New report, same outcome—a program meant to help people post-Katrina and -Rita ended up swallowing millions of dollars and helping mostly those who got paid out of those millions:
Katrina cottages more expensive than similar housing, plus program took too long, audit says. nola.com/Times-Picayune, 2/26/2013.
Louisiana’s “Katrina cottages” program, which built 461 homes on a $74.5 million FEMA grant, took years longer to complete than estimated, and resulted in homes that were significantly more expensive than similar houses built by nonprofit groups, according to a report released Monday by the state legislative auditor’s office. In addition to the delays and costs of the program, the state completed fewer cottages than it planned and some of the houses had structural deficiencies that forced the families living in them to move out while repairs were made, according to the audit.
In part, the report blames the problems with the program on a lack of a clear goal for the program, which was intended to build houses that would serve as alternative sources of emergency housing and an intermediate-term housing solution for the area, according to the report.
Problems with the construction of about 34 of the cottages built in New Orleans and Lake Charles required their occupants to move out while repairs were made. Those problems included issues with subflooring, insulation and water leakage, according to the report.
In the end, the state spent about $69.3 million actually building the houses, $2.7 million on case management and $1.7 million administering the program.
And the report itself: Results of the Alternative Housing Pilot Program: Katrina Cottages [PDF], Audit Control #40110053, Performance Audit Services. February 2013.
• In its December 2011 report, the Department of Homeland Security Ofﬁce of the Inspector General (DHS-OIG) cited FEMA’s design and initiation of the AHPP as main causes of the problems encountered by the Katrina Cottages program. According to the DHS-OIG, the AHPP’s primary goals of developing “alternative sources of emergency housing” and serving as an “intermediate term housing solution for the Gulf Coast” conﬂicted one another. As a result, it was difﬁcult for Louisiana to build large numbers of innovative housing units in a short period of time in a cost-effective manner.
• Of the 461 cottages constructed, 361 (78%) were occupied, 81 (18%) had not yet been occupied, and 19 (4%) were unoccupied because of move-outs when the grant ended on March 16, 2012; all cottages were occupied by June 20, 2012, almost seven years after Hurricane Katrina made landfall. Obstacles to obtaining 100% occupancy of the cottages, as required by FEMA, included difﬁculties ﬁnding qualiﬁed disaster-impacted victims and selling the cottages to qualiﬁed occupants.
• Construction of the cottages extended 2.5 years past the original grant deadline of September 17, 2009; the state’s real estate developer incurred penalties for delays encountered at one of the 12 cottage sites. Because of delays in starting construction and further delays during construction, OCD/DRU requested and received from FEMA an extension of the grant deadline to March 16, 2012. All cottages were constructed by this date. As of November 21, 2012, OCD/DRU is in the process of imposing penalties on Cypress Realty Partners for delays for one site, but has yet to determine the amount.
• Two state agencies have administered the Katrina Cottages program since its inception, contributing to delays in program administration and contracting. The Louisiana Housing Finance Agency originally administered the program. In March 2008, program administration was transferred to the Louisiana Recovery Authority (LRA). The LRA then informally merged with OCD/DRU and the two entities administered the program. With the sunset of the LRA in July 2010, administration of the program was formally transferred to OCD/DRU.
• The average cost per site ranged from $121 to $176 per square foot, at least $53 per square foot more than housing of similar size and construction built by other nonproﬁt organizations. The average construction cost was $145,216 per cottage, not including land and infrastructure costs. However, the state had to follow other grant requirements, including steel framing and disability access, which may have contributed to the increased costs.
• Construction deﬁciencies at 34 (7.4%) of the 461 cottages at two sites led to occupants having to temporarily move out. Deﬁciencies at eight (23.5%) of these 34 cottages had not been corrected when the grant ended on March 16, 2012.
New Jersey, you getting that? And look out for any large, white male contractor named “Joe” from North Carolina. He ripped off my mother and about
a two dozen other people.