My suggestions for a Texas disaster housing program

In developing a plan to help Texas survivors of Hurricanes Ike and Dolly rebuild their homes I believe the starting point should be the existing Hurricane Rita housing program operated by the Texas Department of Housing and Community Affairs (TDHCA). For the reasons I detailed in earlier blog entries, I strongly feel that the basic elements of a workable plan are present in the TDHCA Hurricane Rita housing program with its comprehensive, statewide approach.

The plan has some problems, most notably the long time it took to get the program up and running. But now that it is at last in place and building and repairing homes it represents Texas’ best bet to get the housing damaged and destroyed by Hurricanes Ike and Dolly repaired and rebuilt.

There are some changes I believe should be made and there are some additional housing activities that should be included in the Ike/Dolly housing program. I will discuss these in this blog entry.

Before we get into the program details let’s talk about the principles that should guide the design of the housing programs.

1) Allocate the limited disaster funds so that they take care of the housing needs of Hurricane Ike/Dolly survivors as the State’s top priority and relegate funding for government programs to a lower priority. Families’ recovery should come first and government second.

2) Treat all of the Texas hurricane survivors fairly and equitably by affording them access to the same level of benefits and the same programs regardless of the Texas city or county where they live.

3) If, even after making housing the State’s top funding priority, not enough money is available to meet all of the housing needs, Texas should further prioritize funds to help those who have no other resources to get back into housing – in other words, prioritize the poor who have no insurance and cannot obtain a loan to rebuild.

4) Allocate sufficient funds to rebuild rental housing that is affordable at pre-hurricane rents. Texas must recognize that the huge losses of affordable rental housing will not be replaced without the provision of both loans and grants to public housing authorities and private landlords.

Unfortunately, the Hurricane Ike disaster plan proposed by the Texas Office of Rural Community Affairs (ORCA) inherently violates all of these principles by creating not a comprehensive statewide housing rebuilding program but several regional plans each shaped by the whims of local politicians. There is no guarantee that the haphazard disaster recovery program proposed by the ORCA plan, with regional priorities set by local politicians, will not siphon money away from critical housing needs to fund expensive discretionary public works improvements.

In addition to these guiding principles there are several special considerations based on the nature of the communities involved and the characteristics of the hurricane survivors that should be taken into account in designing the housing programs.

1) Deal with the housing needs of both homeowners and renters equitably. Recognize that private and public affordable rental housing cannot be rebuilt without a source of equity to close the gap between affordable rents and the incomes of lower income renters. This means realistically estimating those rental housing needs and not simply providing the minimal funding levels for affordable rental housing prescribed under federal law.

2) Know how much to allocate for each of the rental and owner housing programs. This requires access to FEMA data that it has thus far refused to release. Specifically, someone must compel FEMA to release the FEMA evaluations of individual damage claims for each city and county in a manner that protects the individual privacy of the applicants yet makes the data available for planning. This data is required to determine the amount of damages that have been incurred by households at different income levels and to quantify exactly how much of those damages are not covered by insurance. Short of the disclosure of this information for planning purposes there is no way for the State of Texas to intelligently allocate funds for housing programs.

3) Serious efforts must be directed at overcoming the extreme levels of racial and economic housing segregation that exists in these communities. Simply rebuilding housing in place, and thus limiting low income and minority households to their existing neighborhoods, will reinforce existing segregated housing patterns and will be an explicit failure to meet the requirement to “affirmatively further fair housing” that is imposed upon any governmental entity using CDBG funds.

4) Afford minority and poor families this unique opportunity to break the physical bonds of poverty and move to where the neighborhoods are safer, the schools are better and jobs are more available. Choice of where to live must be built into the housing programs.

5) Use high standards for the design and construction quality of the houses built under the program to improve the quality of the neighborhoods in which they are built. This massive reconstruction program needs to create well designed homes that can enhance the neighborhood. The program should ensure that the design of the houses complement the existing houses in the neighborhood. The repetition of the same design (“cookie cutter” style houses) should be avoided.

6) Design into the housing programs strategies to maximize the long term affordability of the home. Low income families face challenges in their ability to maintain the home, the cost of insuring the house, the tax burden imposed by a new home and the dangers of predatory home equity lenders. The program design needs to incorporate ways to reduce the costs to renters and homeowners through energy savings, enhance durability and minimize costs of maintaining the houses through green building technologies and to establish Individual Development Savings Accounts (IDAs) for low income families.

In the interest of not taxing the readers of this blog unnecessarily I am going to provide only a basic outline of the changes and new programs. There are a lot of important details that I will leave out here that will need to be discussed and incorporated to make the programs work correctly.

Using the guiding principles and bearing in mind the additional considerations I have just outlined, I propose the survivors of Hurricane Ike be assisted through five unique housing programs.

Program #1: Emergency weatherproofing program. This program would undertake roof, door, window and siding repairs as necessary to prevent moisture from entering the house. The purpose is to stabilize the home so that additional damages do not occur before comprehensive rehabilitation can be undertaken either through insurance, private funds or a government housing repair program. The maximum amount of funds expended on the house would be limited to what is necessary to provide these limited weatherproofing repairs and in all cases would be limited to a maximum of $10,000. The program should be administered by the Texas Department of Housing and Community Affairs and should be provided as a grant to the homeowner.

Program #2: Comprehensive rehabilitation or reconstruction. This program would provide comprehensive rehabilitation or replacement of a home. The program should operate under the guidelines of the existing program established by the Texas Department of Housing and Community Affairs for rehabilitation of homes damaged by Hurricane Rita, with the exception that the maximum expenditure under the program should be increased from the existing $70,000 to $80,000 to build a higher quality, more energy efficient home. The program should be provided as a grant to homeowners with incomes below 80% of the area median family income adjusted for family size.

In addition to the guidelines imposed under the existing Hurricane Rita program the program would also incorporate the following:

– Households would have the option to elect to receive a housing voucher in lieu of the repair or reconstruction of their home in its existing location. The purpose of this would be to allow low income families to relocate to a higher-quality neighborhood or in an area of greater job opportunities.

– All housing rehabilitated or reconstructed under the program should incorporate green building techniques and achieve high energy efficiency ratings.

– Households will be required to complete homeowner training to provide information to the homeowner regarding the maintenance of their home and the financial skills necessary to budget to maintain the structure.

– Households will be required to maintain homeowners insurance and flood insurance (if required). The Legislature should develop a special line of homeowners insurance affordable for lower income families living in hurricane hazard areas.

– A pilot test of a energy efficiency program will be undertaken involving at least 20% of the homes rehabilitated and reconstructed. These homes will be equipped with a range of energy saving devices and energy generating technologies. Long-term monitoring of the technical and practical feasibility of various energy strategies along with the economic effect on the households will be carried out through a contract between the Texas Department of Housing and Community Affairs and a state institution of higher education to be selected by the Department through a competitive process.

– A pilot test of a new housing technology demonstration program will be undertaken involving at least 5% of the homes reconstructed. The pilot will involve a design/build program involving competitively selected teams of architects and contractors. The goal of the program will be to test models for rapidly deployable, modest cost single-family homes to be used in future disaster housing rebuilding programs. The model for this program is the Department’s existing Texas Grow Home project.

Program #3: Faith-based/nonprofit housing rehabilitation program. This program would provide grants of building materials to participating faith-based organizations that agreed to comprehensively rehabilitate homes. The program would also provide reimbursement for selected professional construction services such as electrical and plumbing. The materials and professional reimbursement would be provided to the faith-based/nonprofit organizations in the form of a grant so long as the home being rehabilitated was occupied by a homeowner with an income below 80% of the area median family income adjusted for family size.

Program #4: Public housing rehabilitation and reconstruction program. This program would provide grants and low-interest loans and priority access to low income housing tax credits to public housing authorities to rehabilitate or to reconstruct (either on-site or off site) public housing damaged by the hurricane. The program would require the housing authority to replace public housing units on a one for one basis. Program goals would be established so that the developments rehabilitated or constructed through the program met the desegregation and economic integration goals established under the HUD Hope VI housing program. The program would be administered by the Texas Department of Housing and Community Affairs.

Program #5: Affordable rental housing partnership program. This program would provide grants and low-interest loans and priority access to low income housing tax credits to nonprofit and for-profit developers of affordable rental housing to offset losses of affordable rental housing in Southeast Texas communities. The program would be administered by the Texas Department of Housing and Community Affairs. Priority would be given to applicants who propose to construct one and two family rental housing and mixed income, multifamily housing within the areas of town with poverty rates below those of the community as a whole and within school attendance zones of elementary schools rated as exemplary by the Texas Department of Education. Funds for one and two family rental housing construction or rehabilitation would be restricted to housing units affordable to unsubsidized tenants earning not more than 60 percent of the area median family income adjusted for family size. Grants for multifamily development would be provided as necessary to make not less than 10 percent and not more than 20 percent of the rental housing affordable to families with incomes below 30 percent of the area median adjusted for family size. Additional priority would be given to developments which in addition to achieving the extremely low income targeting also sought to provide at least 25 percent of the rental units for occupancy by households earning above 80 percent of the area median family income.

Keep in mind that these are simply the rudimentary outlines of programs. The details will have to be developed. But none of these programs are likely to occur should Texas elect to move forward with the disastrous pork barrel allocation scheme for disaster recovery funds proposed by ORCA.