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."
Linda Couch, deputy director of the low-income housing coalition, agreed that taxpayer money could be saved by using vacant apartment units. "If the federal government made a choice to subsidize them at the rents they are available at, it looks like it still would be less than having them live in a hotel," she said.
FEMA spokeswoman Nicol Andrews said that the agency's rental aid program can be extended to 18 months. If renters keep receipts and show that their housing costs exceed $786 month, FEMA will allow them to spend more on rent, Andrews said. But Congress has set a $26,200 limit per family for FEMA aid of all kinds, including home repairs, for Katrina victims.
Andrews acknowledged that the trailer process is not moving as fast as the agency would like. She declined to comment on criticism from the housing sector but noted that FEMA is establishing huge new programs and that shelter populations have dropped 75 percent in two weeks.
The scale of Katrina's exodus is immense and growing. On Thursday, FEMA's acting director, R. David Paulison, increased the agency's estimate of the number of families expected to need housing for up to several months, from 300,000 to between 400,000 and 600,000.
FEMA said Friday that the number of people in temporary shelters, which Bush has pledged to clear by mid-October, has fallen to 31,500 from a peak of more than 300,000. FEMA is providing rental assistance to 412,000 displaced households and has registered 2 million storm victims.
"The recovery process for Hurricane Katrina will be neither fast nor easy," Paulison said. "Many . . . rightfully are concerned about the cost, as we all are."
Critics in Congress and elsewhere have focused on large trailer contracts and the difficulty FEMA has encountered in acquiring trailers and sites for trailer parks. So far about 6,800 FEMA trailers are occupied by emergency workers and evacuees across the Gulf Coast. Some also have criticized spending $236 million to house 7,000 people on three Carnival Cruise Lines ships.
Last week, three major national apartment owner associations criticized FEMA for ignoring their offers of help and expressed bewilderment over why the agency extended the hotel program. The average room rate of $59 per day is more than twice the cost of rental vouchers in HUD's low-income Section 8 housing program and the rental aid provided by FEMA and HUD to Katrina victims. It also exceeds the median monthly rent in some of the nation's most expensive cities.
The groups cited 50,000 vacant apartments in Dallas-Fort Worth alone and 1 million in the southeastern United States at rents that range from $700 to $1,200 a month -- vacancy totals confirmed by others outside the industry.
"Our message is simple. There are currently tens of thousands of available rental units that would offer evacuees the opportunity to more quickly recover from their devastating losses," the National Multi Housing Council, the National Apartment Association and the National Leased Housing Association wrote to HUD Secretary Alphonso Jackson and Homeland Security Secretary Michael Chertoff. "To extend the hotel program indefinitely prolongs homelessness and makes no sense," they said.
Housing officials point to the city of Dallas's Project Exodus as an example of better planning. It has placed about 1,000 people in 481 apartments using $2.5 million raised through contributions by individuals and large companies. The units rent for HUD market rates, including utilities. Although city funds are set to expire after 60 days, Dallas expects FEMA to pick up costs after that.
Houston also has agreed to pay up to 12 months of housing assistance for storm victims, hoping for FEMA reimbursement, Tate said.
About 37,000 evacuees are in Dallas area hotel rooms, said Miller, and more than 150,000 evacuees are in rooms across Texas.
"We said, 'We can't wait for FEMA,' " said Dallas Mayor Laura Miller. "What worries me is reading about all these other cities who are waiting for trailer homes to show up so they can re-create these trailer villages. That would be the worst thing you can do."
McCraney, whose husband fears losing his job with the New Orleans police, says: "I would like to stay here as long as I can. I don't have anywhere else in the world to go."