ProPublica/The Times-Picayune (5/12/22): Richard A. Webster and David Hammer, WWL-TV
Celeste Matthews spent last summer’s 16th anniversary of Hurricane Katrina in a panic at her cousin’s house in Uptown New Orleans as another monster storm, Hurricane Ida, roared through the city. With every gust, she was terrified the windows would shatter.
The next day, she returned to her home in the Gert Town neighborhood to find part of the roof torn off. With the electricity out, she had to sleep with the windows open. Mosquitoes swarmed around her bed.
“It was horrible,” said Matthews, 67.
After three days without power, Matthews had her daughter drive her to Houston. A week later she returned home, closed the curtains and sank into a depression, spending the next several days in bed.
One morning, she awoke to a knock on the door. An Orleans Parish sheriff’s deputy was holding a stack of court papers. Matthews, her hands shaking, read the first page:
“State of Louisiana, Division of Administration, Office of Community Development – Disaster Recovery Unit Versus Matthews, Celeste.”
Below that: “YOU HAVE BEEN SUED.”
When the levees broke during Katrina in 2005, Matthews’ home was engulfed in 5 feet of water. She lost everything. Like most poor New Orleanians, she struggled to cobble together enough money to rebuild.
In 2008, the state of Louisiana offered Matthews $30,000 through the federally funded Road Home program to elevate her house to reduce the risk of future flooding. But her home was still unlivable, and she desperately needed the cash for repairs. To her relief, she said, a Road Home representative told her she could use the elevation grant to instead pay for repairs. So she did.
Now, more than a decade later, the state wanted the money back.
Louisiana has sued about 3,500 people — about one in every nine people who received an elevation grant — for failing to use the grants to raise their homes after hurricanes Katrina and Rita struck in 2005.
The real problem, however, wasn’t that people ignored the rules, according to an investigation by The Advocate | The Times-Picayune, WWL-TV and ProPublica. It’s that the state Office of Community Development and a contractor it hired in 2006, ICF Emergency Management Services, mismanaged the program. For more than a decade since, the U.S. Department of Housing and Urban Development has insisted that the state recoup the money from people who are noncompliant.
Louisiana gave money to 32,000 homeowners starting in 2008. The state was in such a rush to distribute grants that no one verified they were eligible, according to the testimony of a top state official in one of the lawsuits. Some homeowners, like Matthews, said Road Home representatives told them they could use the money for repairs, even though that would violate their grant agreements.
Twice between 2013 and 2015, the state tried to fix the problem, changing the rules to allow spending on repairs and other expenses. But by then, so much time had passed that many homeowners couldn’t prove how they had used the money.
Some homeowners said they originally planned to elevate, but found that $30,000, the typical elevation grant, was less than a third of what it typically costs to lift a house and put it onto raised footings.
In 2017, under pressure from the federal government to recoup the funds, Louisiana started filing lawsuits against residents.
For many low-income homeowners, the suits could threaten financial ruin. Several pre-emptively declared bankruptcy, according to their attorneys. Others failed to defend themselves in court, resulting in the state placing liens on their properties. Some fear their homes will be taken away.
“We worked our asses off to get where we are now,” said Michelle Williams, 54, who is being sued along with her husband, Patrick Williams. “And for this to happen? You’re not helping the people of Louisiana. You’re knocking us farther and farther back.”
If they lose the lawsuit, she said, “I will crumble.”
The failures of Louisiana’s elevation grant program are part of a tapestry of dysfunction in how America prepares for disasters and helps victims in their wake. ProPublica and The Advocate | The Times-Picayune are exploring how a range of policies unintentionally punish working-class Americans and people of color, contributing to the disproportionate harm they suffer in catastrophes.
The problem is particularly urgent in Louisiana. Not only is it one of the poorest states in the union, it’s the most flood-prone, and it has been struck by some of the costliest natural disasters ever to hit the U.S. Thanks to global warming, the severity of such events is increasing, and their monetary toll is skyrocketing: Adjusted for inflation, the cost of U.S. natural disastershas increased by 600% since 1980.
The lawsuits over elevation grants, which have left thousands of Louisiana homeowners facing the prospect of cripping liens or payment plans, are part of the broader pattern of poor disaster planning.
The majority of elevation grants were in lower-income neighborhoods and communities of color, as were the lawsuits that followed, according to an analysis by ProPublica and The Advocate | The Times-Picayune. For the roughly 3,000 lawsuits that could be mapped, more than half of properties were located in census tracts with median incomes below the surrounding areas.
Roughly two-thirds of the properties were in neighborhoods that were disproportionately Black compared to their parishes.
The state is seeking $103 million in the elevation lawsuits. So far it has recovered nearly 5% of that from 425 families through the suits, said Pat Forbes, executive director of the Office of Community Development.
The agency tried to avoid taking such an aggressive approach, he said. But the state is required by the federal government to claw back money from people who didn’t follow the grant requirements.
“We’ve gone to great lengths to try to not have to take money back from people,” Forbes said, adding that the state will not foreclose on anyone’s home to collect.
A HUD spokesperson said the state could have used its own funds to repay any misspent grants rather than going after homeowners.