Since the confused
start of the post-Katrina rescue and relief effort, the federal
government has provided mixed signals on how it intends to provide
housing assistance to the hundreds of thousands of displaced Gulf
Coast residents. Temporarily sheltered in sports arenas, convention
centers, armories, and church basements in locations far from their
homes, most of the aid-dependent evacuees lacked the financial
resources and mobility to facilitate their own rescue and relief.
With the region's displaced poor temporarily secured in cavernous
public facilities, the next stage of the housing assistance effort
is to move them to more private and home-like accommodations until
they are able to return to their neighborhoods and rebuild their
lives. How to do this, however, has been the subject of intense
debate over the past three weeks, and at times the debate has taken
a troubling coercive turn, as some try to limit assistance to
require the displaced poor to return to their communities, whether
they want to or not.
The False Promise of
Trailer Parks
In the first days
of the recovery effort, Federal Emergency Management Agency (FEMA)
officials talked glowingly about a housing relief effort that
relied upon the acquisition of tens of thousands of movable living
units that would be shipped to affected areas, much as was done in
the aftermath of several past disasters, most recently Florida's
Hurricane Charlie in 2004. In the days following Katrina's sweep
through the Southeast, FEMA leased three cruise ships for a
period of six months, at total cost of $236 million, and is
reported to have purchased hundreds of costly recreational vehicles
and thousands of mobile homes and trailers. As quickly became
obvious, these physical units would have to be delivered, one at a
time, over long distances; once in place, they require the services
of a plumber and an electrician to connectto public utilities, many
of which have yet to be restored in the damaged areas. As a result,
eligible households would have to wait for long periods of time for
housing assistance.
A Better
Way to Help
A broad coalition
of public policy organizations, ranging from the Heritage
Foundation and Hudson Institute on one side to the Brookings
Institution and the Center for Budget and Policy Priorities on the
other, criticized the Administration for its reliance on costly and
unattractive physical units that would be crowded together in
remote locations. They instead urged the government to use an
existing federal housing program operated by the Department of
Housing and Urban Development (HUD): housing rent vouchers and
certificates. Rent certificates were used in California in the
aftermath of the 1994 Northridge Earthquake.
Created in the
early 1970s as a substitute for the expensive and troubled public
housing program, HUD rent certificates are now the leading form of
housing assistance that the federal government provides to low
income households. Operating much like food stamps, a housing
certificate possesses the value of the community's "fair market
rent" and allows a family holding one to use it to rent the type of
apartment that best suits its needs in the neighborhood of its
choice, subject to an upper limit on cost that varies from
community to community based on the cost of living. At present, the
national rental vacancy rate is just over 10 percent-near the
highest in history and the vacancy rate in the South is even
higher-reflecting a record number of vacant rental units across the
country. According to the U.S. Bureau of the Census, 44 percent of
these vacant units are being offered for $599 or less per month, a
sum certainly below the cost of acquiring and disposing of tens of
thousands of mobile homes.
Professor Edward Olson of the University of Virginia, one of the
country's leading housing experts, notes that there are 1.1 million
vacant rental units in the South that rent for less than $700 per
month.
With rent
vouchers, the relief effort can use the hundreds of thousands of
vacant units in the region to provide attractive and cost-effective
temporary shelter to those whom Katrina displaced. Importantly,
rent vouchers will allow the evacuees to remain in the social and
economic mainstream-in contrast to what would confront them if
relocated to trailers parked in remote, isolated rural areas . With
vouchers, evacuees will be able to live in real neighborhoods with
nearby schools, jobs, stores, medical facilities and
transportation. And when their former communities are ready for
their return, the rent voucher can easily be canceled with no
further financial obligation on the part of the government.
The Federal
Government Vacillates
In response to the
criticism of its initial proposal, the federal government announced
that vouchers would become the main avenue of housing assistance
for evacuees and that the physical units already acquired would be
used to house relief and reconstruction workers. In his September
15 address to the Nation from Jackson Square in New Orleans,
President Bush made note of this change in policy and stated,
"We're providing direct assistance to evacuees that allows them to
rent apartments." As part of the voucher plan, the Houston Housing
Authority provided temporary vouchers for 10,000 apartment units
under the city's Katrina Housing Task Force. As of September 19,
9,000 evacuees in the Houston area had signed up for the rental
assistance.
Despite the
President's promised shift from mobile units to rent vouchers, FEMA
continued to insist that, with the exception of Houston, the
housing relief strategy would rely on mobile homes, trailers, and
RVs. On September 17, two days after the President's speech, FEMA
reported that it had placed more that 1,300 trailers in 13 Alabama
state parks.
And according to an Associated Press story, on September 19-four
days after the President's promised policy shift-FEMA spokesperson
Nicol Andrews said that "at least 30,000 travel trailers would be
ready in Louisiana by October 18, with another 170,000 to be
installed soon after."
On September 20, FEMA's detailed housing resource inventory for the
region listed no vouchers or rental assistance beyond the 9,000 to
10,000 vouchers in Houston.
Coercing the Poor to
Return Home
Despite the severe
social and cost disadvantages inherent in a housing relief program
based on scores of trailer parks established in remote locations,
FEMA appeared determined to implement a strategy that would compel
low-income evacuees to accept housing aid only within their home
states. In part, this strategy may stem from concerns that many of
those receiving assistance may not choose to return to New Orleans
or the other damaged communities along the Gulf Coast unless
coerced to do so.
As press reports
have noted and at least one poll has confirmed, many of the low
income evacuees now lodged in other metropolitan areas have become
attached to their new communities and desire to start over in them,
rather than return to the Gulf Coast. Perhaps reflecting this
concern and fearing a permanent loss of constituents and voters,
Louisiana's congressional delegation has reportedly attempted to
alter legislation related to federal relief efforts to limit some
assistance to only the displaced who remain in their home state or
return from an out-of-state shelter. On the issue of providing a
tax credit to help the displaced find employment, a spokesman for
Rep. William Jefferson (D-LA) explained, "My boss sees this as less
a matter of individual relief than part of an economic revival
package to repopulate the city." More bluntly, Rep. Jim McCrery
(R-LA) said, "If evacuees decide they want to stay in Houston,
Texas, why should we pay an employer to give them a job when we
need people back in New Orleans?"
Obviously, giving
evacuees access to housing vouchers that can be used in any
metropolitan area in the nation will increase the likelihood that
many will chose not to return. With vouchers, they will have access
to better housing than they had in the slums of New Orleans and
will have the choice to remain in communities where they can
improve their standard of living and quality of life. Compared to
the depressed living conditions and low wage jobs that
characterized their life in New Orleans, the likelihood of better
job opportunities in Houston, San Antonio, and Washington, D.C., to
name just a few of the cities providing shelter, is a compelling
choice and will deter many from ever returning to the Gulf
Coast.
On September 23,
the White House attempted once again to clarify its views on
housing assistance, again announcing that rental assistance such as
vouchers and certificates will take the lead. Despite several weeks
of fits and starts, it looks as if FEMA and the White House have
finally conceded the issue and enlisted the assistance of HUD to
help in the provision of $625 million in housing assistance-much of
it through rent vouchers-to those displaced by the storm. This
latest effort began on September 24 and those eligible for aid will
receive $2,358 for three months rent in the apartment of their
choice.
It remains to be seen, however, whether a resistant, still enamored
of remote trailer parks, FEMA ultimately goes along with this.
The Cost of Doing
the Wrong Thing
Settling this
issue in favor of a voucher-based housing assistance program will
have profoundly important implications for the future of the relief
effort and for the well-being of low-income households who will
need some form of housing assistance over the coming months.
Notwithstanding New Orleans' Mayor Ray Nagin's optimism, it will be
a long time before the city is able to offer jobs and housing to
all who once lived there. With much of the damage to the housing
stock concentrated in low-income communities, many of the displaced
have nothing to move back to. And because many of the displaced
poor were renters, reconstruction efforts may not accommodate the
interests of the city's displaced poor renters.
If the displaced
poor are housed in remote trailer parks and remain wholly dependent
upon federal government support for food, housing, education, and
health care for the full time that it takes to rebuild New Orleans,
these facilities will become places of festering unhappiness. They
will no doubt come to symbolize the failure of the relief effort,
just as they have in recent weeks with some 1994 Charlie
evacuees still living in trailers. While such places were once
labeled "Hoovervilles," those now being organized by FEMA would
likely take the name of the current President.
The result would
be a new federal commitment to construct public housing in New
Orleans and other wrecked cities as quickly as possible. There
would be a mad rush to return isolated evacuees to troubled cities
that would offer the poor even fewer economic and educational
opportunities than before Katrina. Despite the federal government's
efforts since the early 1970s to extract itself from the failed
public housing program, and the sordid history of corruption and
incompetence that has characterized the New Orleans Public Housing
Authority, desperate politicians facing uncertain election
prospects in November 2006 will be falling all over each other to
do the wrong thing. And then expect the media to pile on about the
failure of the federal government to create jobs for those coerced
to return to a city still on life support.
Lessons Learned
While the
government made the right choice in the end (unless FEMA is more
intransigent than it appears at the moment), it took more than
three weeks for that to happen. It should not take a national
catastrophe and public criticism to induce that outcome. As has
been apparent, the Katrina relief efforts of all levels of
government left much to be desired in the first few weeks, but it
is reassuring to see that the appropriate measures and policies are
being implemented, at least in the area of housing assistance.
Once the current
emergency is under control and the federal government can consider
how to restructure FEMA, one potential reform would be to team
task-specific FEMA staff with those in related federal agencies to
determine in advance the federal response to a variety of different
emergency scenarios and how the full resources and talents of the
federal government can be applied to any relief efforts. For
example, HUD gave up on providing physical housing units in the
1970s and shifted its efforts to vouchers. Had HUD staff been more
closely involved in FEMA planning, the cost and delay of relearning
50 years of lessons could have been avoided.
There are many
other aspects of the relief and rebuilding effort in which FEMA
will be involved. Hopefully, the lessons learned from its several
false starts in housing will encourage it to seek out the advice
and counsel of others in the federal government, the private
sector, and the academic community before committing itself to
specific courses of action.
Ronald D. Utt, Ph.D.,
is Herbert and Joyce Morgan Senior Research Fellow in the Thomas A.
Roe Institute for Economic Policy Studies at The Heritage
Foundation.