LAKE CHARLES, La. – Gov. Kathleen Blanco outlined a $7.5 billion rebuilding, relocation and buyout plan Monday for thousands of residents whose homes remain damaged or destroyed after last year’s hurricanes.
It is Louisiana’s first comprehensive housing proposal since Hurricane Katrina devastated the Gulf Coast in August, followed a month later by Hurricane Rita.
“In the not too distant future, I predict the sounds of hammers and saws will be ringing through all of our communities as our homes are rebuilt,” Blanco said.
Assistance would be capped at a maximum of $150,000 per homeowner under the proposal. But direct relief is still months away, and homeowners receiving the aid could be taking on more debt to rebuild.
The draft faces scrutiny from local officials, state lawmakers and the affected residents; and it depends in large part on federal dollars awaiting congressional approval.
But the plan represents a significant step in using billions of already available federal recovery dollars.
About $4.2 billion of the money proposed for the program has been recommended by the White House but hasn’t yet been approved by Congress. Any plans for spending the federal aid that Louisiana already has received – and any additional housing money appropriated by Congress – would require approval from the Legislature and federal officials.
An estimated 128,000 owner-occupied homes had major damage by the storms and 210,000 more received minor damage, according to Blanco’s Louisiana Recovery Authority, which heard the proposal at its meeting in Lake Charles, a southwest Louisiana town heavily damaged by Rita.
The Blanco administration plan would provide money to repair or rebuild damaged homes and to relocate people who want to build elsewhere in Louisiana. For those who don’t want to relocate or rebuild in Louisiana, the plan would buy them out at 60 percent of the pre-storm home value.
While the program would not dictate what neighborhoods could be rebuilt, it would require that people who receive housing assistance rebuild to new federal standards that haven’t been finalized.
Some residents of flooded neighborhoods like the Lower Ninth Ward have worried that the new federal standards would require the elevation of homes and other storm-protective measures that would price them out of rebuilding. Also, under Blanco’s proposal, anyone rebuilding in the flood plain would have to carry flood insurance – another measure that could exclude some low-income homeowners.
The program would use a mix of direct grants and home loans, in some cases with no interest and no payments due until the homes are sold or transferred to new owners.
“The priority is to help people return to their way of life, to return to their homes and their communities,” said Walter Leger, an LRA board member who oversees housing efforts.
The program would only provide repairs and replacement homes that were equivalent to the homes damaged or destroyed by the hurricanes. So people wouldn’t be able to receive the maximum $150,000 if that would give them nicer houses than they had before Katrina or Rita.
“This is not everybody’s dream house,” said Andy Kopplin, executive director of the LRA. “This is a modest equivalent.”
Blanco intends to set up a call center in March to start the registration for housing aid. Homeowners must have uninsured damage of more than $5,200 to be eligible.
If Congress refuses additional housing aid for Louisiana, Blanco’s plans would shrink to match the funding available.