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MELISSA BLOCK, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

ROBERT SIEGEL, host:

And I'm Robert Siegel.

Cruise ship, hotel, FEMA trailer - after Hurricanes Katrina and Rita, those were the main housing options for people left homeless. Congress gave FEMA $400 million to design something new and better, and one solution was the so-called Katrina Cottage. These pastel structures are not quite houses but they're more home-like than trailers. But today, barely 2,000 of them are in use.

NPR's Audie Cornish wanted to know why.

AUDIE CORNISH: Here's how a story on the Katrina Cottages should have ended.

Ms. BRENDA ACOSTA: Hi. My name is Brenda Acosta, and welcome to my Katrina Cottage.

(Soundbite of laughter)

CORNISH: After years of living in a FEMA trailer in Carrier, Mississippi, Acosta is getting out. And into a petal-pink cottage with white scalloped trim. Thanks to a federal grant program, state emergency officials delivered it free of charge.

It's got two bedrooms, air conditioning, and a kitchen with a microwave.

Ms. ACOSTA: That's my son's room. And we have - dryer can go there and washer goes there, and a big old bathroom with a tub.

(Soundbite of laughter)

CORNISH: Next to her dingy travel trailer, it looks like Barbie's dream house. But in reality replacing trailers with Katrina cottages is still a dream in places like downtown New Orleans.

Ms. MARIANNE CUSATO (Designer of Katrina Cottage): We're in a parking lot, and it's just a concrete pad with little white boxes.

CORNISH: Marianne Cusato designed the Katrina Cottage so people wouldn't have to recover from a disaster in FEMA units like these.

Ms. CUSATO: What we're standing next to looks worse than a trailer; it actually looks like a shipping container. And people are living in what we sort of send freight cross-country in.

CORNISH: Her solution; a prefab shotgun house that could be built quickly in large numbers and delivered on trucks. If you put wheels on a Katrina Cottage, it's temporary. If you dig a foundation, it's permanent. And that's part of the problem.

States in the FEMA grant program weren't sure which it should be.

Mr. RANDALL KINDER (FEMA Grant Program): Some of the confusion has been, okay, what do we do with permitting? How we deal with finding the right location?

CORNISH: Randall Kinder runs the grant program for FEMA.

Mr. KINDER: These are things that made each project very interesting, and that's why each one is running in a different stage.

CORNISH: Well, Kinder is trying very hard not to say is that there are whole states like Louisiana, Texas, and Alabama, where the programs have been mired in red tape over contracts, permits and zoning.

(Soundbite of moving vehicle)

CORNISH: Mississippi at least has built and delivered 2,000 Katrina cottages, but even that hasn't been easy.

Mr. KEITH JOHNSON (Director, Katrina Cottage Program, Mississippi): We would like to have placed a unit for everyone that was eligible.

CORNISH: Keith Johnson directs the cottage program for the state of Mississippi. At this Gulfport staging area, dozens of cottages stand like pastel perennials sprung from a gravel lot. Johnson says many storm survivors wanted a cottage but couldn't get one. Cities and towns erected a maze of permitting requirement. Communities feared today's temporary cottages would end up tomorrow's neighborhood blight.

Mr. JOHNSON: It's an obstacle, and unfortunately, there are some families that are paying the price.

CORNISH: That means Brenda Acosta is one of just 2,100 families who have successfully swapped their trailer for a cottage. And the state plans to take it back in a year. Acosta says she hopes that will be enough time to get back on track with her job and home repairs. But really she wishes the state would let her keep the cottage. She'll pay them back.

Ms. ACOSTA: It's been almost three years now, and you'd think people would be on their feet, but it's like you keep trying and trying and you can't get anywhere.

CORNISH: Whether Acosta will be able to keep her little pink cottage is up in the air. And so is the bigger question of whether Katrina cottages will be FEMA's top choice for the next disaster.

Audie Cornish, NPR News.

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