[FoCHAT] CHATNews- The Dead-End of Road Home: Waste of Taxpayer Money To Intimidate Tens of Thousands of Homeowners

[Melanie Ehrlich]

The Dead-End of Road Home: Waste of Taxpayer Money To Intimidate Tens of Thousands of Homeowners 
  
  
July 19, 2010 
Dear CHAT Member, 
>From our website: http://chatushome.com 
  
1.     The Louisiana State Office of Community Development is sending out letters to tens of thousands of Road Home (RH) Applicants that ask them to sign statements threatening “fine” and “imprisonment” about certifying that they have provided true information about filling the covenant for their RH grant. 
2.     One major problem is that the covenant  and Compliance and Monitoring Forms being send to them are contradictory. The covenant requires that they live in their repaired house for any time (officials of Road Home often stated at public meetings that one day would suffice) during the course of 3 years after receiving their grant funds. The Monitoring Forms demands a current utility statement despite the covenant  not requiring that they be currently living in their home. 
3.     Another is that applicants are being asked to give a certificate of occupancy or other such document. This was never mentioned in the covenant and, because of technical, bureaucratic, and financial reasons, some applicants will be living in their home while still awaiting a certificate of occupancy. 
4.     They are also being asked to get a copy of initial permits from the city or parish, which should be unnecessary and was never mentioned to applicants before.  If they lost their copy, these are time-consuming to obtain. 
5.     They are being asked to produce all these documents within 30 days from the day the letter was sent to the applicants, which is unfair and unreasonable. RH  routinely left applicants incommunicado for many months and more than a year but demands rapid responses from beleaguered applicant-hurricane victims, which includes many of those suffering again because of the catastrophic BP oil spill. 
6.     The covenant states that the money applicants received is “compensation for damages. ” What right does the state have to demand repair of homes from applicants and maintaining maximum flood insurance in perpetuity?  Many of the low- and middle-income applicants lost all their possessions in the flood, are in difficult financial straits,  were systematically shortchanged on their grant amounts, and falsely led to believe that they would have a chance for a fair appeal to correct the state’s and the contractor’s (ICF Emergency Management Services) shortchanging mistakes after they signed the covenant papers. 
7.     The covenant states that “”Nothing in these Covenants shall be construed to require the Owner to repair, rebuild, relocate or sell the Property.” Now the state monitoring staff is requiring precisely that repair or rebuilding despite the acknowledgement that “The Louisiana Recovery Authority estimates that at least 20,000 Road Home recipients, or 15 percent, will be unable to rebuild their homes without substantial help.” http://www.nola.com/hurricane/index.ssf/2010/05/nonprofit_assistance_for_road.htm 
o    Even if funds from only 5% of these applicants are recovered, that would mean about $60 million given the average grant of about $60,000. 
o    What will the state do with the majority of these 20,000 applicants who needed the grant money to pay down mortgages suddenly demanded or to pay rent or to pay for partial home repairs that they could not complete because their grant was inadequate? 
o     Will the state try to put leans on thousands of homes thereby negatively impacting the real estate market, which is already depressed? 
8.     All the signs point to this “monitoring” being a waste of taxpayer money for the purpose of justifying jobs for state staff in Baton Rouge and filling state coffers with money (see Item 10, below). Not only will state staff (~120 in the Disaster Recovery Unit that includes OCD) have to process 128,000 Monitoring and Compliance forms and associated documents sent by applicants, but also, the letter with the form tells applicants that there will be a tax money-wasting personal visit to their home to check on the status of repairs! 
9.     What is the purpose of these expenditures? The effect will be to harass over 100,000 victims of the catastrophic hurricane/floods, who often lost their homes as well as their possession due to the faulty oversight of the US Army Corp of Engineers. This was federal guilt money that the State of Louisiana was never given (they got no interest and had to draw down grant funds from a federal account), but rather was responsible for distributing to the victims. 
10.  What will happen to the federal tax dollars “recaptured” from intimidated RH applicants despite the highly dubious legality of the covenant and contradictions in it and in the compliance documents? By the admission of one of the heads of the Housing Dept. of OCD at a public meeting, the recaptured money from applicants will go into OCD’s coffers. 
11.  Therefore, federal dollars intended for hurricane victims are being changed to state dollars to be used at Gov. Jindal’s discretion. This will include enabling state staff to reinforce the opinion of very many applicants who have described the 4-year RH program as a terrible ordeal of no answers or nonsensical ones to why mistakes in their grant calculations were not corrected. Many thousand of these applicants are still not able to repair their homes because of the systematic shortchanging of grant funds to them while almost 10% of the $11 billion went to the contractors ICF Emergency Management Services and HGI (Hammerman & Gainer Inc). 
  
                        
Reference Documents 
http://chatushome.com/chatusfiles/MonitoringForRecaptureLettersForms_7_2010.pdf 
  
http://chatushome.com/chatusfiles/Covenants_SeePoint9_112607.pdf 
  
Grant recipient affidavit, note Point 3 
  
Grant Agreement for homeowners, note Point 1                             
  
  
Questions I would like to raise: 
What will OCD do if applicants don’t get the documentation, especially if a whole lot of them don’t? 
What will OCD do if applicants refuse to sign a statement acknowledging that they can go to jail for lying about things like using RH grant money to help pay the rent for, say, 2 ½ years while they waited for their grant and then an additional ½ year while they found out that their grant was too small to be able to repair their home and awaited the real appeal deliberation for mistakes in their grant that never materialized? 
What will OCD do if the tens of thousands of applicants who are still waiting for their HMGP grant or individual mitigation measures grant and have been left in yet another black hole after sending in lots of difficult-to-get documentation say to them, you got my documents already and you have failed to respond to me for over a year? Now you have the nerve to give me less than 30 days (30 days including mail delivery time) to respond? Go look for what I sent to you, you lost, and I sent again. 
By the way, I met with former head of LRA Paul Rainwater, former LRA Deputy Director Adam Knapp, former head of OCD housing, Mike Spletto, former head of OCD Suzie Elkins, and former head of ICF operations Al Blankenship in Feb. 2008. Among the things I entreated them to fix were these harassing deadlines of 30 days including mail time for applicants while RH routinely kept stringing applicants along for several years, including depositing them in the suspended animation of “inactive grant” for no good reason. Adam Knapp agreed with me about 30 days being unreasonable for applicants to produce documents and said it would be fixed right away. So here we go again via OCD. No, it was not just ICF that was responsible for the arbitrary and capricious way applicants were treated. 
What will OCD do about applicants who can’t meet the covenant to rebuild or repair because (as one applicants recently told me) their house is up in the air with the elevation only partly done as they await their HMGP elevation grant for a very long time (maybe forever, as more and more of the HMGP $1.2 billion that had been promised to RH applicants is siphoned off to parts of the state that did not experience the ’05 hurricanes)? 
                My HMGP grant like many others is overdue by more than a year after sending and resending all the paperwork with no response to my inquiries. No, again, it was not just ICF that was nonresponsive nor the Blanco administration that failed to reform RH. Now, the whole HMGP ballgame is in OCD’s hands and was all fashioned by the Jindal administration. 
What will OCD do with applicants who repaired their home after borrowing money to cover the RH shortfall but let their flood and housing insurance lapse due to lack of funds for 12 months over a year ago and then picked it up. Will they take the home or put a lien on it because the applicant had a lapse in insurance and so did not maintain insurance in perpetuity? Will the state thereby add another step to the unraveling of the rebuilding of S. Louisiana? 
What will OCD do about applicants who had no flood insurance for 2 months because Congress was late in reauthorizing the flood insurance program for new houses? Will OCD follow the letter of their covenant agreement and file a formal exception or will they continue to just informally adjust the rules as they like? 
What will former Housing Task Force Chairman Walter Leger say now about his previous statements to me and others, including at Housing Task Force meetings, that Road Home elevation grants were a way to “quickly” (his word) help homeowners who did not have enough money to rebuild given that now OCD is going after applicants who have accepted elevation grant money from RH (the $30,000) to finish the building of their home but did not have enough funds to elevate because they were short-changed on their grant? 
Does Mike Spletto have any recollection of how I, as a member of the Housing Task Force, publicly told him that these $30,000 RH elevation grants were going to be a form of entrapment for low-income or middle-income but financially stressed hurricane victims who needed the funding to repair their home and were not getting sufficient funding from their RH grant and so would use elevation money for house repair? 
Will Mike Spletto acknowledge the term, “personal pledge,” which he used over and over at LRA Board and Housing Task Force meetings to refer to the covenant for the RH elevation grant. What’s personal about OCD hounding applicants who did not elevate but used this HUD “compensation grant” funding for compensation for their hurricane/flood  losses that were so much greater than any “grant” or insurance benefit money they received? 
Have the OCD officials and state lawyer who wrote the letters they are sending to applicants forgotten that Option 1 applicants are allowed to sell their home so long as they advise the new homeowner about the covenant requirements (best done in writing) or did they purposely omit from their compliance letter and documents this way out of the covenant? 
Did Paul Rainwater conveniently forget that he told a prominent member of the media that the state would never go after applicants who broke the RH elevation convenant? 
  
I repeat from a previous newsletter the contact information for SLLS, which mainly serves individuals making less than 80% of the area median income. 
Rowena Jones, Managing Attorney 
Employment & Benefits Unit 
Southeast Louisiana Legal Services  
1010 Common, Ste. 1400A 
New Orleans, LA   70112 
  Intake # for Road Home problems: 
(504) 529-1000, ext. 242 
  
  
Best wishes, 
Melanie Ehrlich 
Founder, Citizens’ Road Home Action Team (CHAT) 
 
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