Post-Katrina reconstruction of affordable housing lags in Mississippi

Poor New Orleanians are not the only Gulf Coast residents whose post-Katrina housing needs are being treated with disregard by their government: Low-income residents of Mississippi are also facing dire problems that have been exacerbated by the actions of Congress, the Department of Housing and Urban Development and state authorities.

As James Perry of the Louisiana Housing Alliance testified earlier this week before the Senate Committee on Banking, Housing and Urban Affairs, of the $16.7 billion that Congress appropriated for post-disaster needs in the form of Community Development Block Grant money, only $1 billion was designated to repair or replace affordable rental housing, including public and assisted housing, he told the committee. At the same time, Congress gave the states what he characterized as "unusual flexibility" in who could be served by CDBG funded programs. While the standard CDBG requirement is that 70 percent of funds should benefit low-income people (defined as those earning at or below 80 percent of the local median income), Congress required only 50 percent of the storm-related CDBG funds to serve this population -- and then gave HUD the authority to waive even the 50 percent requirement for "compelling need."

This has had an especially big impact on Mississippi, Perry told the committee:

Almost 92% of the $5.4 billion Mississippi CDBG allocation has now received waivers from this requirement. Additionally, the recovery allocations that Mississippi has dedicated towards housing recovery have been disproportionately skewed towards homeowners and away from rental repair programs.

But at the same time, Gov. Haley Barbour has proposed diverting $600 million of the CDBG housing recovery funds to expand the Port of Gulfport -- a plan that has provoked a firestorm of opposition, including an editorial in today's New York Times calling on Congress to revisit the waiver process "to make sure that states aren't using it to evade the income restrictions clearly laid out in federal law."

And now there's yet more evidence of the formidable barriers confronting low-income Mississippi residents trying to rebuild their lives after Katrina. The first comprehensive study examining the impact of the storm on housing in the state's three hard-hit coastal counties was released today by the RAND Corporations' Gulf States Policy Institute, and it found that affordable housing recovery lags behind the pace of the rest of the housing market in the region -- and that in turn is impeding the overall pace of the recovery, according to a release announcing the report:

This gap has seriously worsened the pre-Hurricane shortage of affordable housing in Hancock, Harrison and Jackson counties, researchers say. The problem makes it particularly difficult to attract the construction laborers and other workers needed to rebuild the region's devastated infrastructure, the report says.

"The challenge for the region is to develop a balanced growth plan that provides housing for people at every income level," said Kevin McCarthy, the study's lead author and a senior social scientist at RAND, a nonprofit research organization. "There needs to be more affordable housing to create diversity in the economy and build a new, better Gulf Coast."

For a full copy of the RAND study, titled "Post-Katrina Recovery of the Housing Market Along the Mississippi Gulf Coast," click here.