[StBernard] HR 4100 - The Baker Plan

[Westley Annis]

Jenny,

Here's the "short" version from Rep. Baker's website. 

You can also listen to his comments on WWL radio from his web site.

http://baker.house.gov

Westley

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Louisiana Recovery Corporation
(H.R. 4100)
Wednesday, November 2, 2005 

U.S. Rep. Richard H. Baker, issued the following statement today in response
to numerous questions his office has received about his legislation (H.R.
4100, the text of which may be found here) to establish the Louisiana
Recovery Corporation (LRC): 

"It has come to my attention that some confusion over my Louisiana Recovery
Corporation legislation may have resulted from characterizations made about
it in a Monday news article, and I can certainly understand why, when the
opening sentence of the story describes the plan as one of two 'radical
ideas that would give the government broader control over private property.'
Innovative, perhaps, but by no means radical. And its purpose is certainly
not to expand government control over private property. Rather, its intent
is to grant as many options as possible to frustrated property owners. 

"Let me be very clear: 

. For a property owner, if you do not want to talk to the LRC, don't -
nothing will happen to you. 
. If you want to sell your property to the LRC, you may. 
. If you wish to retain a special option to return to your neighborhood, you
will have it. 
. If you want to be a partner with the LRC in the rebuilding of your
property, that's an option, too. 
. All options are determined by the property owner, not the LRC. 
. The master plan for how communities are to be rebuilt will be developed
through the guidance of state and local officials and the residents
themselves, not by the LRC. 
. In sum, the LRC is nothing more than a way to channel federal resources to
provide financial assistance for property owners and for residential
redevelopment based on plans made at the community level. 

"That's it. If you hear anything else, it's another plan, not the LRC. Now,
lets' get to the specifics. 

"Because the article seemed to lump my plan together with another, so-called
'usufruct' plan, I believe it is incumbent upon me to clear up as many
questions as possible, and to specify as best I can just what the LRC is and
what it isn't. First of all, the LRC would not take control of anybody's
property. What it would do, however, is offer property owners whose property
is beyond repair, or who cannot or are uncertain whether they can rebuild,
an opportunity to sell their property to the LRC, receive compensation on
their equity and, if it applies, have any loan obligation settled so that
they have financial stability to be better able to plan for the future, and,
most importantly, to have additional options for how to rebuild in or return
to the neighborhood they call home. In the meantime, the LRC would pay for
the reconditioning of the land and provide the infrastructure improvements
necessary for it to be redeveloped. 

"Second of all, the LRC would not force property owners to do anything,
because the first option they would have is to have absolutely no
relationship with the LRC at all. If property owners have the means and
recourse to make repairs or rebuild on their own, as some are already doing,
then obviously they don't need the LRC and won't have to make use of its
services. I will say, however, that I have heard many stories of people who
do in fact have the means to rebuild on their own, but, until levee
restoration is complete or FEMA outlines new floodplain maps or new building
standards are issued, they can't or aren't sure if they should rebuild
because they don't know if future insurance and financing will be available
for whatever they might undertake. 

"Property owners who do choose to deal with the LRC are of course free to
take their money and restart their lives wherever they see fit, but if,
let's say, they feel a certain historic or other connection to their
neighborhood, another option available to them will be to retain a first
right of refusal to purchase a property of similar size and location in the
redeveloped area before the area is made available to the general public.
Or, if they wish to rebuild themselves on a lot of similar size and
location, have the means to do so but the land is simply not developable in
its present condition, they may opt to retain an interest in the property,
have the LRC negotiate to satisfy the outstanding mortgage, but because they
received no monetary compensation for the property, they will instead be
required to develop the property on their own and reimburse the LRC for any
expenses associated with improving the property and readying it for
construction. 

"In crafting this legislation I have tried to account for the personal
situations of as many property owners as possible, and to offer as many
options as possible, so that the prospect of eminent domain would remain
unnecessary and unused to the greatest extent possible. As a longtime
proponent of private property rights myself, I share a deep concern about
eminent domain, especially in light of the abuse of it I saw demonstrated in
the recent Kelo Supreme Court decision, and that concern is reflected in my
legislation and largely addressed by the property owner's right to opt out
of any dealings with the LRC to begin with, and would only become
unavoidable in limited situations in which property owners failed to follow
through on agreements they had reached with the LRC. Because of people's
understandable sensitivity on this issue, I would offer that if anyone were
to provide me reasonable suggestions of additional options for property
owners and of ways to improve upon protections of their rights by the LRC, I
would be eager to hear about and incorporate them in my legislation. 

"Perhaps because of people's misunderstanding of this aspect of the bill, I
have heard some say that they don't want to hear talk of any plan other than
one that promises that somehow, somewhere, someone will come along and hand
people money to pay their mortgages for whatever indeterminate amount of
time they might need it, and give them however much money it will take to
rebuild, regardless of the financing and insurance uncertainties that lie
ahead. I too wish to hear of such a plan, but I also know that it does not
exist, and I think it's unfair to people to give them the false hope that it
will. 

"Which gets to why I have proposed the LRC in the first place. Apart from my
long experience on matters of insurance, financial services, housing
finance, and real estate, and my seniority and jurisdiction over such
matters in Congress, as dean of Louisiana's congressional delegation, I feel
I have an obligation, particularly in this difficult time, to put that
experience to work for the good of all Louisianians, and to listen to the
concerns of thousands of people from across the state now residing in my
district. From Lake Charles to Lakeview, from the Ninth Ward to New Orleans
East, from St. Bernard to Jefferson Parishes, property owners rich and poor
and black or white find themselves in similar circumstances and are asking
the same questions: What financial options are available for me? Where is
the plan that offers me some direction and security to be able to decide
what to do? How can I retain the right to remain in or return to my
neighborhood? And how can I have a say in how my neighborhood may be
rebuilt? 

"On that last question, right now Governor Blanco and Mayor Nagin are
commendably assembling urban planning conferences and urban planning teams
to map out a vision of what Louisiana's rebuilding should look like. In my
district next week, as well, Louisiana ACORN, in association with LSU's
College of Art and Design and other architects and planners, will hold a
rebuilding forum to ensure that the concerns of displaced low-income and
minority residents are reflected in any final plans for rebuilding New
Orleans. It's essential for our state that all these plans work together and
in coordination with one another, and while the LRC itself contains a strong
emphasis on urban planning in its structure and its redevelopment process,
it is also important to understand that it is designed not to compete with
these initiatives or to make the plans itself, but, just the opposite, to
use the consensus vision as a blueprint to pursue the plan crafted by
Louisianians themselves. In the end, however, there will still need to be a
way by which we bring those plans into reality, and the LRC, then, would
serve as an essential funding and implementation mechanism to keep the
collaborative process moving forward and to help reach that end. 

"And while we all must work together, we must also work fast. Beginning
about December 1st, the 90-day forbearance period most banks granted
borrowers before requiring mortgage payments again will give out, and the
clock is ticking toward a period when truly tough decisions and real
financial stress and uncertainty set in. Because of this, it is my intention
to hold hearings and demonstrate progress to the people of Louisiana at the
very least by passing this bill in my Capital Markets subcommittee and the
full Financial Services committee by that time. That's why I am asking all
residents and government officials of the impacted areas to look closely at
my bill, which can be found here, to contact me and all your Louisiana
elected representatives, to offer your support for the plan or your ideas
for making it better. In it, you'll find other important priorities for the
state, such as the strong emphasis placed in the criteria that redevelopment
contracts go to Louisiana companies that hire Louisiana residents for the
rebuilding jobs, that utilize effective land-use management and mixed-use
development, and that make use of all available programs to promote
affordable homeownership to guard against regional gentrification. 

"In response, I promise to work with all concerned to find a way to make
this idea work. If not this idea, then tell me one better, and, regardless
of whose it is, I pledge to fight on its behalf to make it happen. But
unless we agree upon a plan to offer economic stability and relief for the
financial strain of Louisiana property owners, and until we find a mechanism
to help facilitate the actual physical redevelopment of residential
communities, I fear that all our hopes for Louisiana's strong recovery, and
all our plans to rebuild our state 'better than before,' may remain
regrettably unfulfilled."