WASHINGTON – Tuesday is the deadline for thousands of Louisiana homeowners to apply to a $6.4 billion government-backed fund that provides up to $150,000 per applicant to save or rebuild homes damaged and destroyed in the 2005 hurricane season.
The Road Home program, which so far has given out $2.66 billion, has already tabulated benefits for 102,800 applicants, 35,800 of whom have gone to closing. Each applicant can receive as much as $150,000 for rebuilding, although the average payment is closer to $74,000.
In St. Bernard Parish alone — Ground Zero in the 2005 hurricane season — Road Home has tabulated benefits for 12,711 applicants. But for David Peralta, the chief administrative officer for the parish — which is like a county in most other states, Road Home has been at once a source of hope and frustration.
"I think the intentions were great. But the management was — and is — horrible," Peralta said earlier this month in a telephone interview. "The company who's running it, they just have not done their jobs."
A spokeswoman for the private contractor hired by the state of Louisiana to locate eligible recipients and administer and distribute cash said her organization is doing its best in difficult circumstances.
"It's been a challenge for all of us," said Gentry Brann, of ICF International, adding that the company is working as fast as it can given several external limitations.
Peralta is mostly light-hearted despite losing his own home along with the 27,000 others in his jurisdiction that were destroyed or damaged two years ago by hurricanes Katrina and Rita. He remains easy-going until he starts talking about the housing-assistance program, the single biggest rebuilding program taken on by the federal government in conjunction with state and local officials.
Nearly 100 percent of all buildings were damaged or destroyed in St. Bernard Parish, wiping out 1,200 businesses. A massive oil spill that happened during the storm further slowed reconstruction efforts after a federal lawsuit was filed and remained unresolved until last month.
Electric utility use suggests St. Bernard Parish may have up to 28,000 residents, up from 15,500 this time last year, but fewer than half the 65,100 who populated the community the year before that.
Peralta said he thinks the workforce is back up to half of what it was before Hurricane Katrina. Still, St. Bernard is doing without a hospital.
But, he noted, homes that have been rehabilitated are selling better than pre-storm values and business — especially connected to rebuilding — is going as well as can be expected, particularly since the Road Home program has been fraught with problems.
Among the biggest complaints about Road Home is its slow start. The program didn't start taking applications until last August, a full year after Katrina came ashore. ICF International wasn't hired until mid-2006, and recovery policymaking rests in a separate office in the state government than recovery implementation.
Brann said reality has eclipsed earlier estimates for the program's needs. The state had estimated 125,000 individuals would apply, but by the end of June this year, applications had surged 20 percent beyond that to 150,000, meaning nearly 50,000 applications haven't even been processed yet.
Brann said her organization could keep taking applications for months and still have work to do. But state and federal budget limitations are basically forcing the July 31 deadline for homeowners to apply to the program — although renters still will be able to apply for a limited time afterward.
"It's a hard deadline. ... Based on the budget issues, that's a very hard deadline," Brann said, adding: "At some point, there won't be money left in the bank to disperse."
Even though the program recently received a $1 billion infusion from the Louisiana government, it still would face a $5 billion shortfall if everyone eligible applied, according to The Associated Press. The bulk of the money comes through the Department of Housing and Urban Development's Community Development Block Grant program.
The program also has several levels of administration for applicants to sort through. After initially seeking relief, applicants must personally meet with program officials, then indicate which of three options they're choosing: staying at their original property; moving, but staying in state; or moving out of Louisiana altogether.
If the applicants qualify for money, they're sent a letter indicating the award they can receive. But according to Peralta, they can't get the money in hand until they've first responded to the letter and followed up with a disbursal officer, a situation complicated by the ratio of officers to applicants.
Peralta said one personal experience with the program left him furious.
In June, he was called up to finalize his paperwork for his $80,000 in recovery funds. ICF told him to go to a local hotel for a noon appointment. But when he arrived, he said about 500 others were ahead of him — including elderly — and another 500 had been invited for closing paperwork.
It was a hot day, and the line snaked outside. Once inside, the hotel had no air-conditioning and only 20 notaries were there to handle the paperwork, he recalled.
"How can you bring in 20 people to do closings? ... You can't be putting people through this," Peralta said.
He left — "it was a principle thing with me" — and set up his own appointment with ICF officials later in the week. But he said plenty of people in line that Saturday wouldn't have had that opportunity and might have been put in the position of giving up on the cash they needed because they couldn't deal with ICF's schedule.
Brann said ICF was doing its best in the waning days of the program to reach out across the country to anyone who might be eligible. In what she called "a large group closing," Brann said ICF closed over 1,500 cases in one day. Referring to the incident that Peralta recalled, she said that the hotel ballroom was cooled and snacks and drinks were provided.
She said that 800 cases were closed in that spot on that day and noted that many showed up earlier than their scheduled appointments. Some who showed up did not have appointments at all, "creating a bit of chaos."
"Some people had to wait an hour or more for their closing. ... Without exception, the homeowners left happy," Brann wrote in a follow-up e-mail, noting that on average they received checks for $70,000.
Despite his feelings about how that day was handled, Peralta said he has no sympathy for those not making Tuesday's deadline.
"If you haven't signed up for that program by now, it's your fault."