No Title? No Easy Access to Post-Katrina Aid

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Alice Cousin i

Alice Cousin says when her mother was alive, she "really worked hard" to buy the family home in the Holly Grove neighborhood of New Orleans. But because Cousin didn't formally change the title when her parents died, she's finding it difficult to get federal aid to help her rebuild it. John Ydstie, NPR hide caption

itoggle caption John Ydstie, NPR
Alice Cousin

Alice Cousin says when her mother was alive, she "really worked hard" to buy the family home in the Holly Grove neighborhood of New Orleans. But because Cousin didn't formally change the title when her parents died, she's finding it difficult to get federal aid to help her rebuild it.

John Ydstie, NPR

Stories of families trying to clean up homes damaged from Hurricane Katrina are by now familiar. But for many in New Orleans, moving back to their homes has been blocked — not by hurricane damage but by a lack of legal paperwork. As many as 20,000 New Orleanians have found that the city's pattern of informal property ownership has become an obstacle to rebuilding.

Take the Cousin family in Holly Grove, a family-oriented neighborhood where children play in the small front yards and old folks sit on porches.

The Cousin family home, long and narrow and shotgun style, stands empty. Alice Cousin lives in a rental house three blocks away, dreaming of the day she can move back in.

The house suffered some Katrina-related damage. "We got the wind that tore the upstairs part up," says Cousin. "All the sheetrock fell down on the stove in the kitchen. The gutters come off. I'm tryin' to get it fixed now so I can live in it."

Still, long after the August 2005 hurricane, the house stands unrepaired and moldering. That's partly because Cousin, who's 80 years old, does not have a proper title. Her parents bought the house in the 1940s, and the title remains in their name. The family didn't change the title when her parents died.

"You don't be thinkin' about nothin' like that. You don't think about it," Cousin says, "So when we did decide to do it, Mother was dead and Daddy was dead. So it was me and my other sister. Now my other sister passed last year. So that left just me."

According to law, Cousin and a dozen or so nieces and nephews have a claim on the property. When Cousin applied for government money to fix the house, she was initially turned down by the state-run Road Home Program, which funnels federal Katrina aid to homeowners for rebuilding. Cousin was told that to get the money, she had to prove she owned the home or get a power of attorney from all of the other heirs.

Cousin's daughter, Lois Robinson, says that's been a struggle, largely because of a nephew in California. Robinson says she thinks the nephew should give his share of the house to her mother, as the other nieces and nephews have done.

Clearing Up Problems

To sort things out, Cousin went to New Orleans Legal Assistance.

Lawyer Paul Tuttle and his colleagues have worked with hundreds of the city's poor and low-income homeowners to try to straighten out their titles. Tuttle says most of them didn't scrape together money to do the legal work sooner because there didn't seem to be a need to do so.

"They really didn't have to," according to Tuttle. "Nobody was trying to evict them from the home, and they just continued to pay the property tax and a lot of times they even paid the mortgage or insurance under the deceased person's name."

The result, he says, is that you have people living in the house one or two generations after the original owners died who are not on the title, and they don't have any clear way to prove they're the property's legal owners. That's a big problem when they go to the Road Home program, he says.

Fixing the problem has been difficult. Road Home has created some workarounds, such as allowing whoever claimed the homestead tax exemption on the house to collect the rebuilding money.

But New Orleans Legal Assistance Director Mark Moreau estimates thousands of people with title problems still are being deprived of money to rebuild.

"It's just a horrible result," Moreau says. "And it deprives the state of all the federal money that's been allocated, and it leaves blighted property throughout the region."

Moreau has been battling with Louisiana since late last year to renew his organization's grant to help people with these problems. The state was dragging its feet until a recent front-page story in The Times-Picayune focused on the issue. Now Moreau is hopeful the grant will be renewed.

A Concentration of 'Heirship Property'

Not far from the modest New Orleans Legal Assistance offices is the Shell Building, the city's tallest structure. The prominent law firm, Adams and Reese, occupies the top floor and has is a grand view. Real estate lawyer Malcolm Meyer points out neighborhoods, including the Ninth Ward, which Katrina left flooded. He says that's where a lot of the heirship property showed up.

Heirship property is a legal term for land handed down informally and owned by multiple heirs. Before Katrina, Meyer thought it was largely a rural phenomenon. It was common among poor farmers who died without a written will, Meyer says.

"They just let everybody know that the eldest son would get this piece, the other son would get this, the daughter and son-in-law would get that, and they divided it up that way and it was acceptable to everybody."

At the time of the storm, Meyer coincidentally had been reading a book by Peruvian economist Hernando de Soto. It described how the lack of property titles hurts many of the world's poor, blocking them from using their most important asset to build economic power. Without a title for collateral, they can't borrow money at low interest rates and invest it.

After Katrina, Meyer was shocked to learn how pervasive informal property transfers were even in the city. He realized that was the situation for as many as 20,000 poor or low-income New Orleanians. Such homeowners were deprived because, initially, the asset could "only provide a roof" over their heads, Meyer says. "But then once the roof was blown away, the asset couldn't even do that."

Complicated and Costly

Meyer, who wrote the definitive textbook on Louisiana Real Estate law, finally concluded that legally transferring a title is far more complicated and costly than it has to be.

For instance, he says, "by filling out a blank and just signing at the bottom, I can leave a $1 million life insurance policy to my wife or to one child and not another, but I cannot leave a $50,000 house ... just with a quick notation like that."

Instead, transferring the title of a $50,000 house — the approximate value of many houses in New Orleans' poorer sections — could cost $5,000, or 10 percent of its value.

This spring, Meyer — working with Louisiana Appleseed, a legal-aid nonprofit — got the state legislature to agree to examine the issue.

Help can't come soon enough for Cousin and others struggling to clear their titles, get Road Home money and rebuild there lives.

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