Settlement reached in Road Home discrimination challenge

11th July 2011 · 0 Comments

By Kelly Parker
The Louisiana Weekly

Residents impacted by hurricanes’ Katrina and Rita are perhaps closer to moving beyond the “roadblock” known as the Road Home Program. On Wednesday, the federal government helped put an end to the long battle between the U.S. Department of Housing and Urban Development (HUD), the State of Louisiana and local fair housing activists.

The federal government has approved a settlement that ends the legal challenge brought forth by two civil rights organizations and African-American homeowners to the Road Home program. Under the terms of the agreement, the state will be awarded $62 million under its new Blight Reduction Grant Adjustment Program (BRGA). Additional assistance under this effort will be awarded to a little more than 1,300 homeowners in Cameron, Orleans, Plaquemines, and St. Bernard parishes who received compensation under the Option 1 Road Home terms; which was based on pre-storm value (PSV) of their homes. According to the Greater New Orleans Fair Housing Action Center, Road Home program data show that African Americans were more likely than whites to have their Road Home grants based upon the much lower pre-storm market value of their homes, rather than the estimated cost to repair damage.

The lawsuit was brought (back in 2008) by the GNOHAC, the National Fair Housing Alliance, and five African-American homeowners in New Orleans, representing a potential class of over 20,000 residents. Plaintiffs are represented by co-lead counsel, the NAACP Legal Defense and Educational Fund, along with established law firms Cohen Milstein Sellers & Toll, and Wilmer, Cutler, Pickering, Hale & Dorr.

“This settlement is a step in the right direction toward getting more hurricane-affected homeowners back into their homes. HUD and Louisiana must keep America’s promise to build a better New Orleans. And they must do so in a manner that is fair and equitable for all people regardless of their race,” said James Perry, executive director of the (GNOHAC)

In response to the plaintiffs’ discrimination lawsuit, HUD and the State of Louisiana changed the Road Home program grant formula to provide full relief to more than 13,000 homeowners. All eligible low-and moderate-income homeowners (the majority of whom are African-American households living in Orleans Parish) received ‘uncapped additional compensation grants’ totaling $473 million based upon the estimated cost of damage to their homes, and not merely upon the much lower pre-storm market value of their homes.

Damon Hewitt, Director-Education Practice Group of the NAACP Legal Defense and Educational Fund told The Louisiana Weekly that the settlement is a step in the right direction, but the ultimate goal has yet to be met.

“We’re certainly not 100 percent pleased with this; we think we did as much as we could, but we’ve said publicly to the state and to HUD that the job is not done,” he stated. “There’s no need to unfurl the ‘mission accomplished’ banner, because there are people still suffering an injustice. Unfortunately we weren’t able to direct funds to them, because the last piece of this program focuses on people who are not back in their homes.”

Out of the large number of people the groups set out to help, the majority was assisted, but Hewitt knows residents were left out.

Romy Schofield-Samuel considers herself ‘left out of the loop’. She moved her family from their Gentilly home to New Orleans East after not receiving any assistance from the Road Home. She was able to make a loan to relocate her family.

“I couldn’t sit on my hands and wait for them to get it right:” She said.

As a result, she sold her home in Gentilly.

“To me, that is what’s most frustrating; if you took the initiative to do things on your own, you’re being punished.”

“The Road Home is the most ridiculous program I’ve ever seen, because it makes no sense,” she added. “I’ve spoken to people in other parts of the city who got little or no damage, and got money, and they probably needed it; but to me, the program should have been geared to help all residents who sustained water damage. The elephant in the room is that this is still a very racist state, and until you treat everyone fairly, Louisiana will not move forward.”

“There are people who will not benefit directly from this settlement, but we’ve pushed the state and HUD to help as many residents as possible,” Hewitt added. “They’re in a position to finish the job; they just have to find more funds to do it. And if they don’t do it, it’s going to be a legacy that they will have to live with.”

The money, set to be distributed to residents, is part of nearly $100 million left over in the $10 billion Road Home program.

Hewitt states the (GNOHAC) and the National Fair Housing Alliance along with individual homeowners actually reached out to the LRA stating their concerns with the criteria in place to determine assistance.

Even within the pre-storm value criteria, Black homeowners are discriminated against, Hewitt explains. “There’s a double-layer of discrimination with the program. Even among those who have grants based on (PSV) there’s still discrimination in play; because if you have a house in a majority (Black) neighborhood and a house in majority (white) neighborhood that’s the same size with the same amount of damage, the house in the majority (white) neighborhood will be worth more, because the market discriminates.”

Congressman Cedric Richmond echoes Hewitt’s sentiments.

“Everyone knew that the Road Home formula for calculating grant awards was deeply flawed and punished folks in neighborhoods where home values were lower,” he stated.” I have called for a remedy since the inception of Road Home. After all, if two families are both rebuilding a three bedroom home then their construction costs will be the same—regardless of the neighborhood. In that case, each family deserves the same assistance from their government. Unfortunately, the flawed formula was effectively discriminatory, locking many families out of equitable assistance”.

Existing Road Home applicants must meet all of the following criteria to qualify for additional compensation under the (BRGA):
• Must be a Road Home applicant who selected Option 1 and intends on repairing or rebuilding their damaged home;
• The damaged home must have been in one of the four most impacted parishes (Orleans, St Bernard, Plaquemines or Cameron);
• The applicant’s original Road Home grant is significantly constrained by the Road Home determined Pre-Storm Value (PSV);
• The PSV upon which the original grant is based was at or below the 55th percentile of the parish;
• As of May 1, 2011, the homeowner has been unable to complete repairs and return to their damaged property or has returned without repairing the property and it is uninhabitable under the applicable codes and ordinances of the local jurisdiction; and
• The homeowner agrees to participate in a construction advisory services program offered by the State to help guide the homeowners in the continued efforts to restore their lives

Hewitt says some of the individual plaintiffs in the case did benefit from the additional compensation grant once it was uncapped; however, there are a few that will likely not receive anything at all, such as plaintiff Almarie Ford. Ford, still thankful for the efforts stated, “I am glad that by standing up against this flawed program we made a difference for so many other people.”

“Its people like Ms. Ford that can still use the help.” Hewitt told The Louisiana Weekly. “She used everything she had to get back into her house in New Orleans East. She was awarded less than $2,000, and if her grant was based on the Estimated Cost of Damage, she would have received at least $150,000.”

According to Hewitt, those who qualify for assistance should not have long to receive assistance, and suggests any homeowners who have questions about qualifications review the final draft of the proposed (BGRA) Action Plan Amendment 51, released by the state. The Action Plan specifies in detail how the state will determine eligibility, provides calculation examples and also includes questions and recommendations submitted by individual homeowners as well as the fair-housing advocates involved in the lawsuit.

“Our hope is that Louisiana and (HUD) will never do anything like this again.” Hewitt says. “We have pledged to continue pushing the state and (HUD) to do whatever else they can to address this.”

For details on the (BRGA) Action Plan Amendment 51, go to www.doa.la.gov/CDBG/dr/drActionPlans.htm.

This article originally published in the July 11, 2011 print edition of The Louisiana Weekly newspaper.