RICH BETTER OFF AFTER KATRINA

NEW ORLEANS - Greater New Orleans Fair Housing Action Center (GNOFHAC) Executive Director James Perry has testified before the House Judiciary Subcommittee on Constitution, Civil Rights, and Civil Liberties. Perry reported that in the Gulf Coast region since Katrina, “the most egregious cases of discrimination have been perpetuated by government actors entrusted to serve the very communities that they have discriminated against.”

Perry cited numerous examples of how discriminatory actions and policies on the part of government have “stunted recovery for scores of thousands of Gulf Coast residents,” particularly people of color, people with disabilities, families with children, and low-income residents. For example, “rather than a Road Home, many black homeowners have found a road leading to despair, inequity and discrimination” because of the racially discriminatory Road Home grant calculation formula. Perry also pointed to discriminatory actions and policies on the part of FEMA, St. Bernard Parish, the State of Louisiana, and the Housing Authority of New Orleans in the five years since Katrina.

In closing, Perry made several recommendations to Congressional leaders in order to ensure a truly equitable recovery on America’s Gulf Co ast. These recommendations include reaching out to HUD Secretary Donovan to remedy the Road Home program of discrimination, and to “promulgate legislation that adds new protections to the federal Fair Housing Act and provides real penalties for government bodies that receive federal funding but fail to affirmatively further fair housing.”

GNOFHAC Executive Director James Perry comments, “Congress' decision to evaluate the effects of housing discrimination during the five years since Hurricane Katrina is a good sign. It is the first step in adjusting the law to insure that all Americans have equal access to housing.”

Federal court judge Henry Kennedy, Jr. ruled this month that the Road Home housing program is likely discriminatory. With approximately 150,000 participants, the program is the largest single housing program ever undertaken by the federal government. It was designed to help Louisiana residents recover from Hurricanes Katrina and Rita. Judge Kennedy enjoined the program from using its discriminatory formula. His ruling will insure that future grant recipients are treated fairly. However, Judge Kennedy believes that the law doesn’t allow him to help families who have already received Road Home grants. A federal appeals court has been asked to consider whether or not Kennedy can help the scores of thousands of families who have already received discriminatory grants from the program.

What is the Road Home program: The Road Home program is designed to provide compensation to Louisiana homeowners affected by Hurricanes Katrina or Rita for the damage to their homes. The Road Home program is the largest single housing recovery program in U.S. history.

How the program is discriminatory: The program grants awards based in part on the lower of either pre-storm property value or the cost of repair. Homeowners in African American neighborhoods, where property values are lower due to decades of institutionalized housing discrimination, received less money to rebuild because of the formula. As a result, many homeowners in predominantly African American neighborhoods in New Orleans have still not been able to complete repairs to their homes and move back into their communities.

For example, consider two identical homes, with identical hurricane damage, and identical repair cost of $150,000. One home is in a predominately white neighborhood,and worth $150,000 while the second home located in a predominately African American neighborhood is worth only $100,000. Under the discriminatory formula, the white homeowner would be eligible to receive $150,000 while the black homeowner would be eligible to receive only $100,000 - in spite of the fact that the homes are identical. Because of the discriminatory formula, the black homeowner is $50,000 short of the amount needed to get back into her home. This fact pattern has played out thousands of times leaving black homeowners far short of the amount they need to rebuild their homes.

Case Details: The honorable Judge Henry Kennedy, Jr. granted the Greater New Orleans Fair Housing Action Center’s (GNOFHAC) second motion for a preliminary injunction and temporary restraining order in the case Greater New Orleans Fair Housing Action Center, et al. v. United States Department of Housing and Urban Development, et al. In his ruling, Judge Kennedy notes that “plaintiffs are likely able to make out a prima facie case that the formula used to calculate awards under Option 1 of the Road Home program violates the Fair Housing Act,” and prohibits the Louisiana Office of Community Development, from disbursing future, initial awards under the Road Home program using the pre-storm value of the home as a criterion for calculating the amount of such award.

In 2008, GNOFHAC filed the suit, alleging that Road Home grant calculations based on the pre-storm value of hurricane affected houses rather than the cost of repair were a violation of the federal Fair Housing Act. Pre-storm values in African American neighborhoods across the city are lower than pre-storm values in predominantly white neighborhoods due to decades of institutionalized discrimination against African Americans. Judge Kennedy’s ruling on Monday represents the first major victory for plaintiffs in the case.

A written copy of Perry’s testimony can be found at www.gnofairhousing.org

The Greater New Orleans Fair Housing Action Center (GNOFHAC) is a private non- profit
organization. GNOFHAC is dedicated to eliminating housing discrimination and furthering equal
housing opportunities through education, outreach, advocacy, and enforcement of fair
housing laws across the metro New Orleans and Baton Rouge areas.