Biloxi's Recovery Shows Divide
While Casinos Prosper, Katrina's Mark Lingers in Working-Class Areas

By Peter Whoriskey
Washington Post Staff Writer
Sunday, November 25, 2007

BILOXI, Miss. -- Nowhere has the rebound from Hurricane Katrina been gaudier than along Mississippi's casino-studded coast.

Even as the storm's debris was being cleared, this city's night sky was lighted up with the high-wattage brilliance of the Imperial Palace, then the Isle of Capri, then the Grand Casino. More followed, and so did vacation-condo developers.

Yet in the wrecked and darkened working-class neighborhoods just blocks from the waterfront glitter, those lights cast their colorful glare over an apocalyptic vision of empty lots and scattered trailers that is as forlorn as anywhere in Katrina's strike zone.

"At night, you can see the casino lights up in the sky," Shirley Salik, 72, a former housekeeper at one of the casinos, said this month while standing outside her FEMA camper with her two dogs. "But that's another world."

More than two years after the storm, the highly touted recovery of the Mississippi coast remains a starkly divided phenomenon.

While Gov. Haley Barbour (R) has hailed the casino openings as a harbinger of Mississippi's resurgence and developers have proposed more than $1 billion in beachfront condos and hotels for tourists, fewer than one in 10 of the thousands of single-family houses destroyed in Biloxi are being rebuilt, according to city permit records. More than 10,000 displaced families still live in trailers provided by the Federal Emergency Management Agency.

Now, long-standing resentment over the way the state has treated displaced residents has deepened over a proposal by the Barbour administration to divert $600 million in federal housing aid to fund an expansion plan at the Port of Gulfport. The port's recently approved master plan calls for increasing maritime capacity and creating an "upscale tourist village" with hotel rooms, condos, restaurants and gambling.

"We fear that this recent decision . . . is part of a disturbing trend by the Governor's office to overlook the needs of lower and moderate income people in favor of economic development," 24 ministers on the Mississippi coast wrote in September in a letter to state leaders. "Sadly we must now bear witness to the reality that our Recovery Effort has failed to include a place at the table . . . for our poor and vulnerable."

State leaders rejected the complaints. Gray Swoope, executive director of the Mississippi Development Authority, which is leading the state's recovery efforts, called the port expansion a "key piece" of the state's economic recovery and said that already-funded programs will be enough to address the state's housing needs.

"The people at this table are very compassionate about the people on the coast," he said. "We feel housing has been addressed, and it's in our plans."

Swoope said that because storm-displaced Mississippians are being accommodated by the state's housing programs, the state is comfortable asking the Department of Housing and Urban Development for permission to redirect the housing aid to the port project.

Exactly how much help residents should receive for rebuilding has been a flashpoint from the beginning of the recovery, when Louisiana and Mississippi adopted starkly divergent approaches to dispensing federal housing aid.

Louisiana leaders designed a homeowner grant program that is far broader. Essentially, any homeowner with significant hurricane damage is eligible to receive as much as $150,000 for rebuilding, less any insurance payouts received. A special provision for low-income homeowners added as much as $50,000 to the award if the damage claim was not enough to rebuild.

Mississippi's primary homeowner grant program, by contrast, was much narrower.

The program, known as Phase 1, focused only on the relatively narrow group of homeowners who lived outside the designated flood-prone areas -- and as a result did not have flood insurance -- but were flooded by Katrina.

It excluded thousands who lived in the flood zone and lacked adequate flood insurance, as well as anyone who experienced only wind damage.

Bailing them out, the argument went, would encourage homeowners to forgo insurance coverage in the future. But because low-income households were more likely to lack insurance or to be underinsured, Mississippi's exclusions fell most heavily on the poor, advocates said.

"Mississippi had to be pushed every step of the way to a compassionate position, and it's only partway to the finish line -- that's why losing this money to the port would be so wrong," said Reilly Morse, a lawyer for the Mississippi Center for Justice, a legal aid organization that has lobbied for the housing money. "It's just not compassionate to stop here when so many people still aren't cared for."

Mississippi did eventually begin compensating low-income homeowners who lacked insurance. But that program, Phase 2, limited awards to $100,000, and about 20 percent of the 11,000 applicants for that money have received checks so far.

Mississippi's program for rebuilding affordable rental properties has lagged even more. A proposed $262 million program for the owners of small rental complexes or houses, the primary type of rental on the coast, has yet to dole out any money. Another program, for low-income housing tax credits, is supposed to generate about 5,730 affordable rental units, but fewer than 1,100 have been built.

More than 20,000 rental units in Mississippi sustained major or severe damage in Katrina. The post-storm scarcity of rentals has driven prices up as much as 30 percent, making it more difficult for families in FEMA trailers to find new homes.

"Renters -- well, a lot of us sort of fell through the cracks," said Salik, the former casino housekeeper.

A widow, she quit her job after having a knee replacement years ago but still works three days a week at a mini-storage facility.

For a month after the storm, Salik lived in a tent. After a few more temporary living arrangements, she landed a FEMA camper that she has parked in her son's yard. Her son's camper flanks his house on the other side. He is still repairing the house, and though Salik had rented a house before Katrina, she expects to move in with her son when he finishes.

Like many of the residents struggling to rebuild in eastern Biloxi, Salik said she opposes spending housing aid for the port.

"Whatever turns their crank," she said when asked about the proposal. "You know, really, there's still a lot of people around here who need help."

All along the road Salik lives on, Hoxie Street, people are struggling to get back into their homes. And while city officials have blamed the slow recovery on new FEMA guidelines that call for elevating houses by as much as 12 feet off the ground -- an expensive and sometimes impractical requirement -- those rules do not affect everyone, and most said their primary challenge is financial.

Daniel Beavers, 52, a surveyor, is rebuilding his house himself because his insurance payout and a state grant fell well short of what he has needed.

Emily Sponsler, a bartender, and her 11-year-old son are living in a FEMA trailer while they wait for their landlord to gather enough money to rebuild the house they once rented for $625 a month.

Earl Parrish, 72, a retired pipe fitter, and his wife, Betty, are still living in their grandson's home in Ocean Springs, the next town over, trying to put their Hoxie Street house back together on a limited budget.

They received about $50,000 from the housing grant program, but it was not nearly enough to complete the job. Katrina flooded their house with about six feet of water.

They have put in their own savings, and a Lutheran church group handled a lot of the labor. But their home is not quite ready for them to move in -- it has no furniture.

Like his neighbors, Earl Parrish opposes redirecting the housing aid to the port. But he seemed to regret making a complaint.

"We're grateful for what we got -- don't misunderstand," he said. "But the people around here were just working folks who didn't have much. You see all these empty lots around here? These are people who just can't afford to come back."

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