Thursday, May 24, 2007

Road Home Update

This morning in my “Making of American Public Policy” course, we discussed bureaucracy and privatization. The professor spoke at length about Walter Reed army hospital and the chronic lack of accountability it suffered after privatization. It got me thinking about Louisiana’s Road Home Program, which I wrote about in February. It’s the federally-funded, state-created program for giving rebuilding grants to homeowners. Most of the actual work has been contracted out to a private company, ICF International. The program kicked off full-time in October; here’s how ICF International is doing as of May 21, per the official Road Home website:

Applications Received:
138,557

Number of Grants Calculated:
79, 290

Number of Grants Paid Out So Far:
19, 882

Average Grant Amount:
$75,426

In other words, a majority of homeowners have now been told how much money to expect to get, but only 14.35% have actually seen a dime. What’s more, that $75,426 average amount is only half of what many homeowners were led to believe they were eligible for. At least the numbers are better than they were in February, when only 712 homeowners had been paid, out of 103,710 (although the average grant has declined $4,000 in that time). Remember, the storm happened 21 months ago, and the program started 7 months ago. KPLC-Lake Charles reports, “Frank Trapani of the New Orleans Realtors Association describes the Road Home program as the state's second disaster.”

Why such dismal performance? There could be any number of reasons, but a lack of accountability is a big one. Governor Blanco met with the ICF executives to yell and scream about her displeasure, but she hasn’t actually fired them or docked their pay. ICF International has also begun running a smaller state recovery program for renters, a program the legislature was worried about. As the Times Picayune reported, “Nervous state officials are essentially locked into the current arrangement, with no performance measures and no penalties to hold over ICF's head.”

If the state government can’t do its job, we need Congress to step up and do theirs. They should require the Department of Housing and Urban Development, which funds Road Home, exercise more oversight. The program is also suffering from a $3 billion shortfall. Please write your Senators and Congressman, as well as the relevant committees, and tell them you care about this issue; demand they pass legislation allocating that $3 billion and requiring HUD to exercise more oversight. The relevant committees are the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services.

UPDATE: I felt this Daily Kos comment from New Orleans resident nolalilly was worth highlighting. "I don't qualify for Road Home money but so many people have been counting on it for the longest time. I don't know that much about it but I have several friends and aquaintances who have put their lives on hold waiting for what is supposed to be theirs. In the meantime, they continue living in limbo, paying mortages on houses that are either unlivable or bulldosed. I have heard that the average payout would be somewhere between 100K and 150K. So far, what little money has eked out has been sadly lacking... It is an American disgrace."

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