FEMA Pricing Of Trailers Called Unfair And Wasteful

The Federal Emergency Management Agency has sold trailers to victims of the 2005 hurricanes at prices that range from $1 to $20,000, under inconsistent policies that prompted a temporary ban on all trailer sales, according to a new government report.

Department of Homeland Security Inspector General Richard L. Skinner warned that uneven sales practices in Texas, Mississippi, Alabama and Florida were unfair to some victims of hurricanes Katrina and Rita and wasted taxpayer dollars.

"Pricing has not resulted in the best return for the government and has been inequitable to buyers," Skinner wrote in a May 2 memo to FEMA Administrator R. David Paulison obtained by The Washington Post. "FEMA needs a consistent and equitable sales policy for travel trailers and mobile homes."

Marta Metelko, a spokeswoman for Skinner's office, declined to comment on an accompanying report before its official release Tuesday. But FEMA spokesman James McIntyre said the agency adopted new rules in April and restarted trailer sales in storm-affected states on May 14 after halting them in October.

"This is actually old news. We halted that program, we saw what was happening, and we put a national program in place," McIntyre said. "Since then we have re-implemented the sales program."

The report is the latest criticism of FEMA's handling of the multibillion-dollar housing program it established in 2005. About 86,000 families displaced by the hurricanes continue to live in trailers and mobile homes, down from a peak of about 120,000.

By law, FEMA can sell trailers to disaster victims who occupy them if they lack permanent housing and maintain insurance coverage.

According to Skinner, prices ranged improperly because of inconsistent policies. One office priced trailers based on the average yearly cost of all types of housing units, rather than the cost of a single trailer. Several discounted trailers at different rates based on their age, while one made no allowance for depreciation and sold units at a flat rate.

As of yesterday, the FEMA field office in Montgomery, Ala., had sold 73 units overall; the office in Biloxi, Miss., had sold seven units; and offices in Austin and Baton Rouge had not sold any, according to FEMA. An office in Orlando, which was granted an exception from the October sales ban, has sold 353 units.

Under the new rules, occupants must sign documents indicating they may want to buy their trailer. Prices will depend on the type of unit, whether it was new or used, and the number of months it has been occupied.

FEMA also is selling returned and refurbished trailers to the public. In March, it announced plans to auction as many as 41,000 of the of 145,000 trailers and mobile homes it bought for $2.7 billion just before Katrina hit in August 2005. The government is receiving about $7,000 each for units that cost FEMA an average of $18,620.