Grant Program Fails Louisiana Storm Victims

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More than 1,000 homeowners in Louisiana are still waiting for payment from a government program that was supposed to assist victims of Hurricanes Katrina and Rita. Officials say the program is still short billions of dollars.

STEVE INSKEEP, host:

More than 100,000 homeowners in Louisiana are still waiting for their Road Home grants. That's money to compensate them for damage caused by hurricanes Katrina and Rita. The Road Home Program is finally distributing more money, this week topping the $1 billion mark. But state officials say the program is coming up at least $3 billion short.

From New Orleans, NPR's David Schaper reports.

DAVID SCHAPER: Since its start last summer, the Road Home Program has been plagued by administrative problems and bureaucratic bungling, and just about everybody who's applied for the grants has a story. Vivian Buckner applied last October, then waited and eventually got called to Baton Rouge for an interview and to get copies of her paperwork on a CD.

Ms. VIVIAN BUCKNER (Road Home Grant Applicant): When we were reviewing mine, I had other people's information on mine because I noticed it wasn't the right Social Security number. And then as we scanned and went down, I saw some other information on there that was not mine. So then it took me two hours and 45 minutes to get everything to go through the process.

SCHAPER: But Buckner considers herself one of the lucky ones. She had flood insurance to cover some of the damage to her home and her home is now livable, thanks to the work of her son Omar, volunteers, and a few hired hands. But it's not complete. Her electrical work isn't finished so she has to carry an extension cord from room to room when she needs light. And she says she expected Road Home to make up the difference between what her insurance paid, other aid she received, and the full cost of the damage.

Ms. BUCKNER: That's not so - I only got - I got a grant of $5,000. But by the time they took out the title search and whatever else they had to take out, I got 4,000 something.

SCHAPER: Vivian Buckner says she accepted the check but also appealed and hopes to get more. Meanwhile, she says while she's back home, she's the only one on her block in New Orleans East, as many of her friends and neighbors wait to find out how much they'll get and when.

Ms. BUCKNER: Well, just looking at my neighborhood, we basically had a lot of retired senior citizens on my block, and they have not returned. And some have, you know, died over the last two years. And their families are not going to return to those houses, so I see my neighborhood as really dying.

SCHAPER: State officials acknowledged there were problems in the first several months and say mistakes were made by the contractor hired to administer the program, ICF International. An ICF spokeswoman blames many of the early problems on changes federal and state officials made to the program after it started - not to mention the challenge of launching the largest housing recovery program in U.S. history. She says more recent changes to the program and better staffing have put the Road Home program on track, putting much needed federal rebuilding money into the hands of the homeowners that need it.

By February, for example, fewer than one percent of homeowners who had applied had received their Road Home grants. By this week, 14 percent had closed. But now Louisiana officials warn the Road Home Program may be running out of money, projecting that it will need at least $3 billion beyond the $7.5 billion already allocated. The state says federal officials underestimated how many homeowners would need assistance, and award amounts are much higher than expected because damage is much more severe and the cost of rebuilding higher. And insurance payouts have been far lower than expected, leaving the government to pick up more of the rebuilding tab. Walter Leger, who chairs the Housing and Redevelopment Task Force for the Louisiana Recovery Authority, adds one more factor.

Mr. WALTER LEGER JR. (Louisiana Recovery Authority): Basically we're told here comes the money, but it sits in Washington wrapped in red tape. And basically the people of Louisiana are told you guys figure out a way to cut this Gordian knot.

Ms. SUSAN ASPEY (Federal Gulf Coast Recovery Office): Well, actually, that's disingenuous argument because the fact of the matter is that the state designed its Road Home Program without ever consulting FEMA.

SCHAPER: That's Susan Aspey, spokeswoman for the Federal Gulf Coast Recovery Office, who says Louisiana officials could have prevented many of the roadblocks they've encountered in their own Road Home Program. She says federal officials are willing to evaluate the need for more federal funding but first want to look at how the state has spent the hurricane recovery money it's already received.

Such finger pointing will likely continue this afternoon when a Senate subcommittee on disaster recovery holds a hearing on the problems plaguing the Road Home Program.

David Schaper, NPR News, New Orleans.

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