La. Recovery Authority Sheds Income Limits in Housing Plan

Lawmakers in Louisiana next week are expected to vote on Gov. Kathleen Blanco’s $7.5 billion housing plans, after several provisions were altered to make the post-hurricane rebuilding and buyout program more appealing to the Legislature.

The Louisiana Recovery Authority voted recently to tweak the program, then Blanco and leaders of disparate legislative groups that had complained about pieces of it held a joint press conference to praise the revised version – seeming to ensure easier legislative passage.

“I think it will be smooth sailing,” Blanco said.

Lawmakers must approve the housing plans before Louisiana can seek federal approval and begin doling out the dollars to eligible homeowners who had major damage from hurricanes Katrina and Rita. Senate President Don Hines and House Speaker Joe Salter said they expected the Legislature to vote on the assistance plans early next week.

Blanco’s housing plans would spend federal recovery money for repairs, rebuilding and buyouts for homeowners in grants of up to $150,000 per homeowner. Those who were in a flood plain and didn’t have flood insurance would be eligible for up to $105,000. Homeowners who don’t want to rebuild in Louisiana would get buyouts up to 60 percent of their homes’ pre-storm value.

Among the most significant change made by the LRA involved getting rid of income limits that had generated heavy criticism from lawmakers, who said those limits would be unfair.

The LRA did away with a provision that would have limited assistance to low-income homeowners or those who lived outside the flood plain if the state doesn’t receive extra hurricane aid under discussion by Congress. Instead, the amount of maximum assistance would be lowered to half what homeowners would be able to receive under a fully funded program.

So, if a homeowner would have been eligible to receive $90,000 under the fully funded program, he would receive $45,000 under a partially funded version.

But Blanco said if Congress doesn’t approve another $4.2 billion in recovery aid, the current housing assistance plans would be scrapped and state officials would “have to go back to the drawing table.” The governor and the LRA expect Congress to approve the dollars next month.

The recovery authority also made changes that would let the LRA grant exceptions to requirements that homeowners follow FEMA flood elevations to be eligible for aid – exceptions that are of interest in parishes where officials don’t believe the FEMA standards are scientifically sound.

As many as 123,000 homeowners are estimated to be eligible for the housing assistance. More than 60,000 people have pre-registered for the aid. Checks aren’t expected to go out to homeowners until at least late summer. The program still needs approval from the Legislature and the U.S. Department of Housing and Urban Development.

The first draft of the housing program sparked much criticism across the political spectrum. With the revisions, Hines, Salter, the heads of the Legislature’s black caucus and Republican caucus, and other lawmakers stood with Blanco to applaud the housing program.

The governor, key legislators and LRA members brokered the compromise at a Tuesday night meeting, according to Walter Leger, chairman of the LRA’s housing task force.

“We’ve come up with what I submit to you is a consensus proposal,” Leger told the recovery authority board, which unanimously agreed to the changes.

Other adjustments include:

-Adding language that says the state is committed to using any money generated by selling property bought out under the program back into housing, infrastructure and economic development. But the housing plans don’t say which state or local agency will determine whether to redevelop the bought out property or turn it into park land.

-Providing an appeals process for homeowners who disagree with the determination of their homes’ pre-storm value, which is used to determine the grants they can receive. The LRA, the governor’s Office of Community Development and the contractor hired to administer the housing program will choose the method for determining pre-storm home values.

-Explaining that HUD requires that homeowners’ insurance benefits be deducted from any assistance the homeowners can receive, addressing a complaint from legislators that the insurance benefits shouldn’t be included in determining the grants.

The LRA also made adjustments to Blanco’s $1.5 billion program for rehabilitating apartments and other rental housing, which will be included with the homeowner assistance program in the plans that will be voted on by the Legislature.

Blanco’s housing assistance program is online at www.LouisianaRebuilds.info.