This article appeared first in Pro Publica
This article was produced in partnership with Verite, WWL-TV and The Times-Picayune The Advocate)
Homeowners sued by the state were living a “nightmare,” HUD Secretary Marcia Fudge said, worried they wouldn’t be able to pass their homes on to their children.
“I decided on my watch it was going to be over,” Fudge said. “The federal government is doing something that it has never done before for the people of Louisiana.”
U.S. Rep. Troy Carter, D-La., said in an interview that the news outlets’ reporting was instrumental as he tried to convince Fudge to find a way to stop the collection efforts.
“A program that was designed to pull people out of the storm should not put them back into the storm,” Carter said. “Unfortunately, Road Home did that to many.”
Dropping the lawsuits will allow people to go on with their lives, he said. “This gives us an opportunity to at least remedy as best we can the mistakes that were made.”
The state will halt collection efforts related to all Road Home grants and drop any liens placed on homes through the litigation. But people who made partial or full payments will not be reimbursed, officials said.
“There’s only so much we can do,” Carter said. “There won’t be an opportunity for a refund if you’ve already paid back.”
The state paused collection efforts in May after the news outlets found that a law firm it hired had accelerated the pace of legal filings. By then the state had collected about $5 million from 425 families.
Homeowners Offered Grants, but No One Double-Checked Eligibility
After an initial delay, the elevation grant program was launched in 2008, when the state sent letters to 40,000 homeowners telling them they could get $30,000 each to raise their houses to reduce flooding in the future. About 32,000 homeowners participated.
Once the state Office of Community Development received an application, it sent the money to homeowners, according to testimony in one of the lawsuits by Jeff Haley. He helped administer the elevation grant program as an official with ICF Emergency Management Services, the contractor Louisiana hired to run Road Home, from 2006 to 2009.
But no one double-checked before the money went out that homeowners were eligible or that their homes needed to be elevated, said Haley, who is now with the state Division of Administration. The state simply “didn’t have time,” he said. There was pressure to “get the funds out into the community as fast as possible.”
To get $30,000 grants, homeowners signed agreements promising to elevate their homes to reduce the chance of flooding. The state changed the rules several times to expand what the money could be used for, but by then many homeowners couldn’t prove how they had spent the money.
(Obtained by ProPublica, The Times-Picayune
