Topic: Road Home Program
Unblocking the Road Home
Can the state's major initiative to rebuild southern Louisiana actually succeed? Or will the money and efforts be wasted?
By J.B. Borders
"Leave it to Louisiana to mess up even the simplest things," an elderly black homeowner said recently in a tone that mixed resignation with disgust. We were discussing the Road Home Program. She didn't have much to say that was positive.
Like tens of thousands of other Orleanians, she has spent her own savings to gut her house. She's also joined a class action law suit to protest what she considers an insultingly low payment from her insurance company.
"I call it the Louisiana Unfair Plan," she says about her insurer, the state-operated Louisiana Fair Plan.
Last August, the homeowner -- who prefers to remain anonymous in order to avoid any future recriminations -- also applied to the Louisiana Road Home Program, a $7.5 billion federally-financed grant fund established as part of the Louisiana Recovery Authority. She hoped the Road Home would provide the supplemental funding she needs to continue rebuilding her home.
It hasn't. Not yet, at least. Instead, she claims to have become ensnared in a cumbersome and confusing process that shows no signs of ending any time soon.
Worse, the recent spate of negative publicity about the excruciatingly slow pace at which awards are being made and the relatively small size of the program's announced grants have caused her to despair that the Road Home will be of much help even if she eventually receives a check.
"The Road Home is a big disappointment," she says. "It's a joke, a joke on us."
That assessment is shared by a large number of other homeowners throughout the city and across the state.
The outcry over the program's ineffectiveness grew so strong in the past few weeks that Governor Kathleen Blanco was forced to call in the program s managers for a meeting to address the Road Home's problems. Several political pundits say Blanco's chances for reelection in 2008 will hinge on the perceived success of the program.
While the Road Home managers placed the blame on bottlenecks at private insurance companies and federal agencies, they promised nonetheless to turn the program around in the next few months and get money into the hands of applicants much more quickly.
Whether they will be successful remains to be seen. As of Thanksgiving, more than 80,000 individuals had applied to the Road Home for assistance but fewer than 50 had actually received any checks. Moreover, the average payout has been slightly less than $50,000. That s a third of the maximum amount available to eligible applicants.
Under the Road Home program, the largest grant a homeowner can receive is $150,000. All insurance payments, Federal Emergency Management Agency aid and Small Business Administration loans or grants must be subtracted from that maximum.
In addition, homeowners who were not insured before the storm are penalized as are those who intend to take their Road Home awards and rebuild outside Louisiana.
Blanco said Road Home officials told her they are having difficulty calculating what is owed to many applicants because the private insurance companies and federal agencies have not yet divulged what has been paid in claims to the homeowners.
The company managing the Road Home program is ICF Emergency Management Services. It's a subsidiary of ICF International, a publicly-traded Fairfax, Virginia-based consulting firm that is heavily dependent on government contracts. In June and October 2006, ICF signed a $756 million agreement with the state's Office of Community Development to run the Road Home Program. The contract is for a three-year term.
ICF officials describe the deal as possibly '"the largest non-construction contract ever awarded by the State of Louisiana." They also acknowledge that the Road Home undertaking is expected "to be our largest contract over the next several years."
"We are honored to be part of this noble effort," said Michael Byrne, a former FEMA official who is now an ICF senior vice president and chief program executive for the Road Home. "We intend to make the Road Home the national model for disaster recovery and community rebuilding."
Under the contract with the state, the ICF team is providing outreach to homeowners and assistance with the application and eligibility process, in accordance with state guidelines, for qualified homeowners and small rental unit landlords affected by hurricanes Katrina and Rita.
In addition, ICF officials say the contract funding will continue to provide for hiring and training; leasing, establishing, and maintaining housing assistance centers; building the information technology infrastructure for processing the applications and subsequent data verifications; staffing and maintaining a full-service call center; and funding the program's outreach.
ICF's efforts are augmented by a team of high-powered Louisiana-based subcontractors who are getting pieces of the $756 million in contract fees. The major subcontractors include Deltha Corporation; First American Title Insurance Company of Louisiana; Franklin Industries; Jones, Walker, Waechter, Poitevent, Carrere & Denegre, LLP; Network Technology Group; Peter A. Mayer Advertising; Providence Engineering & Environmental Group; and Shaw Environmental and Infrastructure.
The Road Home Program has opened its headquarters in Baton Rouge and 10 new housing assistance centers throughout the state, including one on Poydras Street in New Orleans. A second housing assistance center is scheduled to open in New Orleans East by mid-December.
As part of its plan to speed up the delivery of grant awards, ICF officials say they plan to hire additional workers. The program has already proved to be a significant new employer in the city and state. More than 1900 people work for ICF in Louisiana, including 316 in metropolitan New Orleans. The New Orleans area work force is 49 percent black, which indicates that the company is not exactly hostile to the needs and interests of the city's majority.
"Many of our employees were displaced by hurricanes Katrina or Rita and are applicants themselves," Carol Hector-Harris, ICF public information officer, said.
ICF plans to hire an additional 230 workers by the end of January 2007. The company s recruiting efforts even included a career fair during this year's Bayou Classic in New Orleans.
An estimated 123,000 homeowners are expected to be eligible for support from The Road Home. Only two-thirds of them have applied to the program so far.
And despite the plans for ramping up the program's staffing, some critics of the program say it has structural flaws that make it virtually impossible for many homeowners to secure adequate funding from the program to rebuild their homes. The key problem, they explain, is that the program factors in the official pre-Katrina assessed value of homes in determining award amounts. A house that was assessed at $100,000 before the hurricane, for example, is eligible only for that amount as a maximum award. But it is not likely that the home could be rebuilt today for that amount.
As a result, critics say that what really matters is the estimated cost to rebuild in the post-Katrina environment, where construction costs are averaging $130 a square foot. They say that's what The Road Home funding policies should be based on. They say the program should be geared toward guaranteeing the total replacement of damaged homes.
Program leaders have yet to publicly respond to those recommendations though increasing numbers of program applicants have begun to express their dissatisfaction with the way grant awards are being calculated.
In the meantime, there is also growing momentum among displaced Louisianans to expand the Road Home Program to include support for renters in addition to homeowners and small landlords. Proponents of the measure say making payments directly to renters is the fastest way to repopulate the city and revitalize its economy. They say the program needs to focus on supporting the return of "residents," not just homeowners.
Program officials counter that the Small Rental portion of the program, which is designed to help landlords restore rental properties, is a key component of the effort to help renters get resettled.
Nevertheless, several grassroots organizations, including the People's Hurricane Relief Fund and Oversight Coalition, have demanded that the governor do more. Specifically, they want the state to use the federal funds to provide renters "with resources to aid with moving costs, deposits, and rent assistance."
The grassroots organizations also want the state to stop rent gouging, to halt the planned demolition of public housing and to reopen as many public housing units as possible.
Instead of being a national model for "disaster recovery and community rebuilding," activists and observers from across the political spectrum say the program now has the very real potential to become a disaster itself and a prime tool in the destruction, not rebuilding of post-Katrina New Orleans. Good intentions, they say, are not enough. Good results are all that matter.
If the Road Home program continues to be "a joke," as my elderly homeowner acquaintance called it, the big question is who will get the last laugh -- the elected officials, the contractors or the people?