CHN: Legislation Addresses Post-Hurricane Housing Needs

The response of the federal government to the housing crisis resulting from the 2005 hurricanes has been haphazard and mismanaged by both FEMA and HUD. According to the National Low Income Housing Coalition, an estimated 302,000 housing units were severely damaged or destroyed by Hurricane Katrina.  Approximately 216,000 of those units were affordable to low income households and the overwhelming majority were rental units.  Now 1 ½ years later, tens of thousands of families remain displaced; some relocated from one FEMA trailer court to another, some waiting to learn when they can return to the public housing unit they once occupied, and still others waiting to receive compensation so they can rebuild their homes.
On March 7, the House Financial Services Committee took an important step in response to the ongoing crisis by passing bipartisan legislation, The Gulf Coast Hurricane Housing Recovery Act of 2007, H.R. 1227.   The bill would provide increased flexibility to free up existing funds, assist evacuees with rental housing, preserve public housing and provide support for local communities that assisted evacuees with housing.

H.R. 1227 blocks HUD from demolishing four public housing complexes in New Orleans until plans are developed to replace them and grant displaced tenants an absolute right to return.  It requires HUD to provide a replacement voucher for every public or assisted housing unit destroyed by Hurricane Katrina. The Disaster Voucher Program (DVP), currently providing housing to over 27,000 households, is set to expire in September 30, 2007.  The bill extends the DVP through January 1, 2008, after which households remaining in the program will be transferred into the Section 8 voucher program.  The bill frees up $1.2 billion currently withheld by FEMA for Louisiana’s Road Home Program which affords eligible homeowners up to $150,000 compensation to rebuild their homes. H.R. 1227 provides authorization for reimbursing communities that used their own CDBG funds to provide rental assistance to evacuees after the storms.

Other legislation introduced last week also addresses the need for affordable housing, and initially targets assistance to Louisiana and Mississippi.  With support from both parties, Rep. Frank (D-MA), Chairman of the House Financial Services Committee, introduced the Federal Housing Finance Reform Act of 2007, H.R. 1427, to overhaul the regulatory oversight of Fannie Mae, Freddie Mac and the Federal Home Loan Banks, all of whom write mortgages with federal help.   The bill would establish an affordable housing fund financed by a portion of their portfolios for the construction, maintenance and preservation of affordable housing benefiting very low income (below 50% of area median income) and extremely low income (below 30% of area median income) families.  In the first year, 75% of the funds would go to Louisiana and 25% of the funds would go to Mississippi for housing needs arising from the Gulf Coast hurricanes.   Thereafter funds would be allocated to states on a formula basis.

H.R. 1227 is expected to be voted on by the full House next week.  The Senate has not yet introduced a counterpart to either bill.

Housing and Homelessness