[FoCHAT] CHATNews: Converting homeowner disaster relief federal money to state (and maybe to city) money

Thu Mar 25 12:29:26 CDT 2010

CHATNews, Mar. 25, 2010 
Dear CHAT Members, 
Topics: 
1. Converting homeowner disaster-relief federal money to state money 

2. Is the NOLA Mayor-Elect Mitch Landrieu Trying to Convert Federal Money for Disaster Victims To City Money Leaving Shortchanged RH Applicants Stranded? 

3. WDSU I-Team: Few Receive Money To Raise-and-Rebuild Homes 

4. Chinese Drywall 
______________________________________________________________ 
1. Converting homeowner disaster-relief federal money to state money 
http://www.nola.com/politics/index.ssf/2010/03/few_road_home_elevation_grants.html 
Re: Few spend Road Home elevation grants to lift houses, HUD inspector says
As a member of the LRA Housing Task Force, I publicly asked state officials during a 2008 meeting of this committee to consider that they were luring financially desperate middle- and low-income applicants into accepting the Road Home elevation grant by giving them the money up front with only their written pledge to elevate their homes. One answer given publicly was “You don’t expect ICF (the main Road Home contractor) to be able to monitor a program where people are reimbursed for costs, do you?” The answer given privately by a top official was “We won’t go after the applicants for compliance with these elevation grants.” 
The last statement could reflect the fact that state officials know that huge numbers of applicants never got enough money to repair or rebuild from Road Home grants and insurance benefits. According to a Louisiana Legislative Auditor’s report (January 2009), more than 22,000 applicants disputed their pre-storm value calculation for grant determination and about half of these were put in limbo by ICF staffers not marking the application as being in dispute.  Very many other applicants unsuccessfully disputed mistakes in damage determination and insurance benefit deductions. 
The big question is what will the grant recovery money be spent on? According to public testimony from state officials at the last Housing Task Force meeting, it will be added to the state funds of the Office of Community Development. So, grantees whose homes were ruined due to federal levee failures and who got insufficient grant money to elevate (or repair) their homes will be asked to turn over their federal assistance funding  to a state coffer, with no legal stipulation that the money be spent on disaster victims. Terribly unfair. 

2. Is the NOLA Mayor-Elect Mitch Landrieu Trying to Convert Federal Money for Disaster Victims To City Money Leaving Shortchanged Applicants Stranded? 
Is this an attempt to unfairly funnel more RH money to contractors, now including nonprofits, instead of to applicants who have been shortchanged? (More on this in a later newsletter) 
  Please think about the definition of blight.

There are plenty of long-term jungle lots that merit that term. There are those who can afford to fix their property but just snub their neighbors. 

However, what about those who abandoned their house (and only equity and property) mid-way in repair or never got started to repair their home.

How many of them had been promised a Road Home compensation grant that suddenly and wrongfully became much smaller at closing. 

Were they promised a Road Home additional compensation grant for economically disadvantaged applicants and then, by a tricky new rule hidden from the public about income redetermination (announced by Mike Spletto, former head of Housing for OCD at an LRA Housing Task Force Meeting), much later labeled no longer income-eligible? The list of unfairness that is preventing rebuilding, repair, and safe rebuilding is much longer than this.

http://www.nola.com/politics/index.ssf/2010/03/mitch_landrieu_ready_for_city.html 
Mitch Landrieu ready for city to penalize owners of unrepaired homes
By Frank Donze, The Times-Picayune 
March 13, 2010

As Hurricane Katrina's fifth anniversary draws closer, Mayor-elect Mitch Landrieu believes the time is long past due for a City Hall crackdown on storm-damaged structures that mar recovering neighborhoods.

Asked at a news conference this week at what point in time will it no longer be sufficient for property owners to merely board up vacant buildings and keep the grass cut, Landrieu deadpanned: "Now would be good."

Landrieu noted that unlike New Orleans, some surrounding communities already have established "cut-off dates'' to repair property or face harsh penalties.

"I don't know that this city has ever said, OK, this is it,'' he said.

"Well, I think we can safely say that five years later we're at the point now where code enforcement has to be very aggressive - that just boarding up your house is not consequential.''

Before he takes office in May, Landrieu said he plans to meet with Louisiana Recovery Authority officials to discuss redirecting some of the unallocated federal dollars under the agency's control toward blight eradication for an inventory that still hovers around 60,000.

"We have to get after that and we have to be very, very aggressive about it,'' he said, adding that city officials must begin to show more concern for the neighbor next door to the blighted property than for the person who owns it.

"At some point in time, enough is enough,'' Landrieu said. "I think it's fair to say that time has come.''

Frank Donze can be reached at fdonze at timespicayune.com or 504.826.3328. 

3. WDSU I-Team: Few Receive Money To Raise-and-Rebuild Homes 

http://www.wdsu.com/video/22848214/index.html 

According to the news video, only 4 have received the complete HMGP grant funding to raise their homes. 

4. Chinese Drywall 
Chinese drywall guidance offered by National Association of Home Builders 
By Rebecca Mowbray, The Times-Picayune 
While the U.S. Consumer Product Safety Commission dallies on instructing people how to fix homes damaged by corrosive drywall, the National Association of Home Builders has become the first major player to advance its own set of "evolving solutions." 

The guidance to builders nationwide comes as the national consolidated litigation over problem drywall in U.S. District Court in New Orleans proceeds swiftly toward figuring out how to repair homes. Federal efforts to find effective ways to fix homes, meanwhile, have been thorough but too slow for many impatient families living in homes where hydrogen sulfide gas is making them sick and corroding metal appliances, fixtures and wiring.

Remarkably, the repair procedures outlined by the home builders are similar to what the committee of plaintiffs attorneys has proposed in Judge Eldon Fallon's courtroom in New Orleans. Rather than some cheaper air-filtration and drywall treatments that others have suggested, the home builders association advocates ripping out drywall, plumbing and possibly wiring, paying for families to temporarily relocate, and allowing homes time to air out after being gutted. 

Read the complete article at the link below: 
http://www.nola. com/business/ index.ssf/ 2010/03/chinese_ drywall_guidance _offer.html 

Chinese Drywall Trial Goes to the Judge 
Monday, March 22, 2010 7:23 PM 
From: 
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To: 
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http://www.courthousenews.com/2010/03/22/25752.htm 

Chinese Drywall Trial Goes to the Judge
By SABRINA CANFIELD 
NEW ORLEANS (CN) - The Chinese manufacturer whose defective drywall "shattered the dreams" of a young family by corroding plumbing and wiring should pay to restore the house, the family's attorney said in closing statements Friday in Federal Court. "Let's just give them the house that they had, that they built until they installed the defective Chinese drywall," the attorney said. 
     Chris Seeger, representing Tatum and Charlene Hernandez, asked U.S. District Judge Eldon E. Fallon to approve a $200,000 remediation plan for the home.
     Attorneys for Knauf Plasterboard Tianjin Co. said $200,000 is too much to ask, and disputed the claim that gases emanating from the drywall ruined wiring, plumbing and appliances. Knauf proposed a remediation plan costing $58,000. 
     "They are not entitled to costs beyond what is required to restore the house to its original condition," Knauf attorney Donald Hayden said, after expressing sympathy for the Hernandezes' ordeal. 
     But Hayden added, "They want $200,000 for a house that was built for $175,000 in 2006." 
     Attorneys for both sides agreed that Knauf should remove all 180 drywall panels installed when the house was completed in 2006. 
     Seeger said that while there is not a "ton of evidence" that wires and circuit boards will continue to corrode once the drywall is removed, they might. He asked the judge to err on the side of caution.
     This was the second test trial against a Chinese manufacturer, alleging that corrosive gases leaked from drywall. It is part of multidistrict litigation to help determine property damage issues in similar cases. 
     More than 2,100 people nationwide have filed federal claims for faulty drywall. The Hernandezes' trial lasted one week. 
     Homeowners' insurers have virtually unanimously refused to cover claims for corrosion from Chinese drywall, leaving homeowners to fend for themselves. 
     In Louisiana, because of a 1996 pro-business law pushed by then-state Rep. (and now-U.S. Sen.) David Vitter, homeowners suffering damages from Chinese drywall have no remedy other than suing the manufacturers. 
     "We threw the consumer under the bus, under the purview of, 'Hey, this will attract business to Louisiana,'" state Sen. Julie Quinn told the Times-Picayune. "We say, 'Sorry, you're going to have to sue the manufacturer in China.' That puts people in Louisiana at a huge disadvantage. ... All we did was hurt the consumer.'" 
     Tulane Law School Professor Alan Childress told the newspaper that under litigation rules before the 1996 pro-business reform, even if a company played only a small role in harming consumers, it could be held responsible for 100 percent of the damages. That party, in turn, could sue companies further up the chain. 
     Today, the only course of action for the homeowners is to go straight to the Chinese manufacturers. Knauf Plasterboard Tianjin Co. is one of only a few Chinese manufacturers that responded to complaints from U.S. consumers. 
     Proponents of the 1996 tort reform said the old system was unfair. But those working with consumers on Chinese drywall issues today say the old system could have provided consumers the money they need to rebuild, while leaving the manufacturers to settle with each other. And, they say, the old system provided more incentive for companies to be sure they sell safe products. 
     Under the present system, Childress said, companies must pay the portion of the fault assigned to them. If the court decides the Chinese manufacturers are responsible for 80 percent of the drywall problem, while the U.S. companies that handled the product are responsible for 20 percent, and the plaintiffs sue only the Chinese manufacturers, they can recover only 80 percent of their losses. 
     Childress told the Times-Picayune in September, "If for some reason I can't collect money from there, I'm out of luck because I can't look to the other defendants to pick up the slack." Childress called the 1996 legislation "a very pro-defendant, pro-corporate change in the law." 
     The Louisiana Association of Business and Industry says the federal government should bail out homeowners since it allowed the faulty drywall into the country. 
     Last week, Florida Gov. Charlie Crist asked FEMA for emergency disaster assistance for homeowners whose houses have been ruined by Chinese drywall. FEMA has said it will not offer help. 
     Judge Fallon's ruling is expected in April.  

Best wishes, 
Melanie Ehrlich 
Co-Chairman, Citizens’ Road Home Action Team (CHAT)  http://chatushome.com 
Member of the LRA Housing Task Force 
Comments:   http://www.chatushome.com/blog/?p=64   

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