Obama administration fell short in rebuilding rental housing, speeding up Road Home awards

The Lens has partnered with PolitiFact for the 10th anniversary of Hurricane Katrina to see if President Barack Obama has followed through on his campaign promises about the storm and the city of New Orleans.

Pledge: Restore housing in New Orleans

Will work with the state to establish a goal for approving all Road Home applications within two months…Will also work to increase the supply of rental property, which is particularly important in New Orleans where 57 percent of pre-Katrina residents were renters.

Ruling: Compromise

The $9.7 billion Road Home Homeowner Assistance Program, which used federal funds to assist homeowners whose properties were damaged after hurricanes Katrina and Rita, can at this late point be called a success.

But that’s because so much time has passed, not because the program speeded up grants. Despite President Barack Obama’s promise, the backlog was not eliminated in two months.

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By the end of January 2012, three years after Obama took office, about 400 checks still hadn’t been cut — more than four years after the application deadline. About 60 remained at the end of his first term.

Now, nearly every eligible homeowner who applied for a Road Home grant has received one, according to the state agency that runs the program. All but 14 of the 130,053 eligible homeowners have received a grant. The average award: about $69,000.

That doesn’t mean it all went smoothly.

This pledge specifically deals with the speed of approving grants, so we won’t tell you about the unscrupulous contractors, the lenders who demanded mortgage payments, the fact that awards were often too small to cover repairs, the more than $100 million still unspent, the lawsuit that HUD settled for discriminating against low-income, black homeowners, the audit that found $1 billion went to people who may have broken the rules, or the threatening letters in which the state demanded repayment.

Despite all that, Road Home is “the reason that tens of thousands of property owners are back in homes that are newly renovated and, in many cases, safer than before,” wrote WWL-TV reporter David Hammer.

Rental unit rebuilding, however, hasn’t been quite as successful. The programs we looked at have fallen short of their goals.

A 2007 report by the Brookings Institution estimated that 108,000 rental units were flooded throughout the New Orleans metropolitan area after Katrina.

The U.S. Department of Housing and Urban Development awarded $13.4 billion in Community Development Block Grants for post-Katrina recovery. Though HUD allocated the money under the Bush administration, much of it was spent on Obama’s watch.

Most of that money went to the Road Home homeowner assistance program.

About $550 million was budgeted statewide to help rebuild as many as 33,000 units in large apartment complexes, including up to 27,000 units for low-income tenants. About $514 million has been spent, but that’s resulted in far fewer units than planned: 7,500, including 4,400 considered affordable.

The state budgeted $869 million in federal funds to rebuild 18,000 rental units in houses and small apartment buildings throughout Louisiana. Of those, 12,000 were supposed to be for low-income tenants. But much of that money was moved into other recovery programs. The state has handed out about $434 million to rehabilitate about 8,600 units, of which 7,600 are affordable.

The small rental program, like Road Home, has come under fire for misspending, fraud and alleged noncompliance. State auditors recently said about $90 million has not been fully accounted for.

Then there’s public housing. Since Katrina, there are fewer traditional public-housing units in New Orleans, but more Section 8 vouchers.

In August 2005, 5,146 families lived in public housing in the city, including about 2,900 in four complexes dubbed the “Big Four.”

After the storm, the Housing Authority of New Orleans kept residents from returning home and ramped up a plan to demolish the complexes and replace them with mixed-income developments.

The agency now has about 2,000 public housing units, with about 600 more planned, HANO spokeswoman Lesley Thomas said. That’s less than the 3,200 replacement public housing units the housing agency planned when the City Council approved the demolitions.

The number of Section 8 affordable housing vouchers in the city has increased from 8,400 to about 17,800 between 2005 and today. There are more than 13,000 families on the housing agency’s Section 8 waiting list, which has been closed since 2009. On the public housing waiting list: 5,000 families.

Meanwhile, New Orleans is one of the cities in the U.S. where rents are rising faster than incomes. The Data Center, a New Orleans think tank, found that 51 percent of New Orleans renters spend 35 percent or more of their gross pay on housing. And 37 percent spend more than half of their gross pay on housing.

This is a tough pledge to evaluate. The feds did give $13.4 billion to Louisianans for housing and infrastructure relief, but that decision was made under the Bush administration.

Although Road Home finally cleared its backlog, it did not do so within two months as Obama promised.

As for rental housing, the Obama administration has funded the construction of thousands of affordable rental units. But the program has built many fewer units than planned.

Under current plans, there will be half as many public housing units in New Orleans as before the storm, although the administration has doubled the number of Section 8 vouchers for residents.

When you consider how much people in New Orleans are paying for rent, and the thousands of people on waiting lists for public housing and Section 8 vouchers, it’s clear that the demand for rental property, especially affordable housing, has not been met.

The Obama administration has tried to meet the terms of this promise, but the results have fallen short. So we rate this a Compromise.