Katrina 3-Year Coverage: The long road home continues: the New Orleans housing crisis

Facing South reported earlier about the affordable housing crisis on the Mississippi coast that continues to slow post-Katrina recovery in that state. But Mississippians aren't the only ones whose post-Katrina housing needs are not being met. A new report released yesterday by the nonprofit research and advocacy organization Policy Link found that many New Orleans many residents are still unable to afford to rebuild their homes or find an affordable place to rent.

"A Long Way Home: The State of Housing Recovery in Louisiana 2008" shows that while some progress has been made during the past year, thousands of residents who want to return home are facing a critical rental housing shortage, inadequate rebuilding grants and a recovery plagued by red tape and ever-changing rules. The report analyzes three major federally funded housing-recovery programs: the Road Home and the state's small and large rental-repair programs.

Some key findings:

• In New Orleans, 4 of every 5 Road Home recipients rebuilding their homes did not get enough money to cover their repairs. Statewide, more than 2 of every 3 face the same predicament.
• Statewide, the average Road Home applicant fell more than $35,000 short of the money they need to rebuild their home. The shortfall hit highly flooded, historically African-American communities particularly hard.
• Nearly 40,000 low-income homeowners received an average of about $27,000 each from an additional Road Home grant program designed to help vulnerable residents.
• Renters still face huge hurdles - only 2 in 5 damaged affordable rental units statewide will be repaired or replaced with recovery assistance. In the New Orleans metro region, it's an even more dismal rate of 1 in 3.
• The national credit crunch and personal financial vulnerability keeps many mom-and-pop landlords from being able to rebuild through the small rental repair program. Meant to restore more than 10,000 rental homes, the program has completed only 82.
• Nearly 28,000 families nationwide still rely on disaster rental assistance, with 14,000 in the greater New Orleans metro region alone. There will not be nearly enough affordable rental units on the market by the time the assistance runs out in March 2009.

The Times-Picayune also reports that most Louisiana homeowners did not receive enough Road Home money to completely rebuild their homes, and limited recovery dollars will only help replace a portion of the state's damaged rental units. Rents in New Orleans are now unaffordable for many of the 14,000 families in the metro area who depend on rental assistance from the Disaster Housing Assistance Program, which is slated to end at the end of February. According to the Times-Picayune:

In New Orleans, 81 percent of Road Home recipients received awards that did not cover the needed repairs to their homes. The average shortfall was $54,586, the [Policy Link] report stated. In other parishes, 69 percent of recipients had shortfalls.