Road Home, or Road to Nowhere?
It occurs to me that I’ve blasted the Road Home program in passing several times, but have never dedicated a full post to it. Road Home is the official, federally-funded ($7.5 billion), state-administered program for helping Louisiana homeowners get back on their feet. When you talk about federal homeowner assistance, this is THE program – and it might be the worst example of domestic federal incompetence in our history. Road Home has barely helped any homeowners since fully kicking off in October (the pilot program began even earlier), and the ones it has helped haven’t gotten nearly the assistance they need.
Any homeowner whose house suffered heavy damage – there are about 120,000 of them – and is willing to stay in New Orleans is eligible for a rebuilding grant of up to $150,000 (or the extent of the damage, whichever is lower). However, any money received from FEMA or insurance is deducted from the grant, and if the homeowner did not have insurance, they are penalized a further 30 percent. If the homeowner moved out of state after Katrina, 40% is taken off the home’s value – even if they moved before the Road Home program was created. This quirk reduced at least one grant from $32,494.16 to a paltry $6,156.94. In the end, the average grant is $79,693 – enough for a family to pay off the mortgage and crawl out of debt, but not enough to actually rebuild.
The real problem with Road Home is that out of 103,710 applicants and 31,914 calculated benefits, only 391 homeowners had actually received their money, with an additional 321 scheduled for payment. That’s 712 homeowners out of 104,000. (Numbers as of Jan. 29.) These numbers, sadly, show an improvement over earlier progress – in mid-November, 27 out of 70,000 applicants had been paid, and in mid-December, it was 97 out of 90,000. Furthermore, many of these calculations are wrong, even cruel. “The number of Road Home award letters saying applicants will get nothing to fix their homes is nearly three times greater than the number who have received their grant money," the Times Picayune reported. At least 7,200 complaints have been registered “about everything from underestimated pre-storm home values to inadequate storm-loss estimates to the lack of resolution of previous complaints.” And unfortunately, there’s no way to hold the contractor that runs Road Home, ICF International, accountable. “Nervous state officials are essentially locked into the current arrangement, with no performance measures and no penalties to hold over ICF's head,” said another Times Picayune report.
Despite official, misleading press releases (disinformation campaigns) with titles like “Louisiana Homeowners Give The Road Home Program High Marks,” residents are ticked. At a recent informational session, ICF attempted to dispel various myths and rumors about the program – but to no avail. “The Road Home is a joke, honey,” said Betty Bender, 60, who had applied for a Road Home grant three months earlier. “Until I can see some money, it's a joke.”
How to fix Road Home? Five steps jump out at me. First, the insurance penalty should be eliminated and more federal funds should be allocated to make up the difference. Under the current system, people who were rich enough to buy insurance are given more money than people who couldn’t afford it – widening the wealth gap and penalizing the poor. I would then fire ICF (as the state legislature has called for); evaluate all relevant state employees to determine if inefficiency is a staff problem or a system problem; demand the federal Dept. of Housing and Urban Development exercise more oversight of their money; and come November, kick out Gov. Kathleen Blanco in favor of Rep. Bobby Jindal, her likely opponent. Blanco was involved in the planning of this program and has tied herself to it in radio ads – if she wants to board that ship, let her go down with it.
There’s no way to count the ongoing government mistakes surrounding Katrina recovery issues. FEMA has yet to get a single housing issue right, Mayor Nagin refuses to accept responsibility for any mistakes, and basic steps like restoring water and electricity take forever to accomplish. Sadly, while Road Home may be the worst of these problems, it is only one among many.
(I took this picture in the Lower Ninth Ward of New Orleans while working there all fall.)