Becky Houtman

Who really holds the keys?

I had to wonder whether it was with deliberate irony that yesterday’s Times Picayune placed the article N.O.’s plan for rebuilding passes Muster with LRA immediately beneath LRA feeds Road Home kitty, with it’s handy inset showing of the approximately $1 billion the state is adding to the Road Home program, $577.5 million is coming from CDBG funds previously slated for infrastructure repairs, and another $50 million was “carved out of other recovery spending areas” by the LRA. (The amount to be doled out for New Orleans rebuilding is $117 million – of the $1.1 billion that “officials” (whoever they are these days) say we need.) Oh, and that doesn’t count the $513 million the LRA now has access to since the 10% match of federal funds requirement was waived – $513 million the LRA had earmarked for parish recovery projects, of which New Orleans was to receive $324 million – so they can sit on it in case the state needs to ante up even more cash to help close the Road Home gap.

Today’s TP editorial, A good faith effort, claims that “repairs to storm-damaged state buildings and construction of a replacement for Charity Hospital in New Orleans,” which were to be paid out of the $577.5 million would be paid out of the state’s budget, but forgive me if I’m skeptical.

What really infuriates me is the nearly blind eye being turned to the source of a sizable chunk of the Road Home gap: insurance underpayment, to the estimate tune of $2.7 billion. To be fair, in May Blanco and Walter Leger recommended that the state pursue claims on the behalf of cheated policyholders – after all, what hope can individuals have suing the colossi piecemeal (the insurance industry is the only other field besides Major League Baseball exempt from antitrust regulation, making the combined insurers a pretty daunting monolith). But it looks like, yet again, insurers have passed the buck to taxpayers, and worse, the state and federal governments have chosen to bleed the programs that are underfunded already. Big surprise.

This is yet another instance of why the entire state and nation should be taking heed of Louisiana’s and Mississippi’s situation. Insurers – property, health, auto, etc. – are as consequence free everywhere as they are here. The number of ways in which the system is scandalously broken is too great for me to digest, but PLEASE check out the Insurance Transparency Project for much more – inspired by, but not exclusive to, Katrina’s insurance aftermath.

Mockingbird, by Bob Hines, United States Fish and Wildlife Service

“The process on how damage percentages is determined is the estimate of the cost of repair compared to the replacement cost of the home, if you had to build it from scratch,” [Robert Evans, Allied American‘s chief operating officer] said. – The Mississippi Press, 8/14/2006

With all the recent fuss over “rebuilding” vs “compensation” regarding Road Home payments and CDBG regulations, I was surprised to hear yesterday that Phase II of Mississippi’s Homeowner Assistance Program (HAP) is basing its grant calculations on cost to rebuild.

I wrote about the “worst of both worlds” scenario Louisiana’s Road Home Program was facing the other day at Think New Orleans: in a nutshell, the LRA was allegedly told when designing the RHP that they had to cap awards at the pre-Katrina appraised value of the home even if the estimated cost to repair/rebuild was greater, because basing awards on rebuilding costs would make it, aptly enough, a “rebuilding program” and thereby trigger torrents of onerous requirements and regulations. And just lately, HUD “discovered” that the method of Road Home payments constituted a “rebuilding program” as well – maximum burden for the minimum award.

Mississippi’s HAP is using a phased approach: Phase I was for homeowners with homeowners insurance (although not necessarily flood insurance) living outside the pre-Katrina FEMA designated flood zone. Like the Road Home, it also had an ultimate $150,000 cap, and beneath that cap, the upper limit was based on the value of the home – in this case, the insured value of the home, plus 35%. Meaning that, should the damage estimate, determined by the method described above, exceed the insured value of the home (or the appraised value, for that matter), a higher award could be calculated. What exactly is being “compensated” here, that’s not compensable in Louisiana?

Phase II is directed at homeowners with a household income beneath 120% AMI with Hurricane Katrina storm surge damage. The HUD-approved action plan makes no mention of insured or appraised value. This award is capped at $100,000, but up to that amount, the award is based exclusively on the official damage assessment – insured homeowners receiving 100% of the estimate, uninsured receiving 70%. And yet, “In consultation with HUD, and due to the nature and design of the Homeowner Assistance Grant Program, the State has determined through its environmental review that project level actions are categorically excluded and not subject to related laws for Phase II.” No NEPA.

I don’t begrudge Mississippians any additional money they may be awarded via their damage assessments; I also wouldn’t be surprised if the assessments were erratic or out of sync with today’s real costs of rebuilding, as the rest of the Mississippi Press article cited above suggests. But I’d really like to understand why Louisiana can’t have similar latitude for the Road Home. Granted, there are a number of other differences between the programs, some of which may influence which requirements might apply, but on their faces, both states’ programs have very explicit rebuilding components, sometimes favoring rebuilding over relocating, and as far as I can tell, the only difference between “rebuilding” (i.e. triggers-multitudes-of-onerous-regulations) and “compensation” (i.e. you-might-get-some-money-in-this-lifetime) is smoke and mirrors.

Was the LRA Housing Committee really too thick to rephrase their “compensation” package to permit greater consideration of rebuilding costs? Is there some secret catch to Mississippi’s plan that would make its rebuilding-cost “compensatory” provisions unfavorable to Louisianans somehow? Or does the fact that the nebulous nature of CDBGs requires negotiating with HUD, currently headed by Alphonso “heck of a crony” Jackson, mean that our marginally-Blue State will be held to a different standard no matter what we do? Or is it some combintion of all three?

Or am I completely missing the point?

The eldest went first into the room where the slipper was, and wanted to try it on, and the mother stood by. But her great toe could not go into it, and the shoe was altogether much too small for her. Then the mother gave her a knife, and said, ‘Never mind, cut it off; when you are queen you will not care about toes; you will not want to walk.’ So the silly girl cut off her great toe, and thus squeezed on the shoe, and went to the king’s son. – Ashputtel (Cinderella), Grimm’s Fairy Tales

The F-word is in the air again. Or rather, it’s conspicuously not in the air, since the BNOB taught everyone what a dirty word footprint could be. Now, the buzz is about unrestrained rebuilding in “risky” areas, thanks in particular to the Washington Post’s New Orleans Repeats Mistakes as it Rebuilds article yesterday. The blogosphere is once again awash in “why are we letting those idiots spend our to rebuild below sea level?” rants (note, though, mominem’s lonely voice of dissent ranked on the first page of Google’s blogsearch). Oddly enough, the Post’s previous day’s story on Sacramento’s potentially catastrophic flood risk, observing that (surprise) it’s levees are substandard, didn’t warrant much blogland comment that I’ve been able to find.

I wouldn’t give the footprint topic the time of day if it were confined to knee-jerk New Orleans haters who think that our massive losses are costing them somehow, as if some enormous Save New Orleans tax were being levied on them personally. But I’ve heard the variations on the “you have to shrink the footprint” line from too many friends and relatives out of town – people who sincerely love New Orleans, visit here, visit more than just the French Quarter and Jazz Fest Fairgrounds, and want the city to survive almost as desperately as we residents do – to brush it off.

After all, it does seem eminently logical both to consolidate the population for the sake of providing services, and to run like hell from the worst-flooded areas. It’s true that we can’t expect to come back to pre-Katrina population density any time soon, if ever (and no one here wants their neighborhood to suffer the jack-o-lantern fate, or be surrounded by blight and vacant lots), and it’s completely fair to ask why one should rebuild in the deepest flood-risk zones. The trouble is, I’ve never seen the inevitable, costly consequences of a smaller footprint adequately addressed, even if race and class inequities could be somehow swept aside. And it does cost. It’s not an abstracted matter of so many puzzle pieces to be shuffled around, or cars in a valet parking lot. It’s a question of where real people can live, and how we can afford to make decent housing available in a timely manner.

Even the UNOP’s Community Congress II acknowledged that one of the “cons” of the scenario of requiring people to resettle in ill-defined “clusters” was the greater cost than letting people rebuild where they lived before. If you think the Road Home program is falling short now, just imagine when homeowners are forced to take the buyout offer rather than renovate/rebuild, and the real costs of relocation come to the fore. I’m a little surprised that the Uniform Relocation Assistance and Real Property Acquisition Policies Act hasn’t been invoked yet, given that it’s a federal project that deprived the majority of New Orleans of their homes, but you can be sure that if or when people are denied the option to rebuild, the meaning and value of “comparable replacement dwelling” in the post-Katrina real estate market will be a magma-hot flashpoint.

Plenty of pundits (including Recovery Chief Ed Blakely, cited in the Post article) have proposed some vague sort of “lot swap” between badly flooded homeowners who want to return and scarcely flooded homeowners who have left, but would someone please show me these high-ground lots ready and waiting to be swapped? I know there are lots of people with high-ground properties who have relocated to other cities due to work or disgust, but which are the ones who aren’t seeking their newly boosted market value? What do we honestly have to offer people who are willing to sacrifice their immediate sense of home: their house or apartment, for their general sense of home: New Orleans? (Incidentally, the Post article notes that “Officials in St. Bernard Parish … rejected closing off a particularly hard-hit 36-block section of Chalmette because they could not afford to buy out property owners.” That doesn’t influence their conclusion that we’re Repeating Mistakes as We Rebuild, though.)

Another glaring omission from the footprint argument is the acknowledgement that ours was an unnatural disaster, and that that fact figures significantly into both what risk property owners and dwellers thought they were assuming before Katrina, and what risk we’re facing after. The Post does acknowledges that “the levees … proved catastrophically fallible,” but doesn’t factor in what every local now knows – that our degree of risk has far less to do with elevation than with the x-factor of where the next breaches might occur. Given that so far, the levees have been repaired mainly where they breached, and that miles of levees are still as substandard as before, everywhere but the repaired breaches will be under the same strain as before should a Katrina-like event happen again, with no telling which spots might give way first. And heaven forbid that the next threat should come via the river rather than canals to the lake, because then the highest, “safest” ground will be obliterated. We just can’t evaluate true flood risk while it’s more contingent on man-made negligence than natural vulnerability.

And encompassing both the population-consolidation issue and the flood-risk issue is the self-fulfilling prophecy dilemma. Repopulation is a matter of both just compensation to those who lost their homes and everything in them, and prevention of becoming a theme-park rather than a city. People weren’t stupid or foolhardy to choose to live and work in New Orleans, any more than people are stupid or foolhardy to live in Sacramento, San Francisco, or any coast, riverside, lakeside, barrier island, earthquake zone, tornado-swept prairie, blizzard, or avalanche territory. Offering and encouraging the option of return to the people who were flooded out is a moral imperative as well as an imperative to preserve the viability – not just of neighborhoods – but of the city. We need our population to back our deserved political clout at the state and federal level, and to remain a diverse city – racially, industrially, and economically. To retreat to the Sliver by the River is to cement our past history of inequality into an even more go-nowhere status as a low-wage, low-opportunity tourism town; a barely-get-by-ism that we will deserve to lose to another hurricane if we’re the ones who let it happen.

There’s no Fairy Godmother to tell us how to deal with flood risk and population shrinkage, but more importantly, there’s no Prince Charming who will take care of everything if we only make ourselves fit someone’s idea of what size slipper we should wear. We have excruciating decisions to make, but no one is in a position to tell us which toes can do without, any more than the knee-jerk New Orleans haters can say that the nation can do without us – our neighborhoods are no more socio-economic islands than we are as a city or a region. Nor can anyone tell us that sacrificing the 9th Ward, Lakeview, Hollygrove, Gert Town, or any of the flooded neighborhoods will make us a Queen who won’t need or want to walk. We’ll be crying “let them eat bread pudding” all the way to the guillotine if it ever comes to that.

I first read the BGR’s report on Road Home’s rental housing a couple weeks ago, and it really got under my skin. And now it’s been cited in yesterday’s Times-Picayune front page article on the fate of public housing and the directions being taken toward affordable housing in New Orleans, it’s crawling out from where it’s been festering.

“Although ostensibly a recovery program, the Road Home rental program is at heart an affordable housing program.”
The Road Home Rental Housing Program: Consequences for New Orleans
Bureau of Governmental Research

First of all, it’s been my understanding that HUD’s Community Development Block Grant program is intended, in their own words “principally for low- and moderate-income persons,” so the LRA couldn’t not focus primarily on affordable housing even if it wanted to. Unaffordable housing ought to be able to take care of itself, as the BGR itself aptly pointed out back on August 24, 2005, in that other lifetime when Katrina was just a newly named tropical storm preparing to swat Florida.

Second, the spirit of alarm (gasp! an it’s an affordable housing program? in the Orange County I mean, Orleans Parish, recovery effort?) is telling. The BGR recognizes that the many legacies of poverty have hurt our city and citizens, but their high-minded, “objective,” “pure facts,” “no spin” (is there ever a clearer warning to keep your seatbelt fastened and your arms inside the ride until the Tilt-A-Whirl comes to a complete stop?) conclusion is that the remedy is to remove the poor, or a sizable number of them anyway. And being the ever-thorough BGR, they detail at great length their endorsement of the best means to accomplish this feat – move over Voodoo, there’s a new sympathetic magic in town: Feng Shui.

The BGR is probably too “advanced” to believe in elemental natures like Air, Fire, and Water, but that doesn’t mean they’re above the Move Your Poor, Change Your Life strategy of urban self-improvement which is so popular these days (they have plenty of company in HUD, and even the LRA to some extent, however harshly the BGR takes them to task).

It begins with skimming the excess: Poverty doesn’t have to go away entirely – you still have to take the yin with the yang, the dishwashers with the doyennes – but

“The geographic allocation formula [ i.e. - dispensing funds based on the percentage of damage] would continue to concentrate the region’s low income subsidized housing in New Orleans.”

That’s right, the BGR is so confident that the New Feng Shui will have us manifesting effortlessly that they’d rather New Orleans get less funding. Granted, they’re not without paternalistic concern for the less well-off: “So much of the money and jobs have gone to suburbs,” BGR President Janet Howard told the Times-Pic. We should “help lower-income people relocate closer to jobs that would help them climb the economic ladder.” Go off to a better life in other parishes (of course, not St. Bernard – you’re not welcome there unless you’re a blood relative). Don’t worry about us market-raters – we’ll soldier on alone, here in this economically stagnant, jobless hell hole.

After skimming the excess comes deconcentration. Too much of the Element in one place is just no good, however benign it may be in small amounts. Sure, there’s research on correllations between high concentrations of poverty and problems like crime and teenage pregnacy (although the correllations vary more from place to place than you might guess from casual mentions), but causation is far from proven, and doesn’t appear to be getting any closer. Nevertheless, Mixed-Income is a rallying cry far and wide, despite results that at their rosy-lensed, optimistic best have been, well, mixed (and whose relative successes aren’t necessarily measured by the lives of the “deconcentrated,” but by the real estate).

The mixed income strategy (or strategies, since the implementations have been all over the map regarding what sort of mixes, what income levels, ratios, building styles, etc., which makes the BGR report’s repeated conjuring of a “classic mixed income development” especially baffling) is least effective where it’s most predicated on trickle-down socialization. Did I say move over Voodoo? Maybe I spoke too soon – the one thing that can be said for supply-side economics is that we can all agree what side the supply is on. The notion that the above-AMI crowd is in exclusive possession of morals, work ethic, and all around upright behavior is rather less certain. If only being evil really did make you poor… Curiously, one of the BGR report’s harshest criticisms of the LRA and LHFA is that it has “attempted to achieve predetermined social outcomes” with this program by backing off somewhat from their original plan to engineer mixed income developments with high market-rate to low-income ratios.

What’s especially disturbing about this report is that the BGR doesn’t even believe it’s own rhetoric. Would any “research” organization worth its salt concede this: “Limited evidence exists to support the theoretical benefits of mixed income developments,” and still proceed? Would the weasel-worded “Many policy makers and scholars have expressed their preference” pass professional muster anywhere else? (The answer is sadly, yes, all too often, but it shouldn’t anyway.) No matter – the point isn’t to lift individuals out of poverty, it’s to reduce the Element. Why? Lest we “Impede the Growth of the Tax Base.”

The BGR is hardly without company in the stance that cities are made of tax bases first and citizens second – perhaps one among the “many policy makers and scholars” consulted was New Urbanist Andres Duany (speaking of Feng Shui spatial fixes), who’s said in the past that “affordable housing is not what cities need. Because they don’t pay taxes. They bankrupt cities.” (In another discussion with New Urbanism critic Alex Marshall, Mr. Duany gives us the delicious phrase: “to decant the monocultures of poverty.” ?!? Add alchemy to the growing list of mojos in play.) Does New Orleans need a stronger tax base? Of course. Should we watch what public subsidies are doled out for development projects and how? Like hawks. But are there really legions of well-heeled taxpayers lined up out there to fill the market-rate portions of these projects and solve all our economic problems if only we filter out the Element adequately? (Need a quick financial fix? try green candles Green Condos in your Wealth Corner.) A moment ago, New Orleans was such a wasteland that low-income workers were counseled to settle in other parishes post-haste – there’s no “economic ladder” to climb here, we kicked it away.

Poverty won’t be solved by any one magic bullet, spell, charm, or fetish, and if pretending we’ve neutralized it draws attention away from the needs of actual people in actual neighborhoods, we could leave city and citizens alike just as bad off as before (I’m really tired of the rationale that whatever we do couldn’t be worse than before just as long as we do it differently). Not to mention, lingering any longer on trying to attract developers and these mysterious market-rate renters to fill out the 60-80% units it’ll take to justify the 20-40% affordable units just limits repopulation (the tax base, the tax base!). The Rental Road Home plan may not be an absolute gem, but it’s time now to start getting people into homes again, not play mad social scientist. What color candle do we have to light to do that?