By The Editors

The federal government’s $11-billion project to help Louisiana homeowners recover from the 2005 hurricanes Katrina and Rita unfairly penalizes most black homeowners, especially those in New Orleans, according to the NAACP Legal Defense and Educational Fund.

Indeed, because of the Road Home Program’s “fundamental flaw” in the way it calculates the grants to be dispensed to homeowners, African-American homeowners will get “just a fraction of the funds” they actually need to rebuild their homes, extinguishing for many “their hope of returning to their communities,” LDF Associate Counsel Matthew Colangelo told a House of Representatives subcommittee today.

That prospect, Colangelo said, has provoked a class-action lawsuit against the program on the grounds that it violates the anti-discrimination provisions of the Fair Housing Act of 1968 and the Housing and Community Development Act of 1974.

The two storms displaced more than 900,000 people throughout south Louisiana, submerged 80 percent of New Orleans, and were responsible for the deaths of 1,464 people, according to Paul Rainwater, head of the Louisiana Recovery Authority, which administers the project within the state.

Both men were among those testifying at the hearing of the House subcommittee on Housing and Community Opportunity. The subcommittee chaired by Rep. Maxine Waters, D-CA, scheduled hearings at Dillard University in New Orleans Thursday and Friday to mark the coming fourth anniversary of the powerful storms that devastated the Gulf region and left New Orleans itself seemingly on the edge of extinction. The federal legislators

Others speaking before the subcommittee included a homeowner who said that just this past week she was able to move back into her home after four years of living in a Federal Emergency Management trailer.

Colangelo, director of LDF’s Economic Justice Group, said the lawsuit against the Road Home Program was filed last November by five black homeowners and two fair housing organizations, the Greater New Orleans Fair Housing Action Center and the National Fair Housing Alliance. LDF is a co-counsel in the case, along with the law firm of Cohen Milstein Sellers & Toll, representing a proposed class of nearly 20,000 black New Orleans homeowners.

The suit claims that, contrary to its mission, the Road Home project is actually making it impossible for many black homeowners to renovate their homes. The reason, Colangelo said, stems from the fact that homeowners are given grants to rebuild on the basis of the lower of either what was the market value of their home before the storms occurred, or the cost of storm damage to the home. By those terms then, he continued, homeowners either receive enough assistance to rebuild, if the cost of the damage the home sustained was less than its pre-storm value; or they get less than they need, if their home’s pre-storm value was less than the cost of the damage.

In practice, that means that owners of nearly identical homes with similar storm damage and repair estimates have gotten substantially different grant awards – awards based on where they happen to live and the market value of their homes before the hurricanes struck.

Colangelo said the program’s “formula has had a discriminatory impact on African Americans, because homes in predominantly African American communities had lower values than those in predominantly white communities, even when the condition, style, and quality of the homes were comparable. This is largely due to decades of racial discrimination in the Louisiana housing market that has caused and reinforced segregation in residential housing.”

The result, he contended, is that Road Home grants to black homeowners are more likely to be based on the depressed pre-storm value of their homes than the cost of the storm damage – leaving African American families with not enough money to renovate their homes.

The lawsuit seeks to force the federal Department of Housing and Urban Development and the Louisiana Recovery Authority to follow federal fair-housing regulations and change the program’s rules for giving grants. Officials of both have resisted, and Paul Rainwater, of the LRA, did not address the issue of the law suit in his remarks prepared for the subcommittee.

However, Colangelo urged the subcommittee to push the Congress and the Obama Administration to require that HUD and the Recovery Authority “distribute those funds fairly and in compliance with civil rights mandates … [they] have a responsibility to ensure that our nation’s largest-housing recovery program does not go down in history as a government-sponsored act of housing discrimination.”