Amid Climate Change, FEMA And Government Aid Widen Wealth Inequality The federal government spends billions of dollars each year helping communities rebuild after disasters and to prevent future damage. But that money isn't always allocated to those who need it most.

How Federal Disaster Money Favors The Rich

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The U.S. government spends billions of dollars each year helping households recover after disasters such as the tornadoes this past Sunday in Alabama. Who gets that federal aid is always a big question after natural disasters. An NPR investigation out today finds federal disaster aid does not always go to those who need it most, instead favoring two groups - white Americans and people who already have safety nets.

NPR's Rebecca Hersher takes us to Houston with this story of two families who lost everything.

REBECCA HERSHER, BYLINE: The two families are the Papadopouloses.

JOHN PAPADOPOULOS: OK - John Papadopoulos, and I live on 10723 - well, lived - right? - yeah - 10723 Bayou Glen Road.

HERSHER: John is a family guy - two kids, a wife, works at Microsoft. The second family is the Evans family. Janice Perry-Evans has three kids, works at the post office.

JANICE PERRY-EVANS: I love my job. I'm one of them people that - them rare people that love their job (laughter). You know, sometimes we make people day.

HERSHER: Janice and her family rent a house on the east side. John and his wife own their house on the west side. They bought it back in 2007. And within a couple years, the floods began.

PAPADOPOULOS: So our house - yeah, so we flooded four times in a decade. So our house flooded in '09 and then 2015 and 2016.

HERSHER: And then the big one, August 2017.


UNIDENTIFIED NEWSCASTER: Good morning, everyone. Let's get straight to the breaking news - Harvey provoking an unfolding flooding disaster in America's fourth largest city, Houston, Texas.

HERSHER: The morning the storm arrived, both families woke up to more than a foot of water in the house. John and his wife carried their sleepy children to a neighbor's house. They eventually went to a hotel. Janice's family waded through chest-deep water until they were rescued by a dump truck. They ended up at the convention center downtown. Both of their homes were destroyed.

PAPADOPOULOS: My house was - it just looked like a washing machine inside. I mean, we lost 99 percent of everything.

PERRY-EVANS: If you guys had seen what the neighborhood looked like, we lost all that in just one day. We lost everything.

HERSHER: And when families lose everything in disasters, they turn to the federal government for financial help. But when the Evans and Papadopoulos families started applying for federal aid, they had radically different experiences, experiences that are emblematic of a trend - widening inequality after disasters exacerbated by federal disaster spending. We'll start with the Papadopoulos family. Right away, a lot of things went right for them. John's job was really helpful.

PAPADOPOULOS: I didn't have to use any time off. Technically my manager was like, don't even worry about it, man. Just take care. We got you.

HERSHER: With John's wages secure, they turned their attention to applying for federal money. First they applied online for assistance from the Federal Emergency Management Agency, FEMA. FEMA gives grants. The money doesn't have to be paid back. The Papadopoulos family got $30,000 because they owned a home that had been destroyed. The second place they applied was the SBA, the Small Business Administration.


UNIDENTIFIED PERSON: In the wake of a disaster, SBA provides low-interest disaster loans to homeowners, renters, businesses of all sizes and private nonprofit organizations.

HERSHER: The Papadopoulos family got a $25,000 low-interest loan. A few weeks after the flood, the family moved into a temporary rental house. But there was still the question of what to do with the flood house, as their 6-year-old calls it - repair it, sell it.

PAPADOPOULOS: I ain't touched the house for months. I just left it there full - the whole bit. That water sat in there for two weeks. I'm not bringing kids into it. The heavy metals alone - you're not going to Febreze or bleach them out of that wood. (Laughter) I don't care what you think.

HERSHER: In the end, the money from FEMA helped them pay to knock the house down. And there is one more longer-term way that FEMA could help. The family has applied for a buyout. They want the federal government to buy their empty lot and turn it permanently into open space.

So you still own the lot.


HERSHER: The local flood control district says it's likely that properties like theirs will get offered buyouts eventually if the owners can wait until the money is available, which could take years. But the Papadopoulos family can wait. They're doing OK financially. They're looking for a new house to buy.

Meanwhile, the Evans family has had a totally different experience. For the first few days after the storm, the family slept at the convention center. And as the relief at surviving wore off, Janice had one big concern.

PERRY-EVANS: My main thing was, I had nowhere to lay these - put these kids to lay their head. That bothered me so much.

HERSHER: So when her co-worker offered a spare room, she took it even though it was one room for the whole family, even though when she put food in the refrigerator, it disappeared somehow. Even though it was a 45-minute drive from her kids' school and from her work and her car had been destroyed in the flood, she took the room because she felt like she had nowhere else to go. And then, like the Papadopoulos family had, she started asking the government for help.

PERRY-EVANS: I applied for everything, and they gave me - the first time, they gave me $2,666 to get somewhere to live.

HERSHER: Two thousand six-hundred-sixty-six dollars specifically for housing. In Houston, it would have been enough to cover a deposit and first month's rent on a new place. But Janice needed that money for something else.

PERRY-EVANS: I had to go to work, and I had to get the boys back and forth to school. So I took that and put it for a car.

HERSHER: She used the money for a car. And then with her immediate transportation under control, she called FEMA back to see about applying for more money for housing and got reprimanded.

PERRY-EVANS: When I talked to one of the representatives, that's what they told me. They - some of them was kind of rude. Some of them felt sorry for me 'cause I would be crying. I would be crying about, hey, I have nowhere to go. I don't have no money. You guys - you're not helping me like I thought I was going to get the help that I was going to get.

HERSHER: FEMA gives grants for specific uses so it can keep track of who's been paid for what. That money was supposed to be for housing. The system was too rigid to handle Janice using it for something else. FEMA didn't bar her from reapplying for housing money. But after the scolding, she did not reapply. And this entire time, Janice never missed a shift at the post office. Often she worked six days a week. But her paycheck just wasn't cutting it, and her co-worker said the family needed to move out. So she applied for a low-interest SBA loan.


UNIDENTIFIED PERSON: SBA will conduct a credit check before scheduling an onsite inspection to determine your total verified losses.

HERSHER: Janice says when they checked her credit score, it was too low. She didn't qualify. Time was running out. A FEMA representative suggested she see about getting help from the Department of Housing and Urban Development, which required using her day off to go to an informational class. But she says she didn't qualify for that either because her income was too high.

PERRY-EVANS: It was like every time I tried something, it was an obstacle in the way.

HERSHER: Six months after the flood, Janice did the only thing she felt she could. She moved into a rental house that's more expensive than her old place and smaller. And the Evans family is not alone.

KATHY PAYTON: Recovery for vulnerable families look a lot different than it does for more affluent neighborhoods.

HERSHER: Kathy Payton is the executive director of the Fifth Ward Community Redevelopment Corporation in East Houston just a couple miles from where Janice lives. She says she's watched low-income families struggle to apply for federal aid because of all of the barriers that Janice ran into and more.

PAYTON: They don't always have all the paperwork. They don't always have a tax return. They don't always have the last two pay stubs. They don't always have driver's license. They don't always have all of these things.

HERSHER: As a result, Payton says she's watched richer, whiter parts of Houston recover more quickly. Private insurance accounts for some of that, but she thinks it's also because they were more successful at getting federal money. And national research backs that up. Junia Howell is a sociologist at the University of Pittsburgh. Howell is one of a handful of researchers who are taking a close look at who gets public money after disasters and who doesn't. And a pattern is emerging. After disasters, rich people get richer, and poor people get poorer, especially when the federal government steps in.

JUNIA HOWELL: We see these same patterns of wealth inequality being exacerbated in communities that receive more FEMA aid. But that's particularly true along racial lines, along lines of education as well as home ownership versus renting.

HERSHER: Richer people, white people - they're more likely to be homeowners. And those same people are more likely to get aid after a disaster in part because of programs like buyouts that specifically help homeowners who have lost their houses. Poorer people, people of color, people who are more likely to rent, people arguably who need cash the most after a major disaster are less likely to get it from the federal government.

NPR analyzed more than 40,000 FEMA records from one federal disaster aid program, home buyouts, like the one the Papadopoulos family are hoping to get and the one the Evans family doesn't qualify for. We found that most of them were in neighborhoods where the population was more than 85 percent white. David Maurstad runs the buyout program for FEMA and says it's working as designed. He says every potential buyout is assessed using the same basic criteria.

DAVID MAURSTAD: Buyouts have to be technically feasible. They have to be cost-effective. They need to be aligned with providing risk reduction for the community.

HERSHER: Last year, Congress agreed to increase FEMA's funding for so-called risk reduction, but it's largely up to local governments how to use that money - for example, to build floodwalls, update drainage.

MAURSTAD: I think a general conclusion would be there will be more buyouts, but I guess that's what - you know, we'll see how that unfolds in the future.

HERSHER: Sociologist Junia Howell says that trend is a wake-up call.

HOWELL: It - it's disturbing - like, deeply disturbing that we are spending billions of dollars a year, and those billions of dollars are adding to our inequality and, to me, calls for a deep reinvestigation into FEMA aid.

HERSHER: If inequality is being exacerbated a little bit now, she says, it will be exacerbated a lot more in the future. Climate change is driving more extreme rain in most of the country, which means more and more flood risk, which could mean more families like John's and Janice's. Take John. Within a year after the flood, his family was fine.

PAPADOPOULOS: I still got money in my pocket, you know? I'm not looking for a bunch of the handout stuff. I had some. I didn't like it, (laughter) really.

HERSHER: It being specifically federal disaster aid. When he looks at all the federal help his family has gotten since the storm, he is grateful and a little uncomfortable because he knows that other families have not gotten the same leg up, families like the Evans.

PERRY-EVANS: So it's a struggle now. It's really a struggle now to stay afloat. I went to a bankruptcy lawyer, and I paid him to pay - now I'm going to go ahead and file bankruptcy and get rid of some of this debt.

HERSHER: If the storm hadn't happened, do you think you'd be facing bankruptcy?

PERRY-EVANS: No 'cause it wasn't that bad.

HERSHER: It's not just the storm itself. It's everything that's happened since - the higher rent, the new car payment, the hours and hours spent filling out applications for money, most of which, it turned out, wasn't meant for families like hers. And Janice's job as a mail carrier means she sees a lot of other neighborhoods. She's watched other areas, other families recover more quickly.

PERRY-EVANS: And that's where the money went to - to out there, rich people. It's not fair, but, you know, that's just how America is. It's not right. But most of the time, white people get the advantage before we do anyway. So it's like, we already know (laughter). That's just how it work.

HERSHER: If she'd gotten more money, she says, she would have moved, bought a house on higher ground. Rebecca Hersher, NPR News.

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