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Tuskegee University is an independent and state-related institution of higher education.  Its programs serve a student body that is coeducational as well as racially, ethnically and religiously diverse.

 


CBDG FUNDS


By: N. Baharanyi, R. Zabawa, A. Paris and P. Kanyi, Tuskegee University

     While Katrina affected a wide area along the Gulf Coast, including parts of Louisiana, Mississippi, and Alabama, New Orleans withstood the greatest damage. Floodwaters caused by failed levees destroyed the majority of housing in New Orleans and uprooted over 80 percent of its 450,000 citizens. Some of New Orleans poorest communities suffered some of the worst devastation, including the Lower Ninth Ward and the Florida/Desire neighborhood. Residents evacuated to other cities in Louisiana (Baton Rouge's population doubled shortly after the disaster), but also to Texas, Georgia, and ultimately, 44 states[1]. Katrina destroyed thousands of homes, businesses, and jobs, along with many of the city's hospitals, schools, and other community assets.

     Congress appropriated $16.7 billion for post-disaster needs in the form of Community Development Block Grant money. $1 billion of this money was designated to repair or replace affordable rental housing, including public and assisted housing[2]. At the same time, Congress gave the affected states what can be characterized as "unusual flexibility" in who could be served by CDBG funded programs. The standard CDBG requirement is that 70 percent of funds should benefit low-income people (defined as those earning at or below 80 percent of the local median income). However, Congress required that only 50 percent of the storm-related CDBG funds to serve this population[3].  Housing Urban Development was authorized to waive even the 50 percent requirement for "compelling need."

     The following were some of the programs[4] that were allocated the CBDG funds and were targeted to benefit the poor communities:

1) Road Home program ($6.35 billion) which was to compensate homeowners whose homes sustained severe or major damage due to Hurricanes Katrina and Rita.

2) Small Rental Property Repair Program ($869 million) which purpose was to provide gap financing for the repair of an estimated 18,000 rental housing units so that the owners will be able to charge affordable rents.

3) (LIHTC-CDBG Piggyback Program $552,410,000) which combined the resources of Gulf Opportunity Zone Tax Credits, CDBG Piggyback funding, available HOME funds, Section 8 project based housing vouchers, and leveraged private investments to generate between 18,000 and 33,000 of new or restored rental units of mixed income communities and ensure the restoration of rental housing in the most heavily impacted parishes. Eligible applicants were Developers applying for Low Income Housing Tax Credits.

4) Homeless Support and Housing ($25,900,000) CDBG funds were allocated to restore and expand capacity in hurricane impacted areas and provide assistance for persons and families that fall within the following groups: homeless and persons at-risk of becoming homeless who are low wage workers; unemployed; victims of domestic violence; low-income seniors; and/or low-income persons with any type of substantial disability (including physical or sensory disability, cognitive disability, chronic health problems, mental illness, or addictive disorders).

5) Small Firm Recovery Loan and Grant Program ($38 million) provided targeted assistance to small firms that are deemed to have a chance to survive, contribute to the economy, and maintain and create jobs. Funds would support low-cost loans on flexible terms, small grants to reimburse for tangible losses, and technical assistance to support the firms receiving the financial support.

6) Technical Assistance to Small Firms Program ($9.5 million) provided assistance to small firms, including nonprofits, that that have been adversely affected by the hurricanes and/or provide assistance to entrepreneurs or individuals seeking to start a new firm that would be located in the impacted area.

     As of March 2007, only $1 billion, just 6 percent of all the CBDG money had been spent, mostly in Mississippi. Housing Urban Department (HUD) spent another $3.8 billion on housing program between March and July, leaving 70 percent of the funds still unused[5]. Over $3 billion of the $5.4 billion CDBG funds allocated for Mississippi has been granted waivers from the requirement to serve the needs of low and moderate income residents. Only $1 billion has been devoted to programs that serve these same residents[6]. As of February 2008, it is approximated that less than $250 million from those programs has been paid out[7]. The recovery allocations that Mississippi has dedicated towards housing recovery have been disproportionately skewed towards homeowners and away from rental repair programs. Gov. Haley Barbour proposed diverting $600 million of the CDBG housing recovery funds to the expansion of the Port of Gulfport6[8]. CDBG funds targeted to replace the devastated housing stock in South Mississippi requires that residents be homeowners with homeowner's insurance who lived outside of the flood zone.  Most of those in East Biloxi did not qualify for CBDG funds programs because they could not retain sufficient insurance on their homes, lived inside the flood zone, or were renters[9]. In addition, translated information and outreach efforts regarding the complicated registration process for assistance programs has been sparse and inconsistent in the East Biloxi area. The number of homeless in New Orleans and Jefferson parishes has grown, now estimated at about 12,000 people. This is double the estimate homeless advocates had made before the flood, despite the drastic loss in city population as a whole[10]. At the same time, agencies that used to provide crucial services to the homeless have closed. Local advocates have sought money from Congress for permanent housing vouchers and other services, but are still await action on such measures. With rents increasing as much as 40 to 200 percent since the storms[11] few apartments are affordable to people making less than the median income for the area[12]. In fall 2007, FEMA estimated over 13,000 families were still in group trailer sites, and 31,000 families were still reliant on temporary housing assistance in distant cities[13]. Louisiana's Road Home program to assist homeowners has been crippled by delays and mismanagement, and it now faces a shortfall of as much as $5 billion[14].

     Federal lawmakers must step up to ensure home reconstruction programs in both Louisiana and Mississippi are fully funded, with sufficient resources to cover the region's escalating rebuilding costs. With billions of dollars in hurricane recovery funds still sitting untouched, the lawmakers must commit to identifying and removing bottlenecks that are preventing resources from reaching those most in need. Future CDBGs and other public funds should be targeted to low income and mid income people whose assets were the most devastated following Hurricane Katrina.  This includes those living inside the flood zone, those who were uninsured and underinsured, and those who were renters. Last but not least, there is need for technical assistance to be provided in an accessible location to help residents develop individual and neighborhood economic plans.


[1] Bring New Orleans Back Commission. "Action Plan for New Orleans: The New American City." Urban Planning Committee Report. New Orleans: Bring New Orleans Back Commission. 2006.

[2] Kromm C. and S. Sturgis.  "Blueprint for Gulf Renewal." Institute for Southern Studies. 2007. Available At: http://www.southernstudies.org/BlueprintShort.pdf

[3] Perry J. "Testimony of James Perry to Senate Banking Committee."  The National Low Income Housing Coalition: Louisiana Housing Alliance. 2007. Available at: http://www.nlihc.org/detail/article.cfm?article_id=4587

[4] Elkins S. "CDBG Disaster Recovery Program Descriptions." Division of Administration Office of Community Development: Disaster Recovery Unit. 2006. Available at:  Http://Www.Doa.Louisiana.Gov/Cdbg/Drhome.Htm

[5] Kromm C. and S. Sturgis. "Blueprint for Gulf Renewal." Institute for Southern Studies. 2007.  Available At: http://www.southernstudies.org/BlueprintShort.pdf

[6] Media Matters. "Media Ignored Mississippi's Use of Waivers to Redirect Funds Designated for Low-Income Katrina Victims." 2007. Available at http://mediamatters.org/items/200708300010

[7]Mississippi Development Authority. "Homeowner Assistance Program - Phase II."  2008. Available at: http://www.mississippi.org/content.aspx?url=/page/3525&

[8] Brown L. B., Joint Legislative PEER Report # 487. 2006. Available at: http://www.peer.state.ms.us/reports/rpt487.pdf , pp. 53-54.

 

[9] Uyen L. "The Invisible Tide: Vietnamese Americans in Biloxi MS." Community Development Fellow. National Alliance of Vietnamese American Service Agencies:  NAVASA. 2006.

[10] Turner A. M. and S. R. Zedlewski. "After Katrina: Rebuilding Opportunity and Equity Into the New New Orleans." Urban Institute. 2006.  Available at: http://www.urban.org/url.cfm?ID=311406

[11] U.S. Department of Housing and Urban Development (HUD).  "Economic and Housing Market Conditions Pre- and Post-Katrina: A Comprehensive Market Analysis Special Report." Washington, DC: PDR, 15. 2006.

[12] HUD User "Fair Market Rents," Data Sets, retrieved from http://www.huduser.org/datasets/fmr.html

[13] FEMA, "Federal Funding Tops Billions as Louisiana Recovers," Disaster

Information, retrieved from http://www.fema.gov/news/newsrelease.fema?id=33506

[14] Institute for Southern Studies. "Where did the Katrina money go?" from Blueprint for Gulf Renewal, Institute for Southern Studies. 2007.