[FoCHAT] CHAT: Closing Docs, Tax Problems, Elevation Knots, ICF data

Sun Sep 30 08:38:00 PDT 2007

Dear Concerned Citizen,

  1. After many months of advocacy by CHAT, the closing documents have been posted this weekend at the Road Home website: 
  http://road2la.org/homeowner/resources.htm#closing

  2. We are looking for people who want to do a little bit of work with CHAT about unfair taxation issues related to declaring structural damage losses and then receiving a Road Home grant. If you are interested, please write to chatlra at yahoo.com and put Taxes and Road Home in the subject line and your name, email, city, and phone contact info in the subject.

  3. CHAT members (KC King, Shawn Antee, Peg Case, Melanie Ehrlich) of the Working Group of the LRA Housing Task Force (HTF) have been requesting since the Working Group's inception in June that details about the elevation allowance problems be made available to the public. Thanks to Walter Leger, Chairman of the Housing Task Force, these facts were disclosed at the HTF meeting last week and thanks to David Hammer, Times-Picayune reporter, they are now out in the public domain. We hope that Road Home officials will now be aided by the public's awareness of these problems to succeed in getting a meaningful and fast, rather than outragously complicated and exclusionary method for distribution of elevation allowances. 

  Sept. 30, 2007 Times-Picayune, David Hammer, People who elevated their homes may be left high and dry
Steve Donahue did what he was supposed to do: He and thousands of other New Orleanians raised their flood-prone homes. But in doing so, they may be ineligible to receive thousands of dollars in Road Home grants intended to help elevate their houses. Donahue and thousands of other homeowners find themselves unwittingly caught in a complicated 14-month debate between state and federal officials over how Louisiana can legally spend $1.1 billion in “hazard mitigation” money

Louisiana initially had hoped to use the money in a way it claims federal officials supported: to stretch Road Home money by using hazard mitigation money to pay applicants who opted to take a state buyout on homes located in the most vulnerable areas. But the plan ran afoul of federal rules because Louisiana wanted to first use the hazard mitigation money to get homeowners paid, then later declare which properties it wished to remove from commerce forever once it had enough of them clustered in one place to justify such decisions. 
Yet identifying those properties before buying them is a daunting task in a city where one property owner may want to sell to the state but a neighbor may intend to rebuild. State officials feared an outcome in which the federal government essentially mandates patchwork green space—houses mixed with vacant property that could never again be developed. 
Louisiana Recovery Authority Executive Director Andy Kopplin said White House recovery coordinator Donald Powell knew how the state planned to use the hazard mitigation money in its Road Home program, and that Powell promised to help get the money released. Powell said he did not agree to help the state shoehorn the money into the Road Home program in ways that skirt federal guidelines. 
Powell’s spokesman, Evan McLaughlin, said the White House and the state did agree that the hazard mitigation money was “an appropriate and separate source of funding for elevations and green-space buyouts. Many months later, the Road Home program was created with rules that violated the 
 law.” 
For about 14 months, the state continued to seek the $1.1 billion to buy properties in the most vulnerable areas and FEMA repeatedly rejected the application. Louisiana finally gave up and re-applied for the money earlier this month, this time asking to use it for Road Home recipients’ elevation projects. FEMA said it expects to approve the application after the state answers a few technical questions. 
If FEMA approves Louisiana’s application, the state plans to send a letter to all 78,000 Road Home applicants who live inside the 100-year flood plain, notifying them of the new elevation grant program and telling them how to apply. 
That could help as many as 49,000 Road Home applicants who qualify for elevation money and haven’t done any of the work yet. Moreover, the new applicants may be able to collect the full cost of raising their house to the base flood elevation, work that often runs $50,000 or more. 
Yet those who already raised their homes would not even be able to collect the $30,000 maximum they expected through the Road Home program. 
The problem lies in the reviews that FEMA says must be done before it can pay for each rebuilding/elevation project
The strings attached by FEMA’s interpretation of its rules likely mean that the elevation money will come very slowly, and only to those homeowners who have been unable or unwilling to start rebuilding. 
And there’s the larger financial impact of this new plan. The Road Home program is facing a budget shortfall estimated between $5.6 billion and $6.6 billion. The state needs the $1.1 billion in FEMA hazard mitigation grants to reduce that deficit and make it easier for Congress to swallow a smaller but still uncertain bailout of $3.5 billion to $4.5 billion. 
The state estimates that elevation costs for all Road Home recipients ultimately will be $1.6 billion, but FEMA can pay for house-raising projects only in small batches, meaning that little of the $1.1 billion will flow to the state by the end of the year, when its Road Home program is expected to run out of money. 
NOTE: Steve Donahue and KC King are members of CHAT. KC is also a member of the Working Group of the Housing Task Force and of the LRA Housing Task Force and the leading advocate for restoration to elevation allowances by a rational method without more delay. Steve is our lead advocate at the Board meetings of the Road Home Corp. (recently renamed the Lousiana Land Trust) helping to protect the rights of the communities in which Road Home-acquired land resides. The issues at stake include maintenance of properties and land-use decisions, which impact those not part of the Road Home Program as well as applicants and grantees. Please join Steve in this effort.
http://blog.nola.com/times-picayune/2007/09/people_who_elevated_their_home.html

  4. From the same HTF meeting came the following article.

  9/26/07 Times-Picayune, David Hammer, Road Home has money to pay grants expected to be issued this year 
http://blog.nola.com/times-picayune/2007/09/road_home_has_money_to_pay_gra.html
Ehrlich, among others, dispute the veracity of those reports by ICF that claim all dispute cases older than 60 days have been resolved, in compliance with another of its contractual requirements. 
“The reports say no applications are in resolution more than two months, but I have application numbers here of people who are in resolution for many, many months, more than six months,” Ehrlich said. “To determine shortfall, we need to know how many are really in dispute resolution.” 
Another problem, according to testimony by Davida Finger, a lawyer who represents dozens of Road Home applicants through the Loyola University Law Clinic, is that applicants often complain about some part of the grant calculation and are never put into ICF’s resolution process, and, if they are, the company may decide their dispute is resolved without ever informing them.
  One of Finger’s clients, Gary Schwartz of Chalmette, disputed the prestorm value of his home used in the award letter he got on Dec. 2, 2006. The Road Home had used automated valuation methods to come up with a home value of $124,000. Schwartz paid $325 for a certified Louisiana appraiser to inspect his home in person, which yielded an appraisal of $163,000. He sent that in on May 11, only to find out the Road Home couldn’t accept it because it was more than 20 percent higher than their computerized estimates.
  He hadn’t gotten anywhere in the 100 days since, but the Road Home suddenly decided to switch him out of resolution and into “pre-closing.” Schwartz says that’s impossible because he never had his dispute resolved and he never chose an option to rebuild or sell his house, which is mandatory for an application to go to closing. 
Finger estimates that at least 30 of her clients are having similar problems and have been in dispute resolution or appeals for long periods without understanding their status.
  None of these cases appear to be reflected in the public reports the Road Home makes on the progress of resolution cases. Also, Finger said her clients have been consistently denied access to their own files, making it impossible for them to figure out where the dispute lies.
  “It’s just fundamental due process that people need to know what these decisions are based on,” Leger said. “Until then, you know you have a problem, but you don’t know what you’re arguing.” 
NOTE: Davida Figner and Gary Schwartz are members of CHAT. Davida is a staff attorney of the Loyola Law Clinic. Gary is a hard-working citizen concerned not only with his rights, but also the rights of many thousands of Road Home applicants with problems related to ICF's determination of pre-storm value.
http://www.nola.com/news/t-p/editorials/index.ssf?/base/news-4/1190876555120200.xml&coll=1

  5. If you are in the NO metro area and available, please join us at our weekly meeting on Wed. 

  UNO Old Bus. Admin. Rm. 212 on Wed. 6:30 PM.
  Directions to the Business Bldg  are given on the Campus Map for UNO. The URL is http://www.uno.edu/university/maps/maincamp.cfm. The Business Bldg is #7 on the map.

  If you are not a member of our email network and care about Louisiana's rebuilding efforts, please sign on (no-dues, only a few informational emails a week, only name and email address required). 

  http://chat.thinknola.com

  Best wishes,

  Melanie Ehrlich
  Founder, CHAT

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