In The News › Flood-imperiled N.O. homes are granted more dollars to raise ... than they’re actually worth

Nov 10, 2010

Source: The Times-Picayune

Filed under: Contracting, Orleans Parish

Flood-imperiled N.O. homes are granted more dollars to raise ... than they’re actually worth

Wednesday, November 10, 2010
By John Pope
The Times-Picayune

Tucked far back in a report on New Orleans’ contracting policies is a chart full of eye-popping statistics.

The numbers represent federal grants approved for people who want to elevate homes that have a history of flooding — grants that in some cases are more than twice what the property is worth.

One Mid-City house, for instance, has been approved for flood-proofing measures costing as much as $622,773. New Orleans tax assessors put the property’s value at $245,000.

Likewise, assessors value a house on MacArthur Boulevard in Algiers at $92,000, but taxpayers could be on the hook for as much as $257,295 to protect it from flooding.

“It did surprise us,” said Janet Howard, president of the Bureau of Governmental Research, which compiled the report, who examined 28 grants and highlighted the largest ones. “It doesn’t make sense for the use of taxpayer funds.”

The program, which existed before Hurricane Katrina, is aimed only at houses that have sustained repeated flood claims. It is distinct from a beleaguered post-Katrina program overseen by the state that offers homeowners grants to elevate their homes. That caps individual grants at $100,000.

The size of the grant, administered on a reimbursement basis through FEMA, does not take a property’s value into consideration — only the cost of retrofitting versus the cost of past and future flood claims.

The size of the award is based on what the house needs, such as elevation and retrofitting to withstand hurricane-force winds, as well as such expenses as hiring an architect, getting permits and, for a home in a historic district, undergoing a review to make sure it meets district criteria, said Stephen Stuart, a research analyst at BGR.

The key question is whether the strengthening measures will wind up saving money in the long run because the owners won’t need to file flood-insurance claims, FEMA spokesman Manuel Broussard said. The program was created because administrators of the flood insurance program calculated that only 1 percent of policy-holders suffer repeated flood damage, but their claims account for 30 percent of annual insurance payouts, Bob Hunter, a former administrator of the National Flood Insurance Administration and now the Consumer Federation of America’s director of insurance, acknowledged that “you don’t want to ruin (a house) every time there’s a flood.”

But, he added: “When you’re spending more than the house is worth, it doesn’t make sense in normal situations.”

Others, though, said the cost of flood-proofing measures should not be a factor. What’s important is not leaving a home vulnerable to the next big storm or flood, said Leslie Chapman-Henderson, president and chief executive officer of the Federal Alliance for Safe Homes, a nonprofit Florida organization that advocates for reducing risk and building wisely.

“That would be the ultimate failure,” she said.

‘Bureaucratic mess’

Although the grants are impressive in size, that hasn’t translated yet into impressive improvements, according to some homeowners.

Gayle Gagliano, for instance, is the homeowner who was approved for a $622,773 grant for work on her 3,300-square-foot Mid-City house.

Because the main portion of her house is already raised, there is the prospect of adding height to her attic and leaving the ground floor open. Elevation is expected to cost $301,731, according to the contract she signed, and the estimate of wind retrofitting is $192,310.

So far, Gagliano, whose home has flooded six times, has drawn down about $30,000 for preliminary work by people such as architects and surveyors.

Nothing else has happened, she said. “It’s the worst bureaucratic mess.”

FEMA pays 75 percent of the amount, and the state puts up the rest. The Mayor’s Office of Homeland Security and Emergency Preparedness is the local administrator that determines whether homeowners meet criteria for participation, said Jerry Sneed, deputy mayor for public safety in the Landrieu administration.

Jefferson Parish has imposed a cost limit of $75 per square foot for home repairs, something the BGR report suggested New Orleans might want to emulate. But Sneed said such a ceiling wouldn’t work in New Orleans.

“To compare us to Jefferson Parish is an unfair comparison,” he said. “Look at the homes here in New Orleans. They’re so different. … Our homes are so unique and so different. … Throw in a historic district, and the cost goes through the roof.”

The tone of the BGR report “sounds as if we’re not interested in taxpayer dollars,” Sneed said. “That’s the farthest thing from the truth. We’re trying to do (repairs) in the most beneficial way possible.”
‘This is what we do’

In Hunter’s view, some places that are especially vulnerable to wind and water shouldn’t be inhabited at all. But, he added, New Orleans is teeming with neighborhoods with historic value — and susceptibility to flooding — where families have lived for generations.

“You want to keep those kinds of places,” Hunter said.

Chapman-Henderson agreed.

“It’s easy for a third party to say that people shouldn’t be in a certain area,” she said. “It’s very difficult to say that about a particular person in a particular place in light of Katrina.

“Building in harm’s way is a very big question, but this is America. This is what we do. Our philosophy is that if you’re going to build in harm’s way, equip yourself with every measure you can to be resilient and bounce back.”

Nov 10, 2010

Source: The Times-Picayune

Filed under: Contracting, Orleans Parish

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