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And I'm Melissa Block.
When Katrina's floodwaters receded, they revealed a pattern of informal property ownership in many of New Orleans' poorest neighborhoods. Homes were passed from generation to generation based on family ties and inheritance, but without legal paperwork.
As NPR's John Ydstie reports, this lack of a paper trail has caused problems for as many as 20,000 people trying to rebuild.
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JOHN YDSTIE: The modest neighborhood of Holly Grove is a family-oriented place. Children play in the small front yards, old folks sit on the porch. And at the corner of Birch and Holly Grove Streets, the Cousin family home, a long narrow shotgun house with a second story on the back, stands empty.
Ms. ALICE COUSIN: My mother worked hard to get that house. And she was real proud of it.
YDSTIE: Alice Cousin, the matriarch of the family, lives in a rental house three blocks away, dreaming of the day she can move back into the family home. There wasn't much floodwater here, says Cousin.
Ms. COUSIN: We got the wind, the wind that tore the upstairs part up. All the sheetrock fell down on the stove and kitchen. The gutters come off. I'm trying to get it now fixed so I can live in it.
YDSTIE: Two and a half years after Katrina, the house stands unrepaired and moldering. That's partly because Cousin, who is 80 years old, does not have a proper title. Her parents bought the house back in the 1940s and the title remains in their name. The family didn't change it when her parents died.
Ms. COUSIN: You don't be thinking about nothing like that. You don't think about it. So when we did decide, you know, to do it, mother was dead then, daddy was dead. So it was me and my other sister. Now my other sister passed last year. So that left just me.
YDSTIE: Well, it's just Alice Cousin and a dozen or so nieces and nephews who the law says also have a claim on the property. So when Cousin applied for government money to fix the house, she was initially turned down by the Road Home Program. That's the program run by the state of Louisiana that 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. Her daughter, Lois Robinson, says that's been a struggle, largely because of one nephew in California.
Ms. LOIS ROBINSON: He hasn't been down here in years. He doesn't know the condition of the house. First of all, he has not put a nail, a thimble, or nothing in this house, but you want to share. To me, I don't feel like it's right for him to have a share, but by law this is what has to be done. You know, this is your aunt, you know, she's old, look like you should go ahead and just give the share like the other ones.
YDSTIE: To sort things out Cousin went to New Orleans Legal Assistance. Lawyer Paul Tuttle and his collogues 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 the money to do the legal work sooner because it didn't seem like a priority.
Mr. PAUL TUTTLE (New Orleans Legal Assistance Corporation): They really didn't have to. Nobody was trying to evict them from the home, and they just continued to pay the property tax, and a lot times they even paid the mortgage of the insurance under the deceased person's name. So the result is now that you have people living in the house maybe one or two generations later that are not on the title, they don't have any clear legal way to prove that they're the owners of this property, and that's a big problem when they go to the Road Home.
YDSTIE: Fixing the problem has been slow going, says Tuttle. The Road Home has created some workarounds, like allowing whoever claimed the homestead tax exemption on the house to collect rebuilding money.
But New Orleans Legal Assistance Director Mark Moreau estimates there are still thousands of people with title problems who are being deprived of money to rebuild.
Mr. MARK MOREAU (New Orleans Legal Assistance): It's just a horrible result. And it deprives the state of all the federal money that's been allocated, and it leaves blighted property throughout the region.
YDSTIE: Moreau has been battling with the state 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 Times-Picayune front-page story focused on the issue. Now Moreau is hopeful the grant will be renewed.
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YDSTIE: Just out Poydras Street from the modest New Orleans Legal Assistance offices, the prominent law firm Adams and Reese has offices in the top floors of the Shell Building, the tallest building in the city. There's a grand view from the boardroom on 45th floor. Real estate lawyer Malcolm Meyer points out neighborhoods below.
Mr. MALCOLM MEYER (Attorney): And you have the Upper Ninth Ward, Lower Ninth Ward, and all of that flooded, and that's where a lot of heirship property showed up.
YDSTIE: Heirship property is a legal term for land handed down informally and owned by multiple heirs. Before Katrina, Mayer thought it was a largely a rural phenomenon, common among poor farmers who died without a written will.
Mr. MEYER: 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 would divide the land up that way and it was acceptable to everybody.
YDSTIE: After Katrina hit, Meyer was shocked at how pervasive the phenomenon was even in the city, and he came to a couple of conclusions - one, that the pattern of informal property transfer was depriving poor and low-income people of some of the economic power of their most important asset. Coincidentally, at the time of the storm Meyer had been reading a book by a Peruvian economist, Hernando de Soto, which described how the lack of title to property hurts many of the world's poor. For instance, it deprives them of collateral to borrow money at low interest rates to invest and improve their economic situation. Meyer realized that was exactly the situation for as many as 20,000 New Orleanians.
Mr. MEYER: They're deprived because then the asset that we're talking about can only provide a roof over your head. But then once that roof was blown away, the asset couldn't even do that.
YDSTIE: After thinking about it further, Meyer, who wrote the definitive textbook on Louisiana real estate law, began to believe that legally transferring title is far more complicated and costly than it ought to be.
Mr. MEYER: I can take out a life insurance policy, and by signing and filling out a blank and just signing at the bottom I can leave $1 million dollar life insurance policy to my wife, to one child and not another, but I cannot leave a $50,000 house in the same fashion just by a quick notation like that.
YDSTIE: Instead, transferring the title to a $50,000 house, about the value of many homes in the poorer sections of New Orleans, could cost $5,000, 10 percent of the value of the property. Meyer, working with Louisiana Appleseed, a legal aid nonprofit, managed just this spring to get the state legislature to agree to examine the issue. Help is not likely to come soon enough for people like Alice Cousin, who are currently struggling to clear their titles, get their Road Home money, and rebuild their lives.
John Ydstie, NPR News.
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