WASHINGTON — About 1,400 black homeowners in the New Orleans area will receive $62 million in additional storm repair money under a legal settlement announced Wednesday by the U.S. Department of Housing and Urban Development and Louisiana’s Road Home program.
Under a class-action lawsuit filed in 2008 against HUD and the state, representatives of the homeowners contended that the Road Home grant formula discriminated against them because it was based on the home value prior to the storm.
Since most home values were lower than in more-affluent areas, the homeowners said they deserved more money.
“The Road Home in our opinion has been a road block for many New Orleanians,” said James Perry of the Greater New Orleans Fair Housing Action Center. “This was the best resolution we could reach with the money remaining in the program.”
A federal appeals court judge had issued an order freezing the remaining $148 million in the Road Home program as a result of the suit. The money announced Wednesday will help homeowners such as Lillian Baker, an octogenarian who lives in the Pontchartrain Park area of New Orleans.
Baker suffered $209,000 in damage from the 2005 storm but the value of the property before the hurricane was $84,000. That made Baker eligible for $54,000 from the program. On Wednesday, Baker said her home still remains partially repaired.
“More money is OK,” Baker said Wednesday. “I guess it will be good.”
The state tried to aid low- and moderate-income homeowners by lifting a $50,000 cap on its additional compensation grant program. The effort resulted in Road Home officials spending $450 million in grants to 46,000 homeowners.
The money announced Wednesday will come from the state’s Blight Reduction Grant Adjustment program. Commissioner of Administration Paul Rainwater said the Road Home tried to compensate those with disparities but welcomed the decision.
“This sort of closes a chapter in the Road Home program in a positive way,” said Rainwater, former executive director of the Louisiana Recovery Authority, which ran the program.
In all, the state paid $8.8 billion to repair properties of 129,000 homeowners. The award cap of the program was $150,000.
HUD Secretary Shaun Donovan announced the settlement Wednesday.
“The idea is to help those who don’t have the resources to recover,” Donovan said. “Many of these families have been struggling to rebuild.”
“Government hasn’t always gotten it right; we are determined to change that,” Donovan added. “This settlement will help Louisianians in their recovery and to get them home.”