceptions of Housing Choice Voucher Program (HCVP) participants. A majority of the landlords surveyed identified voucher holders in a racially coded fashion, such as wearing “dreadlocks,” a hairstyle common in the African American community. When one housing provider was asked whether there were any changes that could be made to the voucher program that would make him reconsider his decision to refrain from program participation, he responded, “[not] until Black ministers…start teaching morals and ethics to their own, so they don’t have litters of pups like animals, and they’re not milking the system.” In spite of the fact that voucher holders must contribute thirty percent (30%) or more of their income towards rent, the use of racially explicit and coded language was coupled with the perception that voucher holders “don’t want to work” and are “fraudulent.”

A component of the high rate of discrimination found against voucher holders was derived in part from discrimination purely on the basis of race. In other words, in nine percent (9%) of instances housing providers agreed to offer housing to a white voucher holder while denying housing to an African American voucher holder.

Racial and class stereotypes hold that low-income African Americans import social problems, including unemployment, crime, drugs, and unstable families, and that these problems will ultimately disrupt life in a neighborhood and lower property values. See Beck, Gina Kline, “Thompson v. HUD: Groundbreaking Housing Desegregation Litigation, and the Significant Task Ahead of Achieving an Effective Desegregation Remedy Without Engendering New Social Harms,” 7 University of Maryland Law Journal of Race, Religion, Gender and Class (2007). The prejudice that links African Americans and the social ills of the inner city can cause a landlords to believe they are exposing their property to an increased risk from those harms when considering a tenant in the voucher program. George C. Galster, The Evolving Challenges of Fair Housing Since 1968, 4 CITYSCAPE 123, 130 (1999).

In addition, the fact that landlords denied voucher holders from renting units at the alarming rate of eighty-two percent (82%) results in a discriminatory disparate impact upon African Americans. Since ninety-nine percent (99%) of Orleans Parish voucher holders are African American, discrimination against voucher holders in general results in a discriminatory impact on African Americans.

B.    The Discrimination Against Voucher Holders Reflects: The Dysfunctional Administration of the Housing Choice Voucher Program
A second reason voucher holders experience a high rate of discrimination in the New Orleans area is because dysfunctional administration of the Housing Choice Voucher Program (HCVP) deters housing providers from engaging in the program. Both small and large-scale housing providers interviewed reported extreme delays and failures of Housing Authority of New Orleans (HANO) to make rent payments. They reported HANO staff is often hard to reach, discourteous, slow and unhelpful.

The general sentiment of housing providers surveyed was summarized in one small-landlord’s description of HANO as “very unorganized, very arrogant, very slow, and not helpful.” Another small-landlord stated, “applying is easy, dealing with HANO is not.” A central problem identified is the extreme difficulty in communicating with HANO staff. One small-landlord stated, “I faxed HANO the needed information 12 times for the rent I was never paid,” and another small-landlord stated that he “never could get anyone on the phone at HANO.” In a common sentiment, a housing provider explained, “I called everyday for a month and never once got a call back.” Larger housing providers echoed similar sentiments.

Housing providers described HANO’s payment process as “very slow” and “extremely slow.” Landlords must ensure their units meet certain Department of Housing and Urban Development (HUD)-mandated habitability standards, and the housing authority is required to make a yearly inspection. See 24 C.F.R. § 982.404(a). Small and large-scale landlords stated that it takes HANO one (1) to two (2) weeks to have an initial habitability inspection conducted. After the landlord and tenant negotiate the rent, the housing authority must give final approval of the contract. See 24 C.F.R. §§ 982.308, 982.305. Housing providers commonly stated that it takes as much as two (2) to three (3) months before HANO signs a lease, and that it consistently takes 6-8 weeks to sign a contract. One small-landlord stated, “I passed an inspection on June 9th and didn’t get paid till August 11th.”

In some instances, housing providers reported HANO simply did not tender payment that was due on a voucher contract. One small-landlord interviewed complained, “HANO owes me $3,000 for the last tenant I accepted. I did not get paid for a day of their lease, and the hassle of getting the money is not worth the effort.” A large-scale housing provider indicated that, in part as a result of the backlog from the Disaster Housing Assistance Program (DHAP) transition, HANO owes his management company upwards of $25,000 in rent associated with vouchers. A landlord cannot take action against a tenant for non-payment if the housing authority has failed to pay the subsidized portion of the rent but the tenant has paid his contribution on schedule. Therefore, in instances where HANO fails to pay its portion of the rent in a timely fashion, there is no clear recourse for demanding payment from HANO by the landlord. Thus, in many reported instances, when voucher holders were able to secure a unit (18% of the time), landlords were left with no recourse but to evict the low-income tenant, who had been paying his or her portion of the rent.

Recommendations

This study examines the rate of acceptance of Housing Choice Vouchers by landlords in the New Orleans metropolitan area.    An alarming eighty-two percent (82%) of landlords refused to accept the vouchers or added insurmountable requirements for voucher holders. In order to better serve the low- income rental housing needs in the New Orleans Metropolitan Statistical Area (MSA), the Greater New Orleans Fair Housing Action Center (GNOFHAC) makes the following recommendations.

1) Housing analysts should implement a study of whether the HCVP in New Orleans is meeting its stated goals of increasing integration and enhancing access to opportunity.

The stated goals of the HCVP are to de-concentrate poverty and promote racial integration. 42 U.S.C. § 5301 (1988). However, due to the extremely high levels of discrimination faced by vouchers holders highlighted in this report, HCVP participants are more likely driven to locate housing in high-poverty areas with few opportunities, thereby fundamentally thwarting the goals of the voucher program.

Further analysis should be conducted into whether the HCVP is meeting its stated goals of de- concentrating poverty and promoting integration in the region, or whether it is further perpetuating the systems of concentrated poverty that it is meant to address. An interviewed voucher holder stated, that they “cannot find affordable housing in a nice neighborhood.” As a result of extensive discrimination and limited choice, there is the possibility that the voucher program is disrupting existing support networks, while forcing voucher holders to reside in high-poverty areas.
Researchers should further examine formal and informal resource opportunities and networks available to low-income residents. Analysts should consider sociological factors like the reluctance of voucher holders to move from areas where they have family or social ties. One voucher holder describes her former experience living in public housing: “Despite the problems we had, we still got together, social events as families, as a community. I would prefer to be here than on a voucher.” Policymakers should then consider these support networks in designing the structure and administration of housing policy.

2) The federal government should immediately intervene to rectify problems with the administration of voucher programs in New Orleans.
HANO’s administration of the HCVP and of the transition from DHAP to HCVP is excessively dysfunctional. This finding stands in direct contrast to public statements made by HANO and HUD officials, who tend to blame processing delays and errors on tenants and property owners for not correctly engaging in the process. See Katy Reckdahl, “Rents rise as HANO trudges through transition,” Times-Picayune, July 13, 2009.
The federal government should immediately commission an independent investigation into the alleged dysfunction of the HCVP in the greater New Orleans region. Housing experts and local housing providers interviewed in this investigation stated that HANO’s ineffectiveness and dysfunction related to its limited capacity, especially in regards to the massive DHAP transition it is helping to manage. Tenants cited a consistent inability to reach HANO representatives on the phone, and many felt mistreated or neglected. One voucher holder described, “Some of the workers back there do not do their jobs… and gives the clients a hard time.” Therefore, this investigation should specifically examine issues of capacity, especially in terms of staff and training, and measures should be implemented to ensure that HANO has the staff and training needed complete an acceptable DHAP to HCVP transfer by the end of October 2009.

3) HUD should work in partnership with local officials and HCVP participants to develop the HANO Board of Directors to enhance oversight of HANO administration.

HANO has been under HUD receivership since 2002, and while under receivership, HANO’s board of commissioners has consisted of one HUD-appointed official from Washington, DC, rather than a local board of directors.

In a December 2007 letter to HUD, Mayor C. Ray Nagin stipulated that demolition permits for two of the largest public housing complexes in the city would only be granted after the “expansion of the HANO Board from one member to three members, to include the Mayor or his designee and a public housing resident.” However, the stipulation that HUD reorganize HANO oversight to include a three-member panel was not instituted even as demolition proceeded.

In an April 2009 report, the Office of Inspector General recommended that HUD “appoint a monitoring team, independent of the receiver, to ensure that [HANO] progresses toward local control.”

HUD and HANO should undergo a process to establish a three-member board of directors or a full local board in order to create greater accountability for the shortcomings of HANO’s administration.

4) The federal government, the State of Louisiana and local municipalities should adopt legislation that prohibits Source of Income discrimination.
The present study finds that landlords deny housing to applicants because they are voucher-holders in eighty-two percent (82%) of the cases investigated. This figure indicates that significant portions of the private housing market remain unavailable to voucher holders in need of quality housing in high opportunity areas. One tenant attested that he “cannot find affordable housing in a nice neighborhood, or comfortable homes” that will accept his Housing Choice Voucher. Another tenant confirmed that, “HANO didn’t do nothing for me yet. They gave me [a voucher] but everywhere I went I couldn’t use it.”.

The federal government, the State of Louisiana and municipal leaders in the New Orleans metropolitan area should establish task-forces to investigate the impact of source of income discrimination on the operation of the HCVP, and federal, state and municipal officials should adopt legislation that establishes “source of income” as a protected class in federal, state and municipal fair housing laws in order to ensure that the HCVP operates effectively in the region.

5) Local and national foundations should fund a public education campaign to address the prejudice surrounding voucher holders.
Research conducted during the course of the present study indicates that many people have strong prejudices against voucher holders, which severely limits the effective operation of the HCVP in the New Orleans metro area. Many of these prejudices are based in and relate to stereotypes about low- income African Americans. The observed animosity toward voucher holders is also fueled by misinformation about HCVP participant requirements and the widespread need for housing assistance throughout the New Orleans area.

The New Orleans regional economy relies upon many low-wage jobs in order to function. Much of the housing that low-wage workers occupied before Katrina was lost in the storm, and rents have since escalated by an average of forty percent (40%). See the GNO Community Data Center August 2009 New Orleans Index. All able-bodied HCVP participants must meet income requirements, which require that families pay thirty percent (30%) their household income in rent. Voucher holders are necessary to the operation of the regional economy, but they could not afford to live in the region without a housing subsidy. Voucher holders whose testimony appears in this report include a school security guard, a cook at a local restaurant, and a construction worker. As one tenant put it, “Even though you’re working, you’re not making really enough to really help pay bills, take care of your family. And once your expenses starts taking practically everything you make [to pay for rent, utilities, security deposit, and moving expenses], you have nothing to live on.”

Funding should be provided for a media and public education campaign that informs the public of these dynamics, and confronts the prejudice against voucher holders.

6) HUD should institute a moratorium on the demolition of additional hard units of public housing in the New Orleans region until it is sure that the HCVP is performing properly.

Interviews with housing advocates, analysts, and tenants in the present study indicated that the structure of the HCVP fails to consider tenant burdens, such as the need to pay for security deposits, utility expenses, moving costs, and the modification of units in the private market for people with physical disabilities. An interviewed voucher holder stated, “Some of the landlords are not giving you a stove [or] refrigerator… when you were staying at HANO they supplied all that for you.” Another voucher holder stated, “My utilities run like $445. That’s just for electric. I have water bill and then it costs $50 to cut my yard… It’s too much… I don’t know how I’m going to pay it… My light bill exceeds my income.” These expenses are generally covered for public housing residents, however they are difficult for voucher holders who are extremely low-income, elderly, or have disabilities, and in some cases preclude their participation in the program. Generally similar needs would be better attended to in hard units of public housing. However, with 4000 units of public housing demolished, there are few opportunities for people who are extremely low-income, elderly, and/or have disabilities.

Additional analysis is needed to further understand how these expenses impede the delivery of appropriate housing options for all groups eligible for assistance. There is a significant need for affordable housing throughout the region due to the tremendous loss of rental housing during Hurricane Katrina, and until there is a full assessment of the operation of the HCVP and the need for appropriate housing options in the region, HUD should impose a moratorium on the demolition of hard units of public housing in the greater New Orleans area.

7) HUD should analyze the possibility of taking a regional approach to voucher administration, rather than segmentation by individual Public Housing Authorities.

HCVP vouchers are “portable,” meaning that they can be transferred from one jurisdiction to another in accordance with the policies of Public Housing Authorities (PHA). However, management of voucher program enrollment among area-PHAs and voucher transfer between area-PHAs is not coordinated, thus limiting and complicating housing choice for voucher holders in the region.

A voucher holder looking at several neighborhoods in the New Orleans metro area may find themselves under the jurisdiction of a number of different PHAs. HANO currently accepts voucher transfers from other jurisdictions in the region, however neighboring jurisdictions do not as readily accept transfers. Therefore, voucher holders face limited regional choice, hampering economic and racial integration on a regional level.
Analysis should be done to better understand the impact that metro-area PHA policies have on housing choice and to consider the possibility of establishing a “single point of access” for voucher applicants in a metro area with a joint waiting list and set of resources. Recommendations should be identified to institute the HCVP on a regional level in a manner that promotes regional integration and undermines the discriminatory actions of neighboring parishes.

8) HUD needs to address DHAP families facing housing crisis, and the federal government should commission a study of the operation of DHAP and how it could be better designed for future disasters.

HUD recently announced that it plans to assist eligible families in the DHAP program through October 2009. Service providers and public administrators indicated that greater communication is needed between local, federal, and state officials to ensure that families facing housing insecurity at the end of the DHAP program, including families that are both eligible and ineligible for transition to the HCVP, receive the support they need to transition out of the program successfully.

This will have to involve effective case management, better communication between involved agencies, and supporting local PHAs with an increase in staff and training to ensure that the housing authorities are able to complete the DHAP to HCVP transition.

Additionally, the federal government should commission a study of the post-Katrina voucher assistance programs – including Katrina Disaster Housing Assistance Payment Program, Disaster Voucher Program, and Disaster Housing Assistance Program – and issue a set of proposals that will yield a more effective program in the event of future disasters.

9) HANO and other area PHAs should implement services to support voucher holders in their efforts to locate housing and attract quality landlords to the HCVP.

Families who receive a voucher under the HCVP are independently responsible for locating an acceptable rental unit. See 24 C.F.R. § 982.302. For residents leaving traditional public housing, using a voucher may be their first interaction with the private housing market. While the PHA may provide guidance – HANO’s only support is a listing of units whose owners wish to participate in the program. Voucher holders must make contact with the landlords and initiate the rental process. Voucher holders are left to identify housing through their own means, often without reliable transportation, sufficient time away from work, or full knowledge of available residential communities or opportunities.

The challenge of locating housing is even more of a burden in a post-Katrina context as low-income residents still displaced may have a difficult time traveling back and forth from wherever they currently reside to locate habitable housing with a voucher in New Orleans. This is particularly true, given the limited supply of post-Katrina rental housing, the number of visits to the HANO office that are often required, and the fact that inspections and paperwork expire after a period of time.

Area PHAs should implement services to support voucher holders in their efforts to locate housing and attract quality landlords to the HCVP. Early programs like the Gatreaux initiative in Chicago, which partially inspired the HCVP, relied on providing intensive case management and education to program participants. Later manifestations of voucher programs omitted these programmatic supports. However, if the HCVP is to provide adequate housing choices, voucher holders must be empowered to navigate the private housing market.

10) HANO and other area Public Housing Authorities should implement services to proactively and reactively resolve housing authority administration disputes and frustrations.  HANO and other area-PHAs must also implement outreach techniques and service delivery that attract quality landlords to participate in the HCVP. Audit results indicate that, among housing providers, HANO has a bad reputation due to poor customer service and untimely rent payment.  HANO and other area-PHA should establish a meaningful structure for initiating input from the stakeholders involved in the HCVP. The high rate of discrimination is a symptom of distrust among the various actors within the program—housing authorities, housing providers, and tenants.  HANO and other area PHAs should also consider creating an ombudsman office so that both voucher holders and property owners can resolve issues with housing authority administration in meaningful ways on an individual, case-by-case basis. A process for effectively resolving disputes and frustrations is critical to the proper functioning of the HCVP.

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Seth Weingart to City Council Housing & Human Needs Committee

Posted on 29. Sep, 2008 by in Homeownership Protection Media & Pubs, Staff Testimony

Seth Weingart, Homeownership Counseling Supervisor, to City Council Housing and Human Needs Committee on September 29, 2008

My name is Seth Weingart, I supervise the Hurricane Relief and Homeownership Protection Project at the GNO Fair Housing Action Center. I want to thank the members of the committee for allowing me the opportunity to speak before you today. For the past 2 1⁄2 years, we have provided counseling to over 400 homeowners with their rebuilding needs. A large part of the individual counseling we do involves helping homeowners move through the Road Home process and appeal grant determinations.

Through our work, one of the biggest problems we have found in neighborhood recovery is the lack of funds available to homeowners to repair Katrina-damaged homes. The Road Home is not providing enough money to homeowners to get their properties back to pre- storm condition, many are forced to live in substandard conditions as they struggle to complete what repairs they can with what they have. Some families are still in FEMA trailers, some are still not able to come home and have to rent apartments in Baton Rouge, LaPlace, etc. And they are facing gaps of sometimes more than $100,000 in the amount they realistically need to fully restore their homes.

A major reason for this slow pace of return, in addition to the slow pace of the Road Home in giving out grants, is the Road Home’s formula to calculate grants which has clearly not provided enough money for families to return to their homes. PolicyLink’s study shows how homeowners in neighborhoods with lower property values face an insurmountable gap in funding needed for rebuilding, and it is impossible for that money to come from any other source. 3 years after the storm, insurance proceeds are gone, costs of materials and basic expenses continue to rise, and credit is hard to come by, especially for homeowners who have had to go into debt while they’ve waited for promised Road Home money to come through, which often was less than people expected. You have all heard from applicants who were told they were going to receive one amount and then went to closing only to be told they were getting much less. One reason for this has been the Road Home’s policy, up until recently, to not only use an unfair pre-storm value as the basis of grants, but to also use the lowest pre-storm value on file when the program has multiple appraisals, which it usually does.

Clearly, pre-storm value is not a fair measure when one property can at the same time be worth $250,000 and $137,000 as we have seen. Or the same property be worth $77,000 and then $110,000. This seems to be such a subjective measure of worth, we do not understand how the state ever decided to use it in the first place. In addition, there is a more pernicious element to this formula, because no matter the pre-storm value, in many of the hardest hit neighborhoods pre-storm values were considered so low, that they are always substantially less than the cost of damage, leading to even larger gaps in the amount of money available for rebuilding. It’s not uncommon to see gaps of over $100,000, and there really is nowhere else for people to come up with this money. This problem is most significant in the Lower 9th, New Orleans East, and Gentilly, predominantly African-American neighborhoods that had serious flood damage from Katrina. Most homeowners in these neighborhoods are facing gaps of more than $40,000, and the average is over $70,000 in the 9th and NO East.

We believe the City Council can help, as you helped in pushing the LRA to rescind the September deadlines for Road Home applicants. We are asking the City Council to use its influence to ask the LRA to change the grant calculation formula, to take pre-storm value out of it. To use the cost to repair as the basis for determining the gap that homeowners are facing and to fund that gap. To use any surplus Road Home funds to provide additional funds to homeowners facing large gaps. The use of pre-storm value in the grant formula has proven to be seriously unfair and we believe it should be taken out and replaced with a formula that takes into account the damages incurred.

October 1, 2008 LHA/LDRF/PolicyLink Convening
Road Home Gaps and Fair Housing Implications of the Road Home Grant Formula

The Road Home Program was designed to compensate homeowners for their losses from Hurricanes Katrina and Rita, and implicit in the program is that homeowners would use Road Home grants to rebuild wind and flood-damaged homes. Unfortunately, the grant calculation formula has made this exceedingly difficult, especially for low and moderate- income homeowners and those in predominantly African-American neighborhoods.
Because the formula uses the lower of pre-storm value or estimated cost of damage, it effectively penalizes homeowners who lived in communities with low property values, even though the value of a house has no relation to the actual cost of repairs. In cases where the pre-storm value is substantially less than the estimated cost of damage, homeowners are facing a large shortfall in the amount of money needed to return their homes to livable condition. In the predominantly African-American neighborhoods of Gentilly, the Lower 9th Ward, and New Orleans East, the average cost of damage was substantially higher than the pre-storm value.

Homeowners in these communities are facing these gaps as a result of the legacy of discrimination in the housing market and the historically lower property values in predominantly African-American neighborhoods. Home values were and continue to be lower in these neighborhoods, in part as a result of federal government policies and the real estate practices that developed out of them that automatically undervalued homes in neighborhoods with significant numbers of minorities, regardless of the general condition of the homes in the area.

Using the Road Home’s estimated cost of repairs, we have seen numerous cases where homeowners are facing gaps upwards of $100,000 in the money needed to repair their homes. This gap is especially clear for those homeowners who received insurance settlements but whose income made them ineligible for the additional compensation grant. We are talking about responsible homeowners who had insured their properties, but because of the severity of the damage, will not have nearly enough money to rebuild, and have no other source of funds to do so, being unable to qualify for a loan. PolicyLink’s “Long Road Home” documented these gaps, showing that over 60% of homeowners in New Orleans East and the Lower 9th Ward faced gaps greater than $40,000. The average gap in New Orleans East was almost $70,000 and was over $75,000 in the Lower 9th. Citywide the cost of damage is on average $30,000 larger than the pre-storm value and it is higher in every neighborhood except Lakeview where the cost of damage is actually less than the pre-storm value. So none of those folks got enough to rebuild.

These gaps are exactly the issue the Road Home was meant to address, but it has failed to. Clearly the program is not working when the difference between the cost of damage and the pre-storm value in many of these cases is well over $100,000. One homeowner in New Orleans East who we have been assisting is facing a shortfall of over $170,000 due to the Road Home’s formula. He only received $16,000 from the Road Home, even though his estimated cost of damages was over $300,000. He has been struggling to get his house fixed while having to pay rent for an apartment out of the city, struggling to maintain his mortgage payments so he doesn’t lose his house, and has no ability to make up his funding gap in any way. There is no credit available to him. He can’t get any financing to make up the gap. His insurance costs have gone up dramatically. His pension and disability check gives him just enough to get by, but not enough to get back.

Any analysis of the rebuilding gaps must take into account all sources of funds including insurance, Road Home, FEMA, SBA loans, and private financing. From all the information we have available, it is clear that African-Americans and low and moderate- income families received the least total amount of money. Their homes were insured for less because they were undervalued, so they got less insurance. They didn’t make enough money, so they couldn’t qualify for or afford a SBA loan. And then the Road Home, that was supposed to make up the gap, actually made it worse, by not meeting its promise, as grant sizes were much less than anticipated.

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James Perry to the House Committee on the Judiciary

Posted on 29. Jul, 2008 by in Enforcement Media & Pubs, Homeownership Protection Media & Pubs, Staff Testimony

Testimony of James Perry, Executive Director, to the Subcommittee on Constitution, Civil Rights, and Civil Liberties of the House Committee on the Judiciary Thursday, July 29, 2010:

Introduction

Chairman Nadler, Ranking Member Sensenbrenner, and members of the Committee, thankyou for the opportunity to testify regarding fair housing and the 5th Anniversary of Hurricane Katrina. My name is James Perry. I serve as Executive Director of the Greater New Orleans Fair Housing Action Center (GNOFHAC). GNOFHAC is a private, non-profit civil rights organization established in 1995 to eradicate housing discrimination in the greater New Orleans area. Through education, investigation, and enforcement activities, GNOFHAC promotes equal opportunity in all housing transactions, including rental, sales, lending, and insurance. GNOFHAC is dedicated to fighting housing discrimination not only because it is illegal, but also because it is a divisive force that perpetuates poverty, segregation, ignorance, fear, and hatred. I also serve as President of the Louisiana Housing Alliance, a statewide coalition of housing advocates, non-profit housing providers, homeless service providers, advocacy organizations and
local housing coalitions. We work to insure adequate affordable and low-income housing opportunities in Louisiana.  August 29, 2010 will be the fifth anniversary of Hurricane Katrina. Five years ago, America’s Gulf Coast was decimated by the Hurricane and hundreds of thousands of residents were displaced. Each day since August 29th, Gulf Coast residents have struggled to rebuild and reclaim their lives. Regretfully, people with disabilities, families with children, low-income families and people of color have been confronted with shocking barriers that have slowed and in some cases, completely thwarted their recovery.

Many of us are familiar with the typical stories of landlords, realtors and lenders engaging in individual acts of discrimination. While these problems certainly persist along America’s Gulf Coast, a disconcerting trend has developed. The most egregious cases of discrimination have been perpetrated by government actors entrusted to serve the very communities that they have discriminated against. From Louisiana’s HUD approved discriminatory Road Home program to St. Bernard Parish’s rental ordinance essentially banning black renters and on to FEMA’s disaster resource website featuring discriminatory housing advertisements, government policies and actions have stunted recovery for scores of thousands of Gulf Coast residents.

Road Home Program

In the days and weeks after Hurricane Katrina, it became painfully obvious that the insurance industry was going to fall woefully short of its responsibility to homeowners. As a result, the Road Home program was created to assist Louisiana homeowners affected by Hurricanes Katrina or Rita in rebuilding their homes.1    Congress allocated more than $11 billion in 2 Community Development Block Grant funding to the program.   Since the program’s inception, nearly 230,000 people have applied for assistance.3    The CDBG program funding required that the Road Home Program not only refrain from discrimination, but go a step further by affirmatively furthering fair housing. Regrettably, racial disparities in the Road Home program have caused the program to fail thousands of New Orleans African-American homeowners in their efforts to rebuild their homes. Rather than a Road Home, many black homeowners have found a road leading to despair, inequity and discrimination.

The program’s failure relates to a fundamental flaw in its design: the United States Department of Housing and Urban Development (HUD) and the Louisiana Recovery Authority (LRA) created a recovery program that links housing assistance to the depressed values of black families’ pre-storm segregated housing. Under the terms of the Road Home Program, rebuilding grants are calculated based on the lower of two figures: the pre-storm market value of the home, or the cost to repair the storm damage to the home.  Homes in New Orleans’ black neighborhoods are generally worth less than homes in white neighborhoods. This is largely due to decades of racial discrimination in the Louisiana housing market that has caused and reinforced segregation in residential housing.

In fact, in 2007, my office was able to locate two homes that were essentially identical. Both homes had 4 bedrooms and 2 baths. Both homes were brick construction and flooded with six feet of water in Hurricane Katrina. The only substantial difference is that the home in the white neighborhood was worth approximately $150,000 while the home in the black neighborhood was worth approximately $90,000. The estimated repair cost for each of the homes was more than $200,000 respectively. The home in the white neighborhood received $150,000 in assistance while the assistance to the black homeowner was only $90,000. Amazingly, even though these homeowners had identical homes and identical Katrina damage, the white homeowner received a full $60,000 more than the black homeowner.

Unfortunately this fact pattern is not unique. We estimate that more than 20,000 black New Orleanians received inequitable grant payments under the flawed and discriminatory Road Home formula. Even the former Executive Director of the LRA, Paul Rainwater, agreed that African-Americans were more likely to get payouts based on depressed home values. He attested so at an August 2009 field hearing of the Subcommittee on Housing and Community Opportunity of the House Committee on Financial Services. The data supports his conclusion. An analysis of Road Home grants from 2008 shows that homeowners in the Lower Ninth Ward, a predominantly black neighborhood, faced shortfalls of over $75,000 between the available rebuilding resources and the cost of rebuilding each home. At the same time, homeowners in Lakeview—a predominantly white neighborhood—faced shortfalls of only $44,000 per home.

The bottom-line is that the Road Home program relies on a discriminatory formula that leaves black homeowners with a mere fraction of the funds needed to rebuild their homes. The program, by design, fails New Orleans black homeowners. In 2008, after attempts at negotiating a solution to the discriminatory program failed, the Greater New Orleans Fair Housing Action Center, in partnership with the National Fair Housing Alliance and five named plaintiffs, filed a class action lawsuit against the LRA and HUD over the Road Home Program.    We are represented by the Cohen, Milstein, Sellers and Toll law firm, the NAACP Legal Defense Fund and the Wilmer Hale law firm. The lawsuit alleges that the Road Home Program violates both the Fair Housing Act of 1968 and the Housing and Community Development Act of 1974 (HCDA). The Fair Housing Act requires housing programs to produce equitable results, regardless of their intent.  And both the Fair Housing Act and the HCDA require HUD and the LRA to
“affirmatively further fair housing.”    This means much more than simply refraining from active discrimination in housing programs. HUD and the Louisiana Recovery Authority cannot use federal redevelopment funds to perpetuate existing inequalities, and they must affirmatively advance fair housing principles.

As a result of the lawsuit, LRA created the Additional Compensation Grant program, which provided more funding to low income homeowners. This helped to reduce inequities in the program. However, we estimate that 10,000 homeowners remain harmed by the discriminatory Road Home formula.

I am not at liberty to discuss our pending litigation in great detail. But, it is appropriate to note that in a recent opinion, United States District Court Judge Henry Kennedy made the following comments:

[HUD and the State of Louisiana] offered no legitimate reason for taking pre-storm home values into account in calculating […] awards. The Court does not take lightly that some African-American homeowners received lower awards than they would have if their homes were in predominantly white neighborhoods. [I]t is regrettable that this effort to [rebuild the city] appears to have proceeded in a manner that disadvantaged African-American homeowners who wish to repair their homes.

Despite the court’s other reservations about the case, Judge Kennedy determined the substantial statistical and anecdotal evidence showed that Plaintiffs would likely be able to prove that HUD and LRA have designed and implemented a racially discriminatory program. The court’s ruling demonstrates that HUD’s repeated assertions that the program is not discriminatory are wrong. In spite of this, HUD and LRA have refused to remedy the problem on their own.

Confronted with HUD’s racially discriminatory actions, I respectfully request that the members of this committee intervene by contacting Secretary Donovan and urging him to come up with a remedy that eliminates discrimination in the Road Home program. Until and unless this happens, the program will remain a road to nowhere.

Discrimination by municipalities and government agencies that receive CDBG and other federal funding

Consistent with the failures of the Road Home program, other government bodies have engaged in discrimination post-Katrina, in spite of their obligation to not merely refrain from discrimination, but to affirmatively further fair housing.

FEMA Allows Discriminatory Advertisements on Housing Website it Controls

In the Fall of 2005, the Greater New Orleans Fair Housing Action Center uncovered nearly 1,000 discriminatory internet advertisements on several websites established to assist Katrina evacuees. The most egregious advertisements were listed on Katrinahousing.org. The site featured ads with comments like, “not racist, but whites only,” “prefers 2 white females,” “prefer white Catholic family, children welcome,” and “not to sound racist but because we want to make things more understandable for our younger child we would like to house white children.”

One of the sites featuring discriminatory advertisements was Dhronline.com. The site was established by FEMA in partnership with the University of Florida to provide housing assistance to evacuees. When notified about the advertisements, FEMA refused to remove them from the site and argued that it was immune from the Fair Housing Act. In fact, FEMA was likely in full violation of the Act.

Denham Springs Eviction of Residents with Mental Disabilities In December of 2005, after public meetings where residents made negative racial
comments and comments about people with disabilities, The City of Denham Springs, sought to evict New Orleans evacuees with mental illnesses from a group home established to serve the evacuees.10    Relying on the federal Fair Housing Act and the Americans with Disabilities Act, the Greater New Orleans Fair Housing Action Center filed suit on behalf of the Options Foundation, Inc.    As a result of the lawsuit, Denham Springs was enjoined from evicting the evacuees.  Denham Springs’ action not only violated the federal Fair Housing Act, but also demonstrated a failure to affirmatively further fair housing.

St. Bernard Parish Blood Relative Ordinance

In the Fall of 2006, St. Bernard Parish passed an ordinance making it illegal to rent single-family homes to people not related to the owner.  93% of homeowners in St. Bernard are white.  As a result, few if any minorities were able to rent housing in St. Bernard. The Greater New Orleans Fair Housing Action Center sued the St. Bernard Parish Council to force them to overturn the ordinance.14    The litigation resulted in the successful reversal of the ordinance. The ordinance was illegal discrimination under the federal Fair Housing Act and certainly failed to affirmatively further fair housing.

Housing Authority of New Orleans Denies Residents

Since 2002, the Housing Authority of New Orleans (HANO) has been operating under HUD receivership. As a result, HUD manages and controls the Housing Authority. In 2006, the Greater New Orleans Fair Housing Action Center filed a complaint against HANO after learning that the few available public housing units in the City located at the redeveloped St. Thomas housing development were actually occupied by the housing authority’s employees, rather than returning mostly African-American St. Thomas residents.  This was despite a conciliation agreement between the HUD, HANO, and former St. Thomas residents requiring that a preference be given to former residents of the development. In that case, HANO, essentially synonymous with HUD, was found liable for housing discrimination and forced to allow the residents to occupy St. Thomas.

St. Bernard Parish Multi-Family Housing Ban

In 2008, St. Bernard Parish, after public meetings where officials and the citizenry vocalised racialized fears about affordable rental housing, passed an ordinance banning the construction of affordable rental housing in the Parish. After failed negotiation attempts, the Greater New Orleans Fair Housing Action Center and Provident Housing (a reputable housing developer) filed suit against the Parish alleging a violation of the federal Fair Housing Act and a violation of the terms of a prior consent decree from the 2006 blood relative ordinance. The Parish fought the suit vigorously and was held in contempt of court four separate times. The Greater New Orleans Fair Housing Action Center was victorious and the Parish was forced to overturn the ordinance and grant a permit to Provident Housing to begin construction of an affordable housing development in the Parish’s borders.
Jefferson Parish discriminatory zoning efforts Jefferson Parish likely engaged in discriminatory zoning efforts when it made it impossible for the Volunteers of America to build a Low Income Housing Tax Credit financed apartment complex to replace an elderly living complex destroyed by Katrina. The would-be occupants of the new complex were low-income elderly New Orleanians, most of whom were African-American. After public meetings where residents and elected officials raised racialized concerns about the development’s future residents, the Parish passed a resolution expressly requesting that no LIHTC developments be constructed on the Westbank of Jefferson Parish, the proposed Volunteers of America site location. The Parish subsequently engaged in a land-use study at the site of the proposed development, perfectly timed to kill the project. The project is now dead and the low-income elderly, mostly African-American residents, for whom the project was intended, have been left without an affordable housing option. During the same period, the Parish approved and championed a high-end, market rate, multi-family complex for elderly citizens. The actions taken by the Parish certainly demonstrate a failure to affirmatively further fair housing. In fact, they likely constitute illegal discrimination under the federal Fair Housing Act.

Kenner City Multi-family Housing Moratorium

In 2008, Kenner City, located in Jefferson Parish, passed a moratorium on the construction of any multi-family housing in the City.  The ordinance prevented any LIHTC construction in the City. Conversation regarding the ordinance came up after residents raised concerns about a storm damaged apartment complex that housed mostly Latinos and families with children. The moratorium on multi-family housing was likely illegal discrimination under the federal Fair Housing Act.

Eastern New Orleans Proposed Multi-family Housing Moratorium

In 2007, New Orleans’ District E City Council member sought to prohibit the construction or renovation of any multi-family housing with two or more units in her district.18 The District housed a large portion of the City’s affordable rental housing. African-Americans, people with disabilities and families with children comprised a large portion of the people who relied on apartment housing in New Orleans East. After aggressive advocacy by numerous local organizations, the proposed ban was withdrawn prior to being voted on by the Orleans City Council. The proposal, however, demonstrates discriminatory intent by the Council member.

Louisiana Building Code

The State of Louisiana, post-Hurricane Katrina, adopted a new building code but removed all provisions that would have forced developers to build multi-family units in a manner that was accessible for people with physical disabilities. Under the federal Fair Housing Act, all rental housing with four or more units built after March of 1991 must be physically accessible to people with disabilities. Many developers assume that by complying with state and local building codes, they have satisfied the Fair Housing Act requirements. Regretfully, the gutting of safe harbors from Louisiana’s building codes led numerous developers to build inaccessible multi- family housing that violates the Fair Housing Act. A 2009 study by the Greater New Orleans Fair Housing Action Center found that every one of the 22 complexes investigated failed to meet the accessibility standards of the Fair Housing Act.  While the State’s liability is unclear, it is clear that removing fair housing provisions form the State building code is a failure to affirmatively further fair housing.

Conclusion

These examples are a mere sampling of post-Hurricane discrimination by government entities that benefit from CDBG funding. When considered with the previously demonstrated racially discriminatory formula used by the State of Louisiana to determine Road Home homeownership grant amounts, it is clear that CDBG funding is not being used in a manner that affirmatively furthers fair housing. In fact, many entities have been found liable for violating federal fair housing laws.

This is exacerbated by the fact that the state of Louisiana and nearly all municipalities have failed to engage in any fair housing related activities. None of the entities have supported any fair housing related activities, trainings, workshops, events, enforcement or fair housing organizations.
In 30 days, Americans will refocus their attention on America’s Gulf Coast by commemorating the fifth anniversary of Hurricane Katrina. What will become painfully clear is that the rebuilding in New Orleans and surrounding Gulf Coast communities remains incomplete. And consistently the failures in rebuilding coalesce around families with children, low-income residents, people with disabilities and people of color. Each of these groups has been systematically failed by government policies and rebuilding programs beset with racial disparities and discriminatory framework.

As Congress considers the future of fair housing in America, I urge members to look at the discriminatory housing failures of local, state and federal government and promulgate legislation that adds new protections to the federal Fair Housing Act and provides real penalties for government bodies that receive federal funding but fail to affirmatively further fair housing.

Recommendations

  • Congress should require HUD to recalculate Road Home grants so that funding is distributed in a non-discriminatory manner.
  • Congress should require communities that receive federal funding to have building codes that are fair housing safe harbors.
  • Congress should limit CDBG funding for communities that resist reasonable efforts to create affordable housing.
  • Congress should provide $50 million of funding to the Fair Housing Initiatives Program at HUD.
  • Congress should approve the Housing Fairness Act.
  • Congress should better regulate HUD’s management of local housing authorities.
  • Congress should immediately strengthen the affirmatively further fair housing regulations and laws so that municipalities can be penalized for failing to affirmatively further fair housing.
  • Congress should immediately strengthen CDBG requirements so that municipalities found liable for illegal housing discrimination will be forced to forfeit CDBG and other federal funding.
  • Congress should strengthen HUD’s ability to enforce fair housing related CDBG regulations.
  • Congress should require HUD to strengthen its enforcement of CDBG related fair housing laws.
  • Congress should require HUD to strengthen its enforcement of fair housing laws against government agencies.
  • Congress should require municipalities to engage in activities that further fair housing.
  • Congress should require CDBG grantees to fund private fair housing enforcement non-profits.
  • Congress should require all staff of all municipalities that will manage CDBG funding to participate in fair housing law trainings.

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James Perry to the US House of Representatives Financial Services Subcommittee

Posted on 08. May, 2008 by in Enforcement Media & Pubs, Homeownership Protection Media & Pubs, Staff Testimony

Testimony of James Perry, Executive Director, Greater New Orleans Fair Housing Action Center and President of the Louisiana Housing Alliance to the United States House of Representatives’ Financial Services Subcommittee on Housing and Community Opportunity on May 8, 2008

Congresswoman Waters, Ranking Member Capito, and members of the Committee, thank you for the opportunity to testify today on the use of CDBG funds in Gulf Coast communities.

I am James Perry, Executive Director of the Greater New Orleans Fair Housing Action Center, a private non-profit that works to eradicate housing discrimination in New Orleans. We are the only full service fair housing organization in the state of Louisiana. I also serve as President of the Louisiana Housing Alliance, a statewide coalition of housing advocates, non-profit housing providers, homeless service providers, advocacy organizations and local housing coalitions. We work to insure adequate affordable and low-income housing opportunities in Louisiana.

There are several goals and mandates within the Community Development Block Grant program. Most importantly, CDBG is supposed to provide housing opportunities for low-income Americans, cause development in poor communities and affirmatively further fair housing. I regret to inform you, however, that CDBG allocations have not been successful on these fronts.

CDBG Allocation Process

Lack of oversight – Members of Congress will recall that when CDBG funding was initially allocated to Gulf Coast communities, some of the stringent program requirements were reduced or stripped from the allocation. The goal was to make the program expansive since a large cross-section of citizens suffered in the 2005 storms. In particular, the obligation that 70% of funds go to assist low-income residents was significantly weakened.    Only 50% of funds were required to be used in a fashion that would assist low-income families. The result is that the majority of CDBG funding has been used to assist middle and upper income families, rather than low-income citizens.

For example, post-hurricane, Louisiana created the Road Home program. The program was designed to help both homeowners and renters. However, 86.2% of CDBG funding allocated by the state has gone exclusively to homeownership programs, which help citizens regardless of income. Only 13.1% went to affordable rental housing. This defies CDBG program goals since the majority of New Orleanians and particularly, low-income
New Orleanians and Louisianans were renters. Any attempt to assist low-income citizens must focus a major portion of its efforts on affordable rental. This scant allocation of funds makes it inherently difficult for CDBG dollars to benefit low-income citizens. In fact the situation remains that the Road Home Small Rental program, has to date provided only 13 units, when the state of Louisiana estimates a need for as many as 80,000 units.
The effect of the short falling is demonstrated in reports by Unity for the Homeless, a New Orleans non-profit. The organization estimates that prior to Hurricane Katrina there were approximately 6000 homeless residents. There are now more than 12,000 homeless citizens in New Orleans. If the Road Home Small Rental program were properly funded and managed, the number of homeless citizens would be significantly less. Better oversight of the use of CDBG funding could have prevented this failure.

The problem is exacerbated by the liberal nature of CDBG funding. The United States Department of Housing and Urban Development (HUD), charged with monitoring and managing CDBG, has little oversight and/or authority over CDBG grantees. In each case that post-storm CDBG grantees presented plans that didn’t achieve CDBG goals or asked for waivers from the CDBG low-income requirement, HUD has simply granted the waivers regardless of whether the plan affirmatively furthered fair housing or provided adequate housing assistance to low-income citizens.
The matter was clearly exemplified in Mississippi recently. Consider the unfortunate decision by Mississippi to allocate $600 million of its CDBG funding to a port development program that would offer little or no assistance to low-income citizens. Secretary Jackson of HUD stated in casual conversation that he believed the allocation to be a poor use of CDBG funding. He indicated that if he had the authority to reverse the decision, he would have done so.

The matter was again exemplified in Alabama. The millions of dollars allocated to the state to assist Hurricane affected evacuees have yet to be expended nearly three years after Hurricanes Katrina and Rita. Better oversight would force local and state officials to allocate CDBG funding in a timely manner.

Recommendations
• The problem of CDBG allocations being used for purposes other than assisting low- income residents is a national problem. Communities look for ways to use the funding that don’t necessarily help the poorest citizens or affirmatively further fair housing. In fact, studies indicate that most CDBG assistance inures to the benefit of moderate and middle-income citizens. Congress should refrain from removing the 70% low-income requirement on CDBG funding. In addition to the overall 70% low-income cap, 40% of CDBG funds should be required to be used exclusively to benefit citizens at or below 50% of median income. These rules should remain consistent both in normal operations and in times of disaster.
• Congress should increase HUD’s oversight of CDBG funding and make it easier for HUD to revoke or limit funding when CDBG grantees fail to assist low-income citizens, remove blight in poor communities, or affirmatively further fair housing.
• Hurricane affected states have not been forthcoming in releasing reports on CDBG allocations or HUD’s grading of their use of the allocations. Congress should strengthen reporting requirements so that all CDBG reports must be provided on the Internet and at the immediate request of citizens as soon as they are available.
• Congress should immediately account for the short fall that left many renter families without shelter by immediately allocating money for and approving 3000 permanent supportive housing vouchers. The Senate Appropriations Committee will vote on such funds today, as part of its supplemental budget package. The House should also include funding for these vouchers in its supplemental budget bill.

Fair Allocation of CDBG Dollars

After Hurricanes Katrina and Rita, the 109th Congress capped Louisiana’s share of CDBG funding at 54% of the allocation despite the fact that Louisiana suffered nearly 80% of all the housing damage. Louisiana had more than four times the damage suffered in Mississippi, yet Louisiana received less than twice the amount of funding received by Mississippi. We support the recovery of our neighbors in Mississippi, but the disparity in allocation left needs in Louisiana significantly unmet.
If Louisiana had received the more than $20 billion that is proportional to the amount Mississippi received, the status of recovery might have been very different. More affordable rental units would be funded and more low-income citizens might have been helped. However, with scant federal resources available, the state was required to pick and choose who received help. In such circumstances, low-income citizens and citizens with special needs are rarely successful. Such has been the case in Louisiana. In addition, Louisiana has been placed in the undesirable position of having to consistently beg the Federal government for additional resources.

Recommendation
• It is important that in the future, funding must be allocated exclusively according to proportional need. In addition, Congress should reconsider whether current funding in Louisiana and Alabama has met the need. If not, Congress should allocate additional CDBG assistance.

Road Home Housing Program

Failure to Affirmatively Further Fair Housing/Discriminatory Practices – Another area that demonstrates the need for better federal oversight of CDBG fund usage is the Louisiana Road Home Homeownership Program. The program fails from a fair housing standpoint because it has a disparate discriminatory impact on African-Americans and other historically segregated communities of color. The program uses pre-storm home values to calculate renovation grant amounts. In communities of color that have historically low property values due to historic patterns of segregation, residents are paid lower grant amounts then their counterparts in majority white communities where comparable properties have higher values. Road Home grant payouts should be based exclusively on home replacement/repair costs rather than property value. This process would be less discriminatory and better enable citizens to rebuild.

The State of Louisiana, ICF International (the Road Home contractor) and the Louisiana Recovery Authority (LRA) have all been made aware of the discriminatory impact of the program, yet the problem persists. Some advocates have suggested that an aspect of Louisiana’s decision to ignore the problem may stem from the lack of a clear enforcement mechanism in the CDBG “affirmatively further fair housing,” clause.

Some Grantees have treated the language as dicta rather than a legal requirement. Advocates may be forced to pursue litigation to correct the problem.

Recommendations
• Congress should use any authority available to force the Road Home Homeownership Program to adopt a less discriminatory process for awarding grants.
• Congress should provide more tools and language to enforce the “affirmatively further fair housing,” provisions of CDBG laws and regulations.
• Congress should hold hearings on the discriminatory effect of the Road Home Homeownership Program

Poor Use of Funds – The Road Home program has increased performance since the fourth quarter of 2007. It has awarded more grants at a more frequent rate. However, significant problems in the Road Home program persist. The problems are too numerous to enumerate in this testimony. However, I will provide some exemplary issues.

LRA has unnecessarily shifted CDBG funds intended for Road Home homeowner grants to a home elevation program that most homeowners will not and have not been able to take advantage of because it does not provide enough money to actually raise an average house in Louisiana.
The Road Home program lacks a fair and efficient appeals program. Advocates assisting Road Home grant recipients with appeals have found that the appeals process is nearly impossible to navigate because: Road Home officials are slow to release internal information related to clients’ grant calculations; the appeals process and procedure is not clearly enumerated or publicized; conflicting Road Home policies thwart the appeals process; processing delays slow the appeals process; the appeals process is not firmly related to basic legal and administrative principles for deciding appeals; and appeals are not decided by a disinterested independent party.

The Additional Compensation Grant portion of the Road Home, which is meant to help low and moderate income homeowners rebuild, does not provide enough money to eligible applicants to make up for the gap between their homes’ pre-storm value and actual repair/replacement costs. The result is that a large numbers of low-income citizens have received only part of the money necessary to rebuild. The national credit crunch combined with the fact that credit ratings of Gulf Coast citizens suffered during the months after the Hurricanes have made it difficult for low-income citizens to use the private lending market to fill the gap left open by the Road Home program’s inefficiency. The result is that numerous citizens are left with partially renovated homes and no financial means to complete the renovations.

Finally, the Road Home and individual parishes have vague plans on how they intend to dispose of storm-damaged properties acquired by the Road Home program. The lack of clarity on the future of these properties limits citizens’ ability to make informed decisions about their communities.
In spite of these failures, the State of Louisiana increased payments to ICF International (the contractor that manages the Road Home program) despite documented evidence of massive contractor error.

Recommendations
• Again, Congress should increase federal oversight of CDBG funding to insure efficiency.
• In the planning process, CDBG grantees should be required to provide exhaustive details of how CDBG funding will be spent. Louisiana’s plan for the expenditure of more than $12 billion dollars of CDBG money was less than 20 pages long. The result is that few people, including state officials, have a clear understanding of how program dollars are being spent.

Road Home Rental Program

The Road Home Small Landlord program has failed to have any relevant effect on Louisiana’s recovery. The program is simply not replacing lost rental housing stock. To date, the state has received applications to restore 12,800 units but a mere 13 units have been restored in the more than 2 1⁄2 years since Hurricane Katrina.

The program requires that property owners get private financing and fully complete repairs prior to receiving funding. Of course, if landlords were able to get private funding, they would have no need for the program’s assistance. The requirement that renovation be complete before any funding is allocated has caused the complete failure of the program. The LRA, not understanding the cause of the failure, has sought to redirect program funding to other areas. The problem is extremely important since LRA estimates that the state needs an additional 60,000 to 80,000 rental units to complete its recovery.    The failure of this program exacerbates the affordable rental housing problems in Louisiana and prevents thousands of renters from returning to their communities. LRA must revamp this program to make it more lucrative and provide some upfront funding to landlords.

Recommendations
• Again, Congress should increase federal oversight of CDBG funding to insure efficiency.

Discrimination by Municipalities that Receive CDBG funding

Many of the rental units scheduled to be redeveloped are using the Low-Income Housing Tax Credit (LIHTC) and CDBG funding. The process of rebuilding affordable rental housing has been extremely difficult, because Louisiana municipalities have sought to limit the construction of affordable housing. Anti-affordable housing efforts, often termed “not in my backyard” (NIMBY) have slowed and in some instances stopped the development process.

One example occurred in Jefferson Parish where the Parish engaged in discriminatory zoning efforts that made it impossible for the Volunteers of America to build an apartment complex to replace a complex lost in the storm. The would-be occupants of the new complex were low-income elderly New Orleanians, most of whom are African- American. The Parish passed a resolution expressly requesting that no LIHTC developments be constructed on the westbank of Jefferson Parish. It later engaged in a land-use study at the site of the proposed development, timed to kill the project. The project is now dead and the low-income elderly, mostly African-American residents, for whom the project was intended, have been left without an affordable housing option. During the same period, the Parish approved and championed a high-end, market rate, multi-family complex for elderly citizens. The actions taken by the Parish certainly demonstrate a failure to affirmatively further fair housing. In fact, they likely constitute illegal discrimination under the federal Fair Housing Act.

Kenner City, located in Jefferson Parish, recently passed a moratorium on the construction of any multi-family housing in the City. The ordinance, which we are aggressively advocating against, prevents any LIHTC construction in the City. The talk of the ordinance came up after residents raised concerns about a storm damaged apartment complex that housed mostly Latinos and families with children. The moratorium on multi-family housing is likely illegal discrimination under the federal Fair Housing Act.

In similar fashion, a city council person for New Orleans East sought to prohibit the construction or renovation of any multi-family housing with two or more units in her district. The district housed a large portion of the City’s affordable rental housing. African-Americans, people with disabilities and families with children comprise a large portion of the number of people who rely on the apartment housing in New Orleans East. The proposed ban was withdrawn prior to being voted on by the Orleans City Council. It however demonstrates discriminatory intent by the Council member.
In the Fall of 2007, St. Bernard Parish passed an ordinance making it illegal to rent single-family homes to people not related by blood to the owner. 93% of homeowners in St. Bernard are white. As a result, few if any minorities would be able to rent housing in St. Bernard. My organization, the Greater New Orleans Fair Housing Action Center, sued the St. Bernard Parish Council to force them to overturn the ordinance. The litigation resulted in the successful reversal of the ordinance. The ordinance was illegal discrimination under the federal Fair Housing Act and certainly failed to affirmatively further fair housing.

The State of Louisiana, post-Hurricane adopted a new building code but removed all the provisions that would have forced developers to build multi-family units in a manner that was accessible for people with physical disabilities. This is a failure to affirmatively further fair housing.
These examples are a mere sampling of post-Hurricane discrimination by municipalities that benefit from CDBG funding. When considered with the previously demonstrated racially discriminatory formula used by the state of Louisiana to determine Road Home homeownership grant amounts, it is clear that CDBG funding is not being used in a manner that affirmatively furthers fair housing. In fact, each entity is likely liable for violating federal fair housing laws.

This is exacerbated by the fact that the state of Louisiana, and nearly all municipalities (except Baton Rouge) have failed to engage in any fair housing related activities. None of the entities have supported any fair housing related activities, trainings, workshops, events, enforcement or fair housing organizations. The sole voice of the fair housing movement in Louisiana has been the six-person staff of the Greater New Orleans Fair Housing Action Center through its enforcement work and outreach efforts with partners such as the Urban Restoration Enhancement Corporation, the Louisiana Disaster Recovery Foundation, HUD, and an upcoming anti-NIMBY campaign with the Louisiana Housing Finance Agency.
It is important to note that the case is similar in Texas, Mississippi and Alabama. None of these states have engaged in any activities that affirmatively further fair housing. In Mississippi, one municipality has bucked the trend by providing funding to the Mississippi Gulf Coast Fair Housing Center.

Recommendations
• Congress should immediately strengthen the affirmatively further fair housing language in the CDBG regulations and laws so that municipalities can be fined and otherwise penalized for failing to affirmatively further fair housing.
•    Congress should immediately strengthen CDBG requirements so that municipalities found liable to for illegal housing discrimination will be forced to forfeit CDBG funding.
• Congress should strengthen HUD’s ability to enforce fair housing related CDBG regulations.
• Congress should require HUD to strengthen its enforcement of CDBG related fair housing laws.
• Congress should require municipalities to engage in specific activities that further fair housing.
• Congress should require CDBG grantees to fund private fair housing enforcement non- profits.
• Congress should require all staff of all municipalities that will manage CDBG funding to participate in fair housing law trainings.
• Members of Congress should conduct hearings to investigate the extent of illegal discrimination by CDBG grantees along the Gulf Coast.
Additional Recommendations
• Passage of an Affordable Housing Fund to support the production and preservation of rental housing affordable to extremely low income families and direct the resources to states where the housing supply has been affected by the Gulf Coast hurricanes for the first year.
• An additional allocation of GO Zone tax credits of $30 million annually for a period of five years to fund projects in the GO Zone;
• An increase in the State’s annual allocation of Per Capita Tax Credits from $8.6 million annually to $18 million annually for a period of five years to fund projects in rural and metropolitan areas of the state affected by GO Zone out-migration;
• An allocation of $500 million of GO Zone Mortgage Revenue Bonds to promote
ownership and rental housing in the GO Zone;
• Authority to use Single-Family Mortgage Revenue Bonds to refinance mortgage loans that are at risk of foreclosure;
• An increase from $15 million annually to $30 million annually for five years in its annual allotment of HOME funds to fund homeownership and affordable rental opportunities in GO Zone and non-GO Zone areas for persons earning less than 80% of AMI. 50% of the allocation would be reserved for citizens earning less than 30% of median income.
• $30 million in annual allotments of CDBG funds for five years to fund homeownership and affordable rental opportunities for persons in GO Zone and non-GO Zone areas earning from 0% to 100% of AMI. 33% of the allocation would be reserved for citizens earning less than 30% of median income.
• Additional federal funds for Regional Planning, and Community Development Training.

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Seth Weingart to Louisiana Senate Committee on Local & Municipal Affairs

Posted on 08. May, 2008 by in Homeownership Protection Media & Pubs, Staff Testimony

Testimony by Seth Weingart, Homeownership Counseling Supervisor, to the Louisiana Senate Committee on Local and Municipal Affairs Re: SB 740, Road Home Program Applicants’ Bill of Rights on May 8, 2008

My name is Seth Weingart and I am the Homeownership Specialist at the Greater New Orleans Fair Housing Action Center. The Fair Housing Action Center is a non-profit organization dedicated to eradicating housing discrimination in the New Orleans metro area and ensuring fair treatment for all residents to pursue appropriate housing. Since 2006, we have expanded our work to provide counseling to homeowners affected by Hurricanes Katrina and Rita. I would like to thank Chairwoman Gray and the members of the Committee for the opportunity to speak today in support of Senate Bill 740, the Road Home Applicants’ Bill of Rights.

In my position, I provide counseling to homeowners with all of their hurricane recovery needs ranging from mortgage and insurance problems to contractors and the Road Home. GNOFHAC began this project in April 2006, and in that time we have assisted over 300 homeowners with their hurricane recovery needs, and a large proportion of our current clients are coming to us because of problems with the Road Home. Applicants’ problems vary, and are generally a combination of not receiving enough money to rebuild or sell their property, lack of understanding and information, and confusion about grant calculations, inability to move through the process to closing and through appeals, lack of understanding of the resolution and appeals process, and non-responsiveness, unfair treatment and inappropriate behavior from Road Home personnel.

We believe this Road Home Bill of Rights will do a great deal to alleviate many of the problems applicants are facing and applaud the committee for taking up this issue. This bill will create openness in a process that has made it almost impossible for applicants to get any information about their grants, who have had to make decisions based on incorrect information, and who have had to fight to get every dollar they deserve. By allowing applicants access to their files, especially the appraisals and damage estimates used by the Road Home to calculate grants, homeowners will finally be able to have the information they need to appeal unfair grant determinations. By extending the appeal deadline, all of those homeowners who were lost in the resolution process or who didn’t know they had the right to appeal or even what they should be appealing will have the ability to receive fair treatment and a grant that will get them that much closer to getting back in their homes. By creating an inspector general, the applicants will have someone to advocate for them from within, someone who will see all the inaccuracies and miscalculations, and who will be able to fix these problems. And an independent audit will show how funds have been misspent and how this situation can be fixed to ensure all applicant have the ability to receive fair grants in order to rebuild.

Most importantly, I would also like to speak to the section of the bill regarding the Additional Compensation Grant. We fully support the section of the proposed legislation that would increase the ACG cap to $75,000 and increase the eligibility for those families who earn up to 120 % of AMI, and recommend that these policies be implemented immediately and retroactively to all applicants still in the process and to those who have already received their grants. In light of the recent reports that the program will have far fewer applicants than projected, there should be money available to help homeowners still facing a large gap in funds needed to rebuild, and especially these homeowners who are the most in need.

As I mentioned before this Committee on a previous occasion at a meeting in New Orleans, the reason so many applicants are facing a shortfall in rebuilding funds is because of the use of pre-storm value in the grant calculations. In communities with low home values, grants are being based on the pre-storm value, even with damage estimates sometimes double and triple the value of the home. Since the home’s value has no relation to the actual cost of rebuilding, this is leaving many families short of needed money to get back in their homes, especially for those who make too much money to be eligible for ACG. The LHFA Louisiana and New Orleans Metro Housing Needs Assessment Executive Summary released on February 15, 2008 states:

The grant equation addresses the pre-storm value of homes. The compensation grant is equivalent to the estimated cost of damage minus other assistance (insurance, FEMA, etc.) or the pre-storm value of the home minus other assistance. For areas with lower property values that were severely damaged, the cost of repair exceeds the pre-storm value. With construction costs estimated at $120 per square foot, many homeowners will likely be tens of thousands of dollars short of fully funding repair.

Even with the Additional Compensation Grant (ACG) of up to $50,000 for low and moderate income homeowners, there may not be enough funding to replace a home. This is particularly burdensome for middle income families who do not qualify for the ACG but reside in a neighborhood where housing values were low before the storm. There are many instances of this in neighborhoods such as the Lower 9th Ward or in parts of St. Bernard Parish where homes were completely destroyed and the pre-storm value is less than replacement cost.

This also brings me to another point regarding the need for an independent audit of all Road Home files, and specifically the appraisals used to determine pre-storm value. Home appraising is a highly subjective, inconsistent, and somewhat arbitrary process that depending on the quality of the appraiser and the comparable properties used can lead to very different results. Having reviewed many Road Home appraisals myself, it is terribly unfair that these appraisals are being used at all. Any audit that is completed will have to review all the appraisals used in determining pre-storm values for grants and should recalculate grants using better data than what has been used up to this point.

Many appraisals use comparables in completely different neighborhoods, totally different size houses, and with no comparison of the amenities in the house that would make it more or less valuable. In addition to these very serious issues, because the Road Home has changed its pre-storm value policy so many times, many applicants have actually received grants on low pre-storm values when higher legitimate values are available, but because the policy was changed after they received their grant, it is too late for them to appeal.

For example, one applicant we are assisting received an award letter with a pre-storm value of $250,000 based on a BPO, but when she went to closing, the grant was actually based on a pre-storm value of $137,000 from a Market Analysis subsequently conducted. Her grant was cut in more than half, from $138,686 to $64,172 and she was given no explanation for the reduction. She appealed immediately and it has been over a year but there has still been no determination on her appeal, and the file was placed in inactive status until only a week ago. The house had almost $400,000 worth of damage and the ridiculously low grant she received is not nearly enough for the repairs. Because the house was purchased many years ago and there was no recent appraisal, there was no way to dispute it. However, after receiving a copy of the Road Home file, we found that the appraisal used was vastly underestimating the value of the home, using comparable properties that were much smaller. This gave the applicant evidence for her appeal, but what about the thousands of applicants who did not have access to this information? Should they be punished for not knowing how the Road Home was undervaluing their homes and shrinking their grants? For this reason, we believe that if the Road Home continues to use pre-storm value in calculating grants, then it should always use the highest available value, and that all files should be independently audited to determine if the appraisal was fair.

Katrina was a difficult time for all of us, and we owe the people of Louisiana who have had to suffer so much, more than what they are getting with our money. We deserve to be treated fairly, we deserve openness and accountability, and we deserve to be able to rebuild our homes with the money the federal government provided for us. We have an obligation to fix this now before it is too late. I urge you to pass this bill and truly help the people of Louisiana come home.

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Seth Weingart Statement on the Road Home

Posted on 16. Feb, 2007 by in Homeownership Protection Media & Pubs, Staff Testimony

Statement by Seth Weingart, Homeownership Counseling Supervisor, on The Road Home program on February 16, 2007:

Louisiana’s Road Home program is using billions in federal CDBG funds to compensate homeowners for uninsured losses due to Hurricane Katrina. As of last week, only 632 of over 107,000 applicants had gone to closing on the rebuilding grants. Thousands of Louisiana homeowners, many of them of low and moderate income, and African- American, are still waiting for assistance so they can rebuild their homes. And those who have been notified of the awards they are to receive are being victimized by systematic discrimination as a result of real estate industry policies that consistently undervalue homes in African-American neighborhoods. Dating back to the Home Owners Loan Corporation and up to the Federal Housing Administration of today, homes in minority neighborhoods are valued lower than those in predominantly white neighborhoods. Why is this important? Because the Road Home uses industry standard pre-Katrina property appraisals to determine grant awards. The Greater New Orleans Fair Housing Action Center has been providing assistance to homeowners affected by the hurricane, and we have assisted many in trying to understand Road Home policies. What is hard to fathom is why the Road Home is using these discriminatory appraisals as the basis for their decisions. In one particularly egregious case we are working on, a single African- American female homeowner in the Lower 9th Ward was told by the Road Home that even though her home sustained $190,576.80 worth of damage, because they valued her house at only $74,399, she was eligible for no money to rebuild. She is being punished for maintaining adequate flood insurance that does not provide enough compensation to rebuild. Her home was newly renovated before Katrina, but for her it had the unfortunate luck of being in a neighborhood shunned by the real estate industry. Now she continues to face hurdles as FEMA has refused to give her a trailer to live in and she doesn’t have the money to fix her house.

Contrast this with a white homeowner in a predominantly white neighborhood. If his home was valued at $250,000 before the storm, sustained over $300,000 worth of damage, and received $100,000 from insurance for moderate flooding. According to Road Home policies he would still be eligible for the maximum grant of $150,000. This is terribly unfair and is contributing to the unceasingly slow pace of the recovery in New Orleans.

People who need help the most are going to be the ones who get the least. We need the Road Home to reverse these policies and base compensation on the amount of damage and the cost to repair, not an appraisal that has been tainted by a history of racial discrimination.

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