[StBernard] $4.2 billion has strings, officials say

[Westley Annis]

$4.2 billion has strings, officials say

La. lawmaker: N.O. in danger of depopulating

By MICHELLE MILLHOLLON
Capitol news bureau 
Morning Advocate
Published: Feb 23, 2006 

The Bush administration's additional $4.2 billion in proposed housing aid
for Louisiana would greatly limit rebuilding homes and force a lot of
hurricane victims to abandon their neighborhoods, officials said Wednesday.

U.S. Rep. William Jefferson, D-New Orleans, predicted the constraints on
spending the new money would depopulate parts of New Orleans forever. 

The restrictions would greatly limit local decisions on redeveloping
storm-struck areas, said U.S. Rep. Richard Baker, R-Baton Rouge, who alerted
the news media to the surprise wording in Bush's new funding request to
Congress.

President Bush has repeatedly stressed that local residents and officials
must decide how to spend federal hurricane recovery money.

But Baker said the White House deliberately placed strings on the proposed
funds in response to the political winds on Capitol Hill. Baker said many
members of Congress don't want large areas of the storm area to be rebuilt.

"It is a box from which we must extricate ourselves very carefully," Baker
said. 

That box, according to Baker and Jefferson, would give the state only two
choices on spending the money on homes - elevating them or turning the land
into green space. 

That means far fewer people might get to repair or rebuild their homes, and
more might have to sell their property to the state and move elsewhere,
Baker said.

The limit would work against New Orleans as the city tries to bring back
residents, Jefferson said in a statement.

A senior adviser to federal hurricane rebuilding coordinator Don Powell
stressed that the funding request still is working its way through Capitol
Hill. 

The goal is to address the state's needs "in the most flexible way allowed
under law," D.J. Nordquist said. 

One option would be for the state to obtain waivers from the U.S. Department
of Housing and Urban Development to use the funding to repair and rebuild,
she said.

Baker said he is not certain that HUD has the authority to approve waivers
on a federal law. Even if HUD has that power, approving case-by-case waivers
would be a tedious task for the federal agency, he said. 

Andy Kopplin, executive director of the Louisiana Recovery Authority, said
he is meeting with federal officials today to emphasize the constraints the
request's wording places on the state.

"Part of our shared interest is making sure that, as we rebuild, we rebuild
safely," he said. "That's a reasonable point to make. At the same time, we
have to make sure that the resources being requested can be effectively
utilized."

Hurricanes Katrina and Rita destroyed at least 128,000 homes in Louisiana,
state officials say. Tens of thousands more homes sustained damage.

To date, the federal government has allocated $5.6 billion that Gov.
Kathleen Blanco plans to use for housing - the state's top recovery priority
after stronger flood protection.

More than $1 billion of that money is limited to "hazard mitigation" -
construction that reduces exposure to future flooding by elevating buildings
or restricting the redevelopment of property.

The Blanco administration pushed for more federal funds, arguing that the
state's housing needs are a $10 billion problem. 

On Feb. 15 President Bush responded by including an additional $4.2 billion
for housing in a supplemental spending proposal that must be approved by
Congress. 

Blanco hailed the new money as the answer to Louisiana's housing problems.

Blanco unveiled a $7.5 billion housing plan on Monday that hinges on the
state receiving the $4.2 billion. Blanco wants to give homeowners a menu of
choices: Repair, rebuild, relocate within the state or sell the property.

Bush's funding proposal would greatly limit the state's flexibility to offer
housing choices, Baker said.

If the new money is approved with Bush's limits, half of the federal funds
allocated to the state would be trained on buyouts and property elevation,
he said.