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Improving The Road Home to Better Meet Your Needs

Actions Taken In Response to Public Comments and Feedback

Hurricanes Katrina and Rita caused unprecedented devastation throughout South Louisiana, destroying more than 123,000 homes, 82,000 rental units and 18,000 businesses. In response to these catastrophic events, Governor Kathleen Babineaux Blanco and the Louisiana Recovery Authority, working with the Office of Community Development and national housing experts, designed a housing program, know as The Road Home, that will provide opportunities for residents to get back into their homes and help re-establish their lives in Louisiana.

Since The Road Home was introduced in February, more than 1,000 homeowners, community advocates, members of the Legislature and elected officials provided feedback and comments on the proposed plan. Citizens were invited and encouraged to provide feedback on the housing plan at by phone, fax or e-mail and in person at several task force meetings. Two community meetings were also held in Lake Charles and New Orleans specifically for the purpose collecting public feedback.

In an effort to design the best program possible to restore Louisiana's lost housing stock, The Road Home was revised in response to many of these concerns.

Click on the subject heading to read a detailed summary of the concern expressed and the action that was taken to address the concern.

Income eligibility requirements

Opposition to the income eligibility requirements was the most common comment submitted. Respondents believed that those with family incomes above 70 percent annual median income (AMI) were in need of assistance and that it was unjust to exclude them from receiving financial assistance based on their socioeconomic level pre-Katrina. Specifically, the requirements are unfair to the middle class. One organization suggested that the contingency Plan if the program is not fully funded should be modified to target owners at or below 80 percent of AMI and if funds are not exhausted, only then should those lying outside of the flood plain who were flooded be helped. The Louisiana House of Representatives, through House Resolution 32, suggested that the program remove any limits on assistance to homeowners based on income.

RESPONSE: Under current, partial funding levels, the Plan was revised to include all homeowners with major or severe damage, providing them 50% of the assistance for which they will be eligible when Congress has appropriated the additional $4.2 billion. If the additional funds are appropriated, homeowners will receive the remainder of the assistance for which they have determined to be eligible.

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Eligibility of homeowners to receive assistance

Most of the comments within this section expressed the sentiment that all homeowners who had damage to their home should receive funding assistance regardless of geographical location, income level, or insurance payouts. Many believed that the hardest hit areas should receive priority. Some believed that Gulf Opportunity Zone Low Income Housing Tax Credit (GO Zone LIHTC) projects should go to the most heavily impacted parishes. One respondent recommended total inclusion by spreading limited resources over a broader base by reducing compensation caps and expanding the pool of funds by reallocating other CDBG grants or limiting the number of developers eligible for funds.

Concern was raised about eligibility and assistance to homeowners and their heirs that were deceased or infirm as a result of or since the storms.

RESPONSE: Under current, partial funding levels, the Plan was revised to include all homeowners with major or severe damage, providing them 50% of the assistance for which they will be eligible when Congress has appropriated the additional $4.2 billion. If the additional funds are appropriated, homeowners will receive the remainder of the assistance for which they have been determined to be eligible.

The LRA clarified the guidelines for the assignment of benefits to legal heirs and holders of legal rights of homeowners that would otherwise be eligible for the program. See Section 2.6 for more detail.

The LRA established that a percentage of rental redevelopment funding will be allocated to the most affected parishes based on the estimated damage to rental units.

The LRA strongly urges the Louisiana Housing Finance Agency to direct that GO Zone LIHTC benefits be similarly targeted to parishes which suffered the most damaged or destroyed rental properties, as described for the Workforce and Affordable Rental Housing programs (Section 3.1).

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Language and accessibility of the Plan

Many of the respondents were confused about whether or not they are eligible for funding assistance and if so, how to go about applying for and receiving assistance. Generally speaking, the eligibility guidelines require more clarification. Some found the grant calculations to be confusing and overly complex. Respondents found the Plan ambiguous in certain sections and were unclear about the following terms used throughout the Plan:

  • "Damage" as well as the qualifiers "major", "severe", "destroyed", "substantial"
  • "Affordable housing"
  • "Disability"
  • "Supportive Services"
  • "Pre-storm value"
  • "Allowed repair/rebuilding cost"
  • "Mixed-income community"

The Plan was inaccessible to foreign language speakers who attended the public hearings where there were not enough interpreters. The public hearings also offered no opportunity for formal dialogue and discussion.

One commenter suggested that a "Frequently Asked Questions" section be added to the website.

RESPONSE: To combat that confusion, Appendix 2 was updated to better illustrate the total extent of costs and benefits to homeowners. A third example was included to demonstrate a broader range of circumstances, and the LRA took the opportunity to correct an error in our previous version in which we did not include the penalty for being uninsured. In Section 2.4, the LRA clarified and gave more detail on determining pre-storm value, repair cost, and the overall value of the financial benefits of the program.

A "Frequently Asked Questions" section is already present on the website and will be updated. As the program design is refined and implemented with the Contractor, program materials will include a glossary of these and other terms.

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Timeline

One commenter mentioned that the levees should be repaired before housing funding assistance is distributed but all other comments, particularly those received during the Lake Charles and New Orleans public meetings, concerned the fact that the funds are not being dispersed quickly enough.

RESPONSE: The LRA believes that safety in rebuilding is one of its primary priorities. Comment noted.

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The elderly and individuals with physical and mental disabilities

The current Plan provides no provisions or assistance to the elderly and those with physical and mental disabilities and should be revised to do so.The Advocacy Center had the following list of recommendations to provide for individuals with physical disabilities:

  • Assistance should be provided to people with disabilities to help them rebuild with ramps and lifts, particularly for homes that need to be elevated.
  • Additional incentives should be provided to landlords who build lifts and ramps thereby making their rental units more accessible and prioritize landlords under the small rental property program who make units accessible.
  • Incentives for the set aside of accessible units.
  • For the renter’s registry, ensure that data indicate accessibility features for people with physical disabilities.
  • Make sure that information on accessibility is available in Assistance Centers.
  • Supportive services are not defined in Plan and must be defined as broadly as possible.

One proposal calls for enough funds to support the creation of 5,000 new units of permanent supportive housing in New Orleans to ensure that all disabled, displaced residents can return.

RESPONSE: Section 3.2 outlines funding set-aside for supportive services specifically targeted to the elderly and those with physical and mental disabilities, allowing an estimated 3,000 units to receive supportive services under the fully funded program. Section 4 describes allocations of funding for supportive services for the elderly and disabled in the homeless programs.

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Issues not considered in Plan

  • No funding dedicated to economic and business development or a strategy to attract outside investment to the area are missing from the Plan
  • No commitment or funding for cultural preservation of the area
  • No consideration of immigrants to receive assistance
  • Lack of funding investment in infrastructure including schools, hospitals, airports, roads, and bike paths to attract outside investment in housing and businesses
  • One commenter noted that the Plan should formally recognize that the failure of the levees was the responsibility of the United States Army Corps of Engineers.

RESPONSE: As with all HUD programs, this program is available to legal immigrants and language accessibility is a priority in the development and administration of programs. Other comments related to economic development programs will be dealt with in future action plan amendments. CDBG funds are prioritized for housing, infrastructure and economic development and the LRA is supporting local planning efforts that will endorse cultural preservation initiatives.

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Penalty for lack of necessary insurance

The current reduction by 30 percent of the incentive grant to a homeowner failing to carry the type of insurance required for the damaged home (i.e. individual did not carry flood insurance but lived in the flood plain) unfairly disadvantages the poor. Respondents were opposed to this reduction to the grant, mainly on the grounds that the assistance is needed. In addition, damage inside the flood plain was due to levee failure and therefore, homeowners should not be penalized for not having insurance.

RESPONSE: The LRA board considered this proposal and believes that the 30% reduction is a balanced and fair policy.

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Deduction of insurance proceeds from assistance funding

The Plan should not deduct insurance payouts when determining funding assistance. Giving funding assistance to individuals without flood insurance is unfair to those with insurance. Those who had homeowner's insurance but did not carry flood insurance should also be provided with some additional financial benefit. Under the current grant calculations, the amount of funding that would be distributed to individuals who had insurance is not enough to cover losses. A lot of individuals were forced to use their insurance settlements to pay off their mortgages and do not have money remaining to repair and rebuild. In particular, the Plan does not compensate those with large mortgages. After paying off his mortgage with flood insurance, one respondent noted a replacement home will cost more than double their original mortgage but since the respondent received more than $150,000, the individual is not eligible for assistance. ACORN recommends structural assistance to these types of individuals.

RESPONSE: The LRA explored the option and clarified with HUD that, pursuant to federal statute and HUD requirements for the CDBG program, homeowner assistance may not duplicate any benefits, derived from any source, that are received by the homeowner as a result of damages incurred during Hurricanes Katrina and Rita.

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Flood plain eligibility requirements

Individuals who live in the flood plain should be eligible to receive funding. All areas of New Orleans are susceptible to flooding and it is important to consider what lies below New Orleans East.

RESPONSE: Under current, partial funding levels, the Plan was revised to include all homeowners with major or severe damage, providing them 50% of the assistance for which they will be eligible when Congress has appropriated the additional $4.2 billion. If the additional funds are appropriated, homeowners will receive the remainder of the assistance for which they have determined to be eligible.

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Deduction of FEMA repair assistance grant

The FEMA repair assistance grant should not be deducted from the eligible assistance grant.

RESPONSE: The LRA explored the option and clarified with HUD that, pursuant to federal statute and HUD requirements for the CDBG program, homeowner assistance may not duplicate any benefits, derived from any source, that are received by the homeowner as a result of damages incurred during Hurricanes Katrina and Rita.

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Using FEMA to establish eligibility

FEMA damage assessments are inaccurate because many inspectors were not well-trained enough to determine the extent of damage that is a requirement to be eligible for funding. As a result, many houses were not properly registered with FEMA Individual Assistance and people were unfairly turned away or the damage on their properties was undervalued. Because so many people had trouble with the FEMA application process, it is necessary to develop an alternate route for demonstrating major damage rather than simply an appeal. In addition, non-English speakers were largely excluded from this process due to a lack of foreign language materials explaining the process. The FEMA regulations unjustly exclude many lawfully present legal immigrants who have lived in Louisiana for years. Language barriers and sheltering in Honduran and Vietnamese communities that did not have access to FEMA program and deadline information prevented thousands from applying for assistance. For these reasons, assistance should not be tied to the status of the FEMA claim or alternatively, the Plan should be amended to require that households prove that their homes were damaged through FEMA's findings or some other means. One commenter thought the Plan should align itself with the letter and spirit of FEMA's definition of “substantially damaged.

RESPONSE: Recognizing that FEMA has not been uniform in its assessment of damage in all cases, nor have they been uniform in notifying homeowners of damage assessments, the Plan has been amended to make it clear that homeowners may appeal their eligibility based on an alternative damage estimate. In certain cases, FEMA may fail to notify a homeowner that the home has been classified as destroyed or suffering major damage, or FEMA has declared a home with such damage ineligible for its home repair assistance program because the home was covered by insurance. These homeowners will still be eligible for assistance, though damage severity that meets the FEMA damage classification at the destroyed and major damage levels will be verified through alternative means. The Plan states on page 6: Homeowners that believe they have suffered major or severe damage, but did not qualify for FEMA assistance will be able to appeal their eligibility for The Road Home.

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Primary residence provision

Proof of primary residence is an unfair provision and secondary homes should also be considered eligible to receive assistance. Requiring proof of home ownership is too inflexible and would unfairly affect those who inherited their homes but did not file paperwork and those who lost ownership documents. Alternative forms of proof ownership including payment of real estate taxes, and certification by other family members, neighbors or local officials should be accepted.

RESPONSE: Comments noted and will be addressed as program implementation is designed.

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Owner-occupants of doubles

The housing stock of New Orleans includes many doubles which include a rental unit as well as the owner's residence. These people should not have to choose between the small rental property or the homeowner assistance program. Instead, a hybrid program should be developed that allows the homeowner to receive funding for the rental unit with the same rent restrictions that apply to the small landlord program. The number of owner-occupied units in New Orleans is especially high. Allowing owner-occupants of doubles to participate in the homeowner assistance program and receive adequate assistance to repair the rental unit would ensure that they are not penalized by the Plan. Another alternative would be to allow these types of homeowners to benefit from the homeowner program for both halves. The existing terms for eligibility required of residents who live in doubles is unclear and requires clarification even if no changes are made to the provisions.

RESPONSE: The valuation and damage calculations on doubles, in which the owner resides in one of the units, have been expanded to encompass the full structure, not just the single owner-occupied unit (see section 2.2 and footnote 4 on page 6).

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Requirements for receiving homeowner assistance

  • Forfeiture of property for failure to meet all the requirements for eligibility is too harsh a penalty.
  • The flood elevation requirements are unfair.
  • Requiring recipients of funding assistance, who may not be in control of their future living situation, to occupy house for three years is unfair.
  • An appeals process should be established for automated assessments.

RESPONSE: Any homeowner may appeal the decision related to eligibility, damage assessments, amount of assistance and grant offsets made by the program. Other comments noted.

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Requiring insurance coverage

Since many insurers refuse to underwrite new hazard policies, and premiums have been increasing, the availability of flood and hazard insurance is uncertain and the state should monitor the insurance market if is wants to require that homeowners carry policies.

RESPONSE: Comments noted.

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Conditions attached to payments for homeowners

Homeowners should be forced to sign a document that clearly outlines the property owner’s responsibility to expeditiously clear or develop the property, to maintain the property, and to pay property taxes as a condition of receiving payment. This type of agreement could be attached to land title and expire after at least ten years. One respondent thought a deadline should be set for homeowners to return or demolish their homes.

RESPONSE: Comments noted. See Section 2.3 for more information on the requirements to receive homeowner assistance.

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Financial benefits for homeowners to repair and rebuild

The assistance is not enough to cover losses, especially for individuals who had insurance and for low-income individuals. There should be tax credits at both the state and federal level for those who include mitigation efforts and projects in their rebuilding Plan.

The financial incentives to Repair/Rebuild uses a formula determining percent damage to the home that makes no sense. Under the usage in this Plan, percent damage is really a binary (0 percent or 100 percent) condition. Houses with less than 50 percent damage would not be eligible because they were not over 50 percent damaged. Houses with over 50 percent damage would be considered totaled and should be figured as 100 percent damaged. In the case of someone attempting to repair a house that was, for example, 90 percent damaged, the formula would pay them twice: once for the adjusted pre-storm value and again for the gap which would probably be greater than the cost to rebuild. One commenter thought that the formula to calculate funding assistance should simply be the cost of damage minus whatever insurance payouts were received.

There is no consideration for individuals who want to move their existing homes to a different location. Funding should also be set aside for individuals who want to invest in building a hurricane resistant home.

RESPONSE: Clarifications have been added to Section 2.4 that describe how the amount of assistance will be determined. Hazard mitigation funds are allocated in this program to invest in building more hurricane resistant homes.

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Determining the value of a home

The Plan asks for the assessed amount of the property before or after the storm, but in many cases, this assessment will be quite different. The value of lost homes should be determined using either the pre-storm appraisal value or the cost of replacement construction, whichever is higher. In addition, the value of homes could be determined using the assessed value. Others had these thoughts about determining the value of the home:

  • Homeowners should receive full funding for value of home pre-Katrina or $150,000 cap
  • Assessment of house value should also include devaluation of the home after neighborhood destruction
  • Pre-storm value should be determined based on a method for establishing market values that multiplies a home's assessed value by an equalization factor that is established for each neighborhood by comparing pre-Katrina sales prices to assessed values.
  • Benefit calculation should take into account the increased costs of construction The Plan should also include sales of homes prior to launch of the program to prevent a sales freeze.

RESPONSE: The Plan has been amended to clarify that the LRA expects that, while it cannot be finally established until the administering private contractor is selected, the method for determining pre-storm value will balance efficiency, fairness and equality. But most importantly, any homeowner believing that the damaged home's pre-storm value has been inaccurately established will have the opportunity to appeal on the basis of an acceptable alternative valuation. The Plan outlines what assistance may be available to the homeowners of homes whose homes have sold prior to the launch of the program in Section 2.6.

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Incentive Loan for Repair and Rebuilding

The terms and conditions of the incentive loans should be spelled out. The Plan is silent on the pricing and underwriting of the loan portion of the homeowner program and a clear commitment to subsidized rates is needed. Loan approval process cannot be limited to an automated credit score driven process. Additionally, comments from the Legislative Black Caucus, bankers and lenders, and low-income housing advocates made recommendations on the viability and structure of the incentive loan portion of assistance.

RESPONSE: Pursuant to many of these recommendations, the LRA determined that the Incentive Loan will include an allocation for soft second mortgages repayable on sale of the property. Additionally, it will leverage private capital to create larger pools of affordable loan investment capital through the use of mechanisms such as a loan loss guarantee pool and below market interest rates through rate reduction buy-down features.

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Financial benefits for homeowners who resettle

There was no consensus on the financial benefits provided to persons who sell their homes and move away. Some felt that the benefits to those who move away are too generous while others felt that the benefits to those who move away are not generous enough. The policy of giving homeowners the ability to sell to the state as long as they stay in Louisiana could negatively effect property values in communities hardest hit by Katrina. The Plan should explicitly state that if the state does buy the property, it will pay any existing liens on the property.

RESPONSE: Sections 2.4.3 and 2.5 were expanded to provide greater detail on the Redevelopment of Purchased Property.

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Financial benefits for persons who elect to sell their homes and move away

There was no consensus among comments on the financial benefits provided to persons who resettle. Some felt that the benefits to those who resettle are too generous while others felt that the benefits to those who resettle are not generous enough. The policy could negatively affect property values in affected areas. This provision is difficult to evaluate because no guidance is given on how much the lender will be asked to write off. The LRA, major investors, mortgage companies and the like should work closely to make sure that this program works effectively.

RESPONSE: Through The Road Home, the redevelopment of acquired property, and investment of CDBG funds in infrastructure and economic development, the State intends to restore and enhance property values in devastated communities. See Section 2.4.4 for more information on the sale of property.

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Redevelopment of purchased property

Management and redevelopment of property sold by homeowners to the state will require an entity focused on those responsibilities. To receive CDBG monies, the local jurisdiction must adopt a Plan that clearly establishes the rules for redevelopment in that area. One commenter thought that only local communities, not the State should make decisions about which areas to designate as no-rebuild zones. Another thought the government should not be involved at all in the land development as a way to minimize corruption. Instead, any property purchased by the government should be converted to green space or used for some other governmental purpose or sold at auction.

RESPONSE: The Plan makes it clear that the LRA will, working with state and local elected officials and civic leaders, assign responsibility to either a dedicated state entity or local redevelopment authorities for managing, packaging and redeveloping acquired land. In addition, pursuant to the recommendations of Congressman Baker, members of the Legislature, community advocacy organizations and others:

1. The land will be placed into commerce where it is safe to do so and turned into green space where safety requires; and

2. Redevelopment plans must match local community planning priorities and guidelines.

Another comment on Land Management and Redevelopment is that properties that are redeveloped through The Road Home should contribute to the availability of affordable housing.

RESPONSE: The LRA has endorsed the findings and recommendations of the American Institute of Architects and the American Planning Association planning conference held on behalf of the LRA in November 2005. Consistent with those recommendations, for properties that are acquired by the Homeowner Assistance Program or other land assembly programs for redevelopment, the State will insure that 25% of the properties are used for affordable housing according to HUD guidelines for the HOME program.

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Protecting homeowner equity

Proposed buyouts are grants to homeowners, but program is silent on the treatment of equity. There is concern that homeowner assistance may primarily go toward paying off an existing mortgage, rather than equitably or fairly replacing a homeowner's loss of equity.

RESPONSE: The LRA shares the concern regarding the loss of equity to the homeowner and has added the following language to the buyout and sale sections of the Action Plan: "a lien holder may be asked to write off a portion of the current outstanding principal balances of the loan or other lien, and to give consideration to potential lost equity of the homeowner."

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Viability of buyout option

Proposed assistance to homeowners is based on the damaged home's pre-storm value and may not satisfy existing lien holders. There is concern about the execution of buyouts by the state in these circumstances. If a home is declared unsafe for redevelopment, the state should fully compensate the homeowner. There is opposition to the provision to sell for 60 percent of the pre-storm value and support for making the repair and rebuilding of properties on original sites more attractive through increased incentives when compared to the sell/relocate option.

RESPONSE: In those cases, the homeowner will be treated as one that has accepted the buy/relocate option which would provide maximum assistance.

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Dispersing payments

The mortgage industry does not have standard terms for managing this type of funding and the LRA must make it clear to homeowners exactly how the funds are to be used and the conditions, if any, for disbursement. The most commonly cited recommendation was modeling the distribution of funds after the escrow approach currently used in the mortgage industry. Mortgage lenders call for check proceeds to be made payable to both the lender and the homeowner. One respondent suggested the money be provided to the homeowner in the form of construction loans. Administration of the funds also should provide that consumers are not required to advance any personal funds to a contractor prior to a mortgage company releasing initial funds for rebuilding and mortgage companies should be required to provide for approval of expenditures and contractors within a reasonable time. Funds can be disbursed to contractors as they demonstrate acceptable progress on the construction.

It was also mentioned that it may be difficult, given the terms and fees, to require deposit accounts to receive payments. This is one reason a loan escrow account, which allows the government to take advantage of the private sector, is a better approach. It ensures that work is completed according to contract and that payouts are made correctly versus forcing individuals to take responsibility. If none of these suggestions are taken then several changes need to be made to the allocation process. The current Plan does not specify with whom the deposit accounts will be established (here, mortgage lenders should be included). Clear guidelines should be established dictating the standards to be met before funds are disbursed and in cases where the homeowner decides not to rebuild, the Plan should ensure the outstanding balance due on the mortgage be repaid before disbursing the balance to the homeowner.

Existing real estate laws do not require a lien holder to reduce the amount owed by a debtor because of a decision by the state to discriminate against its citizens. Therefore, Section 2.4.4 should be modified to make clear that the lien holder is under no obligation to reduce debts. In addition, Section 2.4.2 should be modified to make clear that the phrase "repayment terms" refers to the repayment terms on the Incentive Loan and not the existing mortgage loan on the property.

RESPONSE: These implementation aspects of the Plan are still being discussed with stakeholders and lenders.

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Help with existing mortgages

  • Requests a set-aside of $100 million for the Louisiana Housing Finance Agency to offset the closing costs and supplement down payments towards a resident's acquisition of a new mortgage. This would be specifically targeted to essential personnel such as police and fire.
  • Opposes the requirement of lenders to write off a portion of the loan on properties that the State buys from residents but not opposed to the possibility of this being an option.
  • Recorded restrictive covenant is unnecessary and could lead to defects or clouds on title. Instead a contract should be signed that ensures that the borrower is legally bound to the restrictions and that the requirements are legally enforceable.
  • Freddie Mac expects that lenders will not be required to subrogate the lenders' interests in future insurance proceeds even though homeowners agree to subrogate claims for unpaid and outstanding insurance claims.
  • There is also support for the development of new products such as the silent mortgage and subsidized interest rate loans.
  • One commenter thought that assistance should be in the form of a second mortgage to be repaid if the terms are violated

RESPONSE: These implementation aspects of the Plan are still being discussed with stakeholders and lenders. Silent mortgages, second mortgages and subsidized interest rate loans have all been amended into the plan as options for the incentive loan.

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Creating a first-time homebuyer program

A first-time homebuyer assistance program has been proposed to help lifelong tenants become homeowners. The Bring New Orleans Back Commission proposed funding such a program for $288 million. Helping low-income residents become homeowners could be better achieved through low interest loans and down payment matching programs.

RESPONSE: In Section 3.4, the Plan states: "The LRA also proposes to allow variations of this program that will provide incentives, not only for repairing damaged rental properties, but converting them to owner-occupied housing," in reference to the Small Rental Property Repair Program.

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Housing Assistance Centers

The idea of Housing Assistance Centers was positively received and strongly encouraged in the comments submitted. One commenter felt there should be a homeowner's assistance center in every parish. Another commented that the centers are not helpful to individuals currently living outside of the state or outside the affected area and who lack the means to receive help from such a distance. For these reasons, satellite centers should be set up. Knowledgeable on-site representatives (with, perhaps, certification as a HUD certified Housing Counseling Agency) are needed to respond to cases and problems as they arise. The administration of these centers and related functions should be done through local agencies rather than state agencies. Free legal assistance should be offered at every Center and the Centers should also act as a referral resource for renters' needs as well. The inclusion of a homeowner counseling component to the CDBG recovery program is also suggested. Information on fair housing rights should also be distributed at these centers. Call centers should be set up to assist homeowners and renters.

RESPONSE: Comments noted. Assistance Centers will be directed by the selected management firm and staffed by contracted experts, which may include non-profit organizations specializing in providing advisory services to homeowners. These centers will also distribute information on fair housing rights and protections against housing discrimination.

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Enhancing resources devoted to building code enforcement

In addition to providing training and technical assistance on the new building codes it is imperative that local government officials, builders, developers, and architects receive training and technical assistance on the accessibility design and construction requirements of the Fair Housing Act. The cost of bringing homes to code compliance must be figured into calculation of assistance. One commenter believed the program is not focused enough on avoiding construction errors and promoting energy efficiency goals. A small amount of the funding should be allocated to the State's HERO program and subsidence damage should be included in the damages estimates. The Green Project and the Alliance for Affordable Energy should be encouraged to apply for grants and technical assistance is needed in hiring and training building code inspectors. The state should solicit a database of what residential construction details work and what does not work in Southern Louisiana. This information could be translated into publicly distributed fact sheets.

RESPONSE: Section 5.4 describes assistance provided for building code enforcement and meeting increased costs of code compliance. Section 9.1 clearly states that one of the State's goals is meeting all requirements pursuant to Fair Housing regulations. Training on meeting Fair Housing requirements will also be provided. The Plan provides for Incentive Loans designed to help people meet increased costs of repairing or rebuilding, including costs related to code compliance. For more information, see page 11 of the Plan. Section 9.4 discusses quality construction expectations for all housing developed under The Road Home, including green building techniques and energy efficiency. Energy Efficiency is addressed in Section 9.8 of the Plan: "The State will encourage energy efficiency through implementation of its new state housing codes that include provisions for energy efficient repairs and construction. Further, the State will provide technical assistance to local governments and private and for profit developers to educate them on sound practices for eradication of mold and use of mold resistant materials and construction techniques."

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Environmental concerns

Preliminary issues of site preparation and environmental review are left out of the Plan especially as they relate to removal and disposal of waste and debris in disaster areas, the clean up of hazardous waste from non-operational sites, and the need for the development of a communication strategy for distribution of environmental information. HUD regulations specifically include CDBG grants among the activities that trigger NEPA review and there appears to be no legal basis for concluding that an unrestricted grant program under CDBG is exempt or excluded from this review. There is the opportunity to develop Smart Growth neighborhoods.

RESPONSE: The Office of Community Development will be following all of the environmental regulations required by HUD (24 CFR 58) in the implementation of this program.

The LRA has endorsed the findings and recommendations of the American Institute of Architects and the American Planning Association planning conference held on behalf of the LRA in November 2005. Consistent with these recommendations, the LRA has embraced New Urbanism, a component of the Smart Growth philosophy. The LRA will work with state agencies and local governments to ensure that these issues are addressed as the program is implemented.

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The role of non-profits

Comments are included elsewhere concerning non-profits but generally speaking, the Plan should include the hundreds of local non-profit organizations that are active in recovery as part of the implementation plan. Non-profits are vital to the recovery and rebuilding phase.

RESPONSE: Section 5.3 of the Plan addresses the assistance available to non-profits through the Faith Based and Community-Based Housing Recovery Programs.

Through the Solicitation for Offers, Assistance Centers will be directed by the selected management firm and staffed by contracted experts, which may include non-profit organizations specializing in providing advisory and outreach services to homeowners. See Section 2.8 for more information.

Section 4 of the Plan addresses the needs of the homeless community and the organizations that focus on the homeless. Section 4 also outlines the assistance that will be available to these organizations.

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Implementation of the Plan

While the Plan (Section 9.2) indicates that national planning experts are to work in partnership with local planners, this is not occurring. Local communities should be able to decide what planning expertise they want and who they want and it should be funded by LRA. Long term recovery planning should be centered at the local universities.

RESPONSE: Comment noted.

The Plan does not assure that the funds will be used to assure the creation of jobs, and the provision of safe conditions on all worksites as contractors engage in rehabilitation, clean up and reconstruction.

RESPONSE: The Solicitation for Offers emphasizes the hiring of Louisiana citizens. HUD requires that all CDBG projects comply with Section 3 regulations, and the Davis-Bacon and related Acts.

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Program administration

  • Aggressive public outreach is required

RESPONSE: The firm hired via the Solicitation for Offers shall also provide community outreach to low and moderate income citizens to apprise them of the recovery assistance programs available to them, including but not limited to housing programs and the benefits of the Section 3 provisions.

  • The comment period was too short and should be reopened.

RESPONSE: Comment noted.

  • The location of public hearings should be posted on the website.

RESPONSE: Location and times of public hearings were posted on the LRA website.

  • Several improvements could be made to the online Road Home Registry Form. There is currently no "landowner only" category for those that owned property with no house on it.

RESPONSE: Comment noted.

  • Clarification is needed to establish how the programs will be administered, particularly regarding underwriting standards that may adversely impact low-income residents.

RESPONSE: Clarification on these issues will be determined in conjunction with the management firm hired via the Solicitation for Offers.

  • The Plan does not provide details as to the number of residents that will benefit from these proposals.

RESPONSE: The Plan provides detailed figures on the beneficiaries of each program.

  • Standards of transparency and substantial public participation should be a condition for receiving planning and technical assistance grants from the LRA and are needed at both the local and state level

RESPONSE: Comments noted.

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Rental funding levels and unit targets

  • Rental housing redevelopment activities are under funded.
  • Increase the amount of funds allocated to the rental program and increase the number of affordable rental units repaired or rebuilt and those targeted directly at the rental housing for extremely low and very low income people
  • While 41% (84,000) of the major and damaged residences were rental units only 15% of the funds are proposed for rental programs. This is unconscionable and should be rectified.
  • The under funding of rental housing in the Plan is likely to hurt New Orleans, where proportionately fewer of the damaged units were owned, the hardest.
  • At a minimum, the former target of 9,000 affordable units should be restored. It is unclear if this was intentional or an error because two different dollar amounts are listed as the "fully funded" level for the piggyback program.
  • Affordability timelines for rental units developed under the LIHTC piggyback program should be out to twenty years.

RESPONSE: The LRA reinforced, in all the rental redevelopment programs, the expectation that CDBG assistance will be focused on achieving the twin goals of deep affordability and the restoration of rental housing stock in the context of mixed-income communities. The current expectation of the LRA is that affordability will extend to 20 years. Housing program consultants are exploring the feasibility of this extension. Regarding the underfunding of the rental programs, the LRA feels other non-CDBG resources are available to address the needs for restoring the rental stock namely the GO Zone LIHTC program. The Plan works to leverage these sources of revenue with its CDBG funds. The other comments have been noted.

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Rental targeting

  • All CDBG funding for rental property redevelopment should be directed to the areas with the highest rental property loss.
  • Direct support workers should be targeted for assistance
  • Due to limited dollars allocated to the small rental property program, they should only be directed to landlords who agree to offer below market rate rents.
  • Plan fails to address the status of federally assisted housing stock.
  • All temporary rental assistance programs should be shifted to HUD’s Disaster Voucher Program (DVP)
  • Reallocate requested Section 8 voucher funding to make tax credit funded housing affordable to poor households
  • The incentive scale does not spread the incentives evenly enough across the income tiers. The higher incentives should not be concentrated so much on the lower income tiers and the $390 million under the CDBG Piggyback should be moved to the Flexible Incentives category of funding. A disproportionate share of funds is directed to the owner occupied houses in the Plan and is relatively neglectful of the rental housing. Using figures supplied by HUD, the Plan addresses only 12.5% of the extremely low income renter need. If the program is fully funded at $10.5 billion, only 3.75 % of that is targeted directly at the rental housing for extremely low and very low income people, assuring that these citizens will have the fewest housing opportunities and the least chance of returning home.
  • Developers should be required to have at least 25% of units affordable to extremely low income people in all LIHTC projects.
  • The Plan should increase funding for homeless supports, clarify the process to access funds, demonstrate a commitment to work with HUD and the continuums of care on a comprehensive strategy to address the need for increased homeless housing and services. The Plan and the LRA and LHFA should encourage developers to set-aside units for the homeless and provide direct technical assistance to providers to develop their own units.

RESPONSE: The LRA established that the majority of rental redevelopment funding will be allocated to the most affected parishes based on the estimated damage to rental units.

The proposed $25.9 million for homeless supports was realigned to support the State's goal to immediately restore and expand capacity in hurricane impacted areas and provide permanent supportive housing and assistance for persons and families who are homeless and persons at-risk of becoming homeless who are low wage workers, unemployed, victims of domestic violence, low-income seniors, and/or low-income persons with any type of substantial disability (including physical or sensory disability, cognitive disability, chronic health problems, mental illness, or addictive disorders).

Local homeless advocates, housing advocates and other members of the public consistently articulated the need for priorities for this funding. Consensus emerged around a handful of priorities beginning with repair of damaged shelters, transitional housing, and permanent supportive housing.

Additional identified priorities included assistance to construct new permanent supportive housing, homeless prevention assistance, and investments in housing and employment search services. The current Plan reflects these suggested priorities in Section 4 primarily.

Additionally, public comment requested a broader definition of those at-risk of becoming homeless. This section was expanded to include low wage workers, unemployed, victims of domestic violence, low-income seniors, and/or low-income persons with any type of substantial disability (including physical or sensory disability, chronic health problems, cognitive disability, mental illness or addictive disorder).

Finally, public comment requested consideration of the needs of the newly homeless. Depending on each individual's circumstances, this population could be provided with supportive services, home modifications, or assistance with rent to enable an individual to return home.

For further information please refer to Section 4.

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Mixed income rentals

  • CDBG funding for rental development may go toward building market-rate units that do not need assistance
  • The Plan, as currently written, does not recognize the high cost of mixed-income housing construction in New Orleans, especially in areas that did not flood. In addition, the Plan seeks to channel CDBG funds on a per unit formula based on the amount of very low income families served, not the mixed-income community as a whole, based upon a belief that the CDBG funds must act as rental subsidies in order to target these very low family income levels. Unique challenges exist in creating high quality mixed-income multi-family apartments, including higher operating costs, discounted market rents in order to attract higher-income tenants, high cost of attractive land, and escalating construction costs. The combination of all these factors, require CDBG funding per mixed-income unit of up to approximately $75,000. Recommendations include clearly defining a mixed-income community (suggest using LHFA's definition) and setting aside 40% of mixed income units for households below 60%AMI, half of which would be restricted at 40% AMI (making them eligible for Section 8 assistance).
  • Mixed income housing goals should be integrated with HUD and HOPE funds

RESPONSE: The LRA reinforced, in all the rental redevelopment programs, the expectation that CDBG assistance will be focused on achieving the twin goals of deep affordability and the restoration of rental housing stock in the context of mixed-income communities. The current expectation of the LRA is that affordability will extend to 20 years. Housing program consultants are exploring the feasibility of this extension.

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Leveraging funds for rentals

  • CDBG dollars may be stretched more efficiently to expand the supply of affordable rental properties by letting bidders request the per-unit subsidy they need. This could be accomplished by combining other federal funding sources with industry practices.
  • The availability of other funds such as the CDBG funding through the New Orleans Housing Authority needs to be acknowledged and leveraged in the Plan.

RESPONSE: The LRA worked with housing development experts and the commenters to convert the CDBG Piggyback subsidies to be awarded on a competitive basis. That is, rather than set a certain amount of subsidy per unit for certain affordability levels, developers must request CDBG assistance for each unit, and the lowest requests will receive priority in allocation of funds.

Applicants for rental funds will score higher on their applications if they find alternate sources of funding.

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Program income

  • Program income should go back to the state housing trust fund to ensure increased production of affordable housing.
  • Set aside all loan repayments from the Small Rental Property Repair Program to the state housing trust fund.

RESPONSE: The LRA recognizes the potential for a significant return on investment in property redevelopment, and we have added to the Action Plan amendment a commitment to recycle these proceeds into further housing restoration, infrastructure enhancements, and economic development activities designed to help recreate strong communities which are closely tied to transit, jobs, and public services. In addition, the LRA is supporting and coordinating the resurrection of whole communities through direct investment of CDBG resources in state and local infrastructure projects and economic development.

See Section 9.2 of the Plan for a detailed description of which funds will be transferred to affordable housing activities.

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Project monitoring for rentals

  • Must be robust reporting, monitoring and compliance to ensure that low to moderate income citizens are benefited by these programs.

RESPONSE: See Section 9.5 for information on the State's activities with regard to monitoring.

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Fair housing for rentals

  • The Plan must reexamine the new impediments to fair housing that have arisen after the storms and must address them in the Plan.
  • Fair housing goals are notably absent from the Plan. Must add language to the Plan that explicitly makes the achievement of fair housing a goal for the protected classes: race, color, religion, sex, national origin or familial status.
  • Informing homeowners of their rights to fair housing should be a goal that the Housing Assistance Center must pursue.
  • Provide a clear rental registration process and make it available for public comment.
  • Make racial and ethnic integration and integrated housing for those with disabilities a goal of the Plan.

RESPONSE: The Plan was amended to include Section 9.1: "Fair housing must be a goal of the programs described in The Road Home Housing Program. If a homeowner or renter (from a unit developed through the benefits of this program) believes that he or she has been the victim of housing discrimination and suspects that he or she has been treated unfairly because of Race, Color, Religion, Sex, Age, Familial Status, National Origin, Marital Status, or Disability, he or she may file a complaint of discrimination with the Louisiana Attorney General's Office, Louisiana Public Protection Division of the US Department of Housing and Urban Development Fair Housing Division."

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Small landlord rental program

  • Funding is needed for rental property owners who need aid quickly to do repairs to existing units.
  • Quickly dispersing funding to landlords of the estimated 20,000 vacant apartments in need of relatively modest repairs would quickly revive the housing stock
  • The Small Rental Property Repair Program is significantly over funded; funding could be reduced from $869 million to about $400 million; savings can be used to increase the total number of affordable rental units, supportive housing funding, and support for community-based and non-profit organizations. The program should be restructured to assure full financing of repair/rebuilding costs to take advantage of the SBA Disaster Loan Program, and to avoid predatory lending
  • Under the Small Rental Property Repair Program, a law similar to one that was passed by the European Parliament three and half years ago called the “European Union Directive on the Energy Performance of Buildings,” should be passed.
  • The Small Rental Owners Recovery Plan should include the following features: rental owners living inside flood plain receive 60% of cost of repair (minus insurance); rental owners living outside flood plain receive 80% of cost of repair (minus insurance); low rate 10 year term loan offered by increasing the funding available; loan not to exceed 80% of pre-Katrina value; and match CBDG funds 1 to 4 with LHFA low rate bonds.
  • 2 of the 3 priorities/selection criteria favor landlords in the best financial situation

RESPONSE: The details of implementation and administration are being developed currently based on these comments and others. The goals of these programs are clearly outlined in Section 3.

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Housing development loan fund

The loan fund should be competitively allocated by making the amount of public subsidy a factor in awarding grants and contracts. The loan fund should prioritize affordable housing and make funds available to non-profit developers. For example, owners should be allowed to sell their homes to a non-profit who will sell to qualified low-income buyers. This type of campaign would require aggressive outreach. One respondent suggested allocating $50 million to this fund. Program income generated from this fund and from other loan programs in this Plan should be allocated to the State Housing Trust Fund.

RESPONSE: Comment noted. See Section 5.1 for additions made on the basis of these comments.

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Land assembly initiative

The funding allocated to the Land Assembly Initiative is not enough to create a viable program. The bulk of the funding for the Piggyback rental program should be moved into the Land Assembly Initiative. At least 10 times the $2.0 million recommended should be allocated. The use of eminent domain authority is absolutely essential and must be a part of the Plan.

RESPONSE: Comment noted.

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Restoration of homeless supports and housing

More resources should be devoted to long-term housing needs to prevent homelessness and fewer resources to temporary shelters. Comments to ensure effective implementation of the State's Supportive Housing Plan include:

  • Funding for 5,000 units of Permanent Supportive Housing must be assured in order to meet the need.
  • New funding from HUD's rental subsidy programs to ensure that Supportive Housing is affordable to the people who need it most
  • Develop an organizational structure of relevant state agencies partnering with state homeless Continuums of Care and nonprofit disability agencies so that the most vulnerable received priority and all funding is appropriately set aside for programs
  • Link the Small Rental Property Repair program with the rental subsidy programs to ensure immediate development of small-scale Permanent Supportive Housing
  • The $26 million should be prioritized as follows: repair of existing Continuum of Care housing, assistance to construct new Permanent Supportive Housing, homelessness prevention assistance activities, and creation and expansion of transitional housing, housing search and employment search services.

RESPONSE: Local homeless advocates, housing advocates and other members of the public consistently articulated the need for priorities for this funding. Consensus emerged around a handful of priorities beginning with repair of damaged shelters, transitional housing, and permanent supportive housing.

Additional identified priorities included assistance to construct new permanent supportive housing, homeless prevention assistance, and investments in housing and employment search services. The current Plan reflects these suggested priorities. Refer to Section 4 of the Plan for a description of the proposed activities.

Additionally, public comment requested a broader definition of those at-risk of becoming homeless. This section was expanded to include low wage workers, unemployed, victims of domestic violence, low-income seniors, and/or low-income persons with any type of substantial disability (including physical or sensory disability, chronic health problems, cognitive disability, mental illness or addictive disorder). Section 3.2 outlines a funding set-aside for supportive services for these populations allowing an estimated 3,000 units to receive supportive services under the fully funded program.

Finally, public comment requested consideration of the needs of the newly homeless. Depending on each individual's circumstances, this population could be provided with supportive services, home modifications, or assistance with rent to enable an individual to return home.

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Developer incentives

Incentives should be provided to developers that succeed in leveraging their own equity or private sector capital. Gentilly Public, a cooperative housing alternative that serves the needs of low income New Orleans residents, suggests that a cooperative housing arrangement is necessary in New Orleans and allows residents to self-manage their living space and surrounding green space.

RESPONSE: Comments noted.

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