Housing Aid Called Too Much, Too Little

Benicha McCraney, who moved from New Orleans to the Houston area, is worried about paying the bills despite aid from FEMA.
Benicha McCraney, who moved from New Orleans to the Houston area, is worried about paying the bills despite aid from FEMA. (Photos By Nikki Kahn -- The Washington Post)
By Spencer S. Hsu
Washington Post Staff Writer
Wednesday, October 12, 2005

The Federal Emergency Management Agency's evolving efforts to shelter Hurricane Katrina victims continue to waste huge amounts of taxpayer dollars and could soon leave many evacuees short of money and facing eviction, according to renter advocates and housing industry officials.

The concerns focus on FEMA's extension of an $8.3 million-a-day program to house 549,000 people in hotel rooms beyond an Oct. 15 deadline and its handling of a new rental assistance program, which offers displaced families a lump sum of $2,358 for three months' rent. The disaster agency has previously drawn criticism for its troubled $1 billion-plus effort to house hurricane evacuees in 125,000 trailers.

The National Low Income Housing Coalition, an advocacy group, said that because the rent program is based on the $786-per-month national median rent for a two-bedroom apartment -- rather than city-by-city rates used by the Department of Housing and Urban Development -- many evacuees taken to more costly cities are already short on cash. Typically, the coalition said, renters must pay a deposit and first month's rent; it cited Washington as an example, where the average rent is about $1,100 and where about 5,000 people have been resettled.

Apartment owners say they also are encountering problems collecting rents because FEMA hands money directly to storm victims, instead of using housing vouchers or payments to landlords as HUD does for some low-income renters. Some families that left their homes with only what they could carry have used FEMA's cash for food, clothing and transportation.

"We felt if we did the right thing, FEMA would step up and provide housing assistance for all these folks. Here we are four weeks later, and a lot of these folks simply do not have rent money to pay," said Kirk H. Tate, a member of Houston's Katrina housing task force and a partner at Orion Real Estate Services Inc., which manages 12,000 apartments in the city.

Houston authorities welcomed 20,000 Katrina households into rental units in as few as three or four days, mostly waiving deposit and rent requirements, Tate said. "The last thing we want to have to do is ask for them to move out when they can't pay the rent," he said, but property owners have mortgages, utilities and expenses to pay and may need to start eviction proceedings by month's end.

Benicha McCraney, 49, left New Orleans two days before Hurricane Katrina with two children and a suitcase holding three days' worth of clothes. Now the family lives in a $1,096-per-month two-bedroom apartment in a suburban Houston complex called Tranquility Bay.

She received $2,358 for three months from FEMA but estimates her monthly expenses at about $1,700. With $1,500 in savings and her husband, a police officer, fearing he will be laid off in New Orleans, McCraney is worried about paying for children's clothes when the weather cools.

McCraney is not facing eviction yet, but having lost her home to floodwaters, she is postponing replacing the worn tires on her car. "I would like to stay here as long as I can," she said. "I don't have anywhere else in the world to go."

The warnings come as a wide range of players in the nation's housing and lodging industries express mounting exasperation with FEMA's shifting efforts to cope with the evacuee crisis. Although the administration has proposed cruise ships, trailers, President Bush's nascent "urban homesteading" initiative, hotels and now apartment grants, they say FEMA is ignoring advice from experts inside and outside the government.

"The normal FEMA programs just aren't working. They may be good for 1,500, 2,000 people, but when you're talking a half a million, they do not work," said Douglas S. Culkin, executive vice president of the National Apartment Association.

Culkin said 1 million rental units are vacant in the southeastern United States at half the rate of FEMA's $1,770-a-month hotel program. He called the current spending rate of $250 million a month "a horrendous waste of tax dollars."

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