Katrina Cottage pilot program woes due to failure at all levels

How many times do we have to hear the story before we fix this problem?

Let’s sum up the response to the plight of hurricane survivors with really low incomes…

• The federal government is slow and bungling in providing housing;
• The state government has problems designing an effective housing program and  once the program is designed is either unconscionably slow or completely fails to help poor disaster victims; and
• Local governments throw up obstacles because they would just as soon the poor not move back into their communities.

We are reminded of this once again in an excellent Washington Post story by Spencer S. Hsu that ran Saturday.

This time the multilevel failure is illustrated in the Katrina Cottage pilot program.

Hsu tells the story of a 74 year old Mississippi man, who dropped out of school at age 9 to work in a sawmill to help his family earn a living. His home destroyed by Hurricane Katrina, he is now living in a cramped 300 square foot government trailer while across the fence from his trailer set 700 brand new, empty Katrina Cottages.

The FEMA Alternative Housing Pilot Program, aka the Katrina Cottage Demonstration Program, offers an interesting lens through which to view the actions of each level of government toward the effort of rehousing low-income hurricane survivors.

The pilot program was begun on September 15, 2006 with FEMA’s announcement that it would make available $400 million to test home models to, “evaluate the efficacy of nontraditional short and intermediate term housing alternatives for potential future use in a catastrophic disaster environment.” FEMA announced contracts with Mississippi, Louisiana, Texas and Alabama to undertake the demonstration programs in early January 2007.

The results have been, to put it mildly, disappointing.

Hsu reports….

Mississippi built 3,075 [Katrina] cottages, but many local jurisdictions refused to grant permits or alter zoning codes, apparently concerned that the small structures would lower property values. The state retreated, limiting the cottages for temporary use, and more than 1,800 families remain in them.

Louisiana has done even worse. The state received $75 million to build its own version of the cottages. In two years, the program has been shuffled between state agencies, gotten tied up in a contracting dispute and has yet to complete a single cottage. The first is to be delivered later this year.

While Hsu does not explore the problems in Texas I can attest the story is the same.

In 2006 I strongly urged the Texas Department of Housing and Community Affairs (TDHCA) to apply for funds from FEMA to carry out a demonstration project. I believed at the time, and still believe, that Katrina Cottages offer a better, more cost-effective temporary housing solution for hurricane survivors than the traditional FEMA trailer. But rather than the traditional Katrina Cottage model, I believe the best solution is to develop a variant of the Katrina Cottage to be used both for temporary housing and incorporated into a permanent rebuilt structure. In this manner the money invested to build the Katrina Cottage is not lost as permanent replacement housing is built.

Consider it from both the perspective of the government and the hurricane survivor. A Katrina Cottage costs around $70,000 to build and move onto a homeowner’s lot. It’s much better for the taxpayer and the homeowner to figure out a way that this $70,000 public investment is turned into permanent housing so that the government does not need to pay to haul off the Katrina Cottage while putting up additional money to build a permanent house. A permanent Katrina Cottage also means the homeowner does not need to take out as large a loan to get their home rebuilt.

Unfortunately, citing time constraints and the design of the FEMA grant competition, the State of Texas did not participate in the development of a sound concept for its Katrina Cottage submission. Instead, the State released an RFP to private manufactured housing developers based on FEMA’s poorly thought out and unimaginative program description. The State of Texas left it to the manufactured housing developers to propose a demonstration program for FEMA to fund.  The result were proposals for only temporary housing solutions. I believe the State itself should have been involved in narrowing the housing concept to a permanent housing solution that was appropriate for the situation facing hurricane survivors in Texas. To compound the problem further the state submitted, virtually verbatim, a half dozen or so of the submissions that it received from manufactured housing developers to FEMA for consideration in the Alternative Housing Pilot Program instead of picking out and submitted the best.

FEMA’s national selection panel sought to select a wide variety of different alternative housing approaches from among the submissions of the states. Since Louisiana and Mississippi had elected to submit a traditional Katrina Cottage, when it came time to review the Texas application the selection committee was looking for something completely different — a highly temporary, modular approach.

The alternative housing pilot program model FEMA decided to fund for Texas certainly met the criteria of being “different”.

The Texas pilot program, known as the “Heston House” is single-family pre-fabricated, panelized house that can be disassembled to fit in a standard 8’ x 20’ shipping container. The house makes sense only as a rapidly deployable temporary housing unit. The unit can be pre-positioned, stored flat to allow multiple units to be transported. It can be constructed in as little as eight hours by a six person crew. It is an interesting idea for a highly specialized housing need.

While the strength of the Heston House is its ability to be shipped in a relatively small container and erected quickly, it’s weakness lies in the fact that it looks like a glorified shipping container with a porch added. The house is not, by any stretch of the imagination, a conventional looking structure that would be welcomed into existing neighborhoods. It closely resembles a single wide mobile home.

As in Louisiana and Mississippi, the program is off to a glacially slow start in Texas.

In the 18 months since receiving the contract from FEMA, a total of seventeen families have been approved to get one of 60-70 temporary units authorized. Only two Heston Houses are complete and occupied. The project was funded with a $16 million FEMA grant. By my math that is more than $228,000 per house, but in fairness, there is a lot of extra program and administrative funds associated with this project because it is a demonstration program. The intent is to make about 50 of the houses available as permanent housing units and 20 as temporary housing units. The temporary housing units are set to be disassembled and stored at some future date in order to test the viability of reusing the houses.

The main challenge Texas faces with the Heston Houses is that they are not a desirable permanent housing solution and will not be acceptable to most cities and neighborhoods. And today’s need is for permanent housing.  If Mississippi cities were reluctant to accept Katrina cottages, I can only imagine the opposition from neighborhood associations and cities when they get a look at the Heston House. That said, TDHCA is negotiating with the City of Houston to put 60 of these “units” on a single site for housing people displaced by Hurricane Rita to Houston.

I will wager these will go out in some remote area by themselves and not in an existing neighborhood. A “community” of these homes is going to look quite similar to a single wide mobile home trailer park. I will also wager that if 60 of these units go onto a single site there will be problems with management and conditions for the tenants.

I hope someone proves me wrong.

I don’t know a lot of people who think it’s a real good idea for government, four years after a hurricane, to set up a large community of low income hurricane survivors, displaced from another part of the state to live in housing of this type. Shouldn’t we be focused instead upon permanently re-housing the survivors? With a different type of housing with a more conventional appearance the odds of this succeeding would have been measurably greater.

But the real solution, and the promise of the Katrina Cottages, was to re-house people quickly in the communities and on their lots where they lived in prior to the hurricane, not to pick people up, move them across the state, and put them in a large community of single wide mobile homes.

The Heston House model might have worked had it been carried out in the way it was designed — as temporary housing for disaster victims, not permanent housing. What went wrong with the Heston House experiment is that the government bureaucracy both at FEMA and at the State of Texas could not respond to the opportunity to use the Heston Houses as temporary housing for Hurricane Ike survivors. Now the state is trying to pound this square peg solution into a round hole reality.

This is not intended to be an indictment of the state housing agency. The people at TDHCA have knocked themselves out to try and make this pilot program work (after agreeing to a flawed approach). Yet the state housing agency, overwhelmed by the scope and size of recent disasters, is attempting to develop and administer programs in areas where state and local governments have little if any practical experience. The fact that state government is trying is of little consolation to impoverished hurricane survivors still searching for a home. Nothing so clearly points out as this experience the need to develop a capable program innovation and planning capacity within state housing agencies.

So here we have yet another illustration of the failure of the federal, state and local governments to adequately respond to the housing needs of low-income hurricane survivors.

• The federal government was slow to implement the alternative housing pilot program and ended up funding an inappropriate model for the situation on the ground in Texas.
• The state, lacking the time, resources and expertise to design an appropriate solution, ended up submitting virtually all of the models it was offered by private sector bidders no matter how inappropriate.
• Local governments, having essentially abdicated their responsibility to provide a way for their low income citizens to move home, will now be in a position of reacting to the federal and state initiatives. If my prediction is correct, local governments will reject attempts to develop a large community of this “alternative housing” without offering any alternative.

Low income hurricane survivors will have no choice but to continue waiting and hoping that a real workable solution to their housing problem someday emerges.

Hsu’s summary of the situation in Mississippi and Louisiana is equally applicable for Texas.

The federal government has poured more than $25 billion into aid for individuals, emergency housing and state rebuilding block grants. But states have lagged in developing long-term solutions for dislocated families, in some cases using funds for economic development projects or drafting poorly designed programs.

I agree.