HUD announced on July 6 that it will pay up to $62 million as part of the settlement of the Road Home lawsuit. The funds will be used to assist some Louisiana homeowners whose Road Home Option 1 grant awards were based on pre-storm home values, and who consequently have been unable to rebuild. The state of Louisiana will distribute the funds through its new Blight Reduction Grant Adjustment Program. Approximately 1,500 homeowners are expected to receive compensation under the program.
Advocates and government officials characterized the Road Home settlement as an important but limited step in ensuring that Louisiana homeowners impacted by hurricanes Katrina and Rita are able to return to their homes, nearly six years after the storms devastated the Gulf Coast. Under the settlement, homeowners who received an initial payment through Road Home but who have not been able to fully rebuild due to low grant awards will receive additional funds. Homeowners who received low grant awards, but who used their personal savings, or took out loans to complete the repairs, will not be eligible for the assistance.
The Road Home lawsuit was filed against HUD and the then-director of the Louisiana Recovery Authority in 2008 by the Greater New Orleans Fair Housing Action Center (GNOFHAC) and the National Fair Housing Alliance (NFHA), both organizational members of NLIHC’s Katrina Housing Group, as well as by a group of African-American homeowners.
The lawsuit alleged that the Road Home program, which compensates homeowners for the cost of rebuilding their homes damaged by Hurricanes Katrina or Rita, discriminated against African-American homeowners by basing compensation on the lesser of either the pre-storm value or the cost to repair the home. Homes in African-American neighborhoods typically had lower pre-storm values than identical homes in other neighborhoods, due to institutionalized racism. Therefore, African-American homeowners received significantly lower levels of assistance than other homeowners and in many cases have been unable to rebuild their homes.
The full settlement agreement is available at: http://portal.hud.gov/hudportal/documents/huddoc?id=RoadHomeSettlement.pdf
Information on the Blight Reduction Grant Adjustment Program is available at: http://www.doa.louisiana.gov/cdbg/DR/News%20Items/APA51rel5-11.htm
The GNOFHAC/NFHA press release on the settlement is available at: http://www.gnofairhousing.org/pdfs/7-6-11_Road_Home_Settlement_Release.pdf
HUD’s press release on the settlement is available at: http://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advisories/2011/HUDNo.11-138