Thanks to Gov. Haley Barbour, federal Hurricane Katrina recovery money is benefiting the rich on the Mississippi Gulf Coast more than the poor, advocates for low- and moderate-income housing say. "We're finding that federal disbursements are not balanced among high- and low-income people," said Derrick Johnson, president of the Mississippi NAACP.
The government awarded $5.5 billion to the state of Mississippi to assist with its recuperation from Hurricane Katrina, but only a fraction of that money is going toward the construction of small rental units and public housing, which most commonly benefit low- to low-middle class incomes.
Reports devised by the Steps Coalition, the Mississippi Center for Justice and the National Low Income Housing Coalition say the state, led by Gov. Haley Barbour, has been steering money toward higher-income brackets through federal waivers over Community Development Block Grant Disaster Supplemental funds.
Federal CDBG regulations demand that 50 percent of CDBG money go to housing benefiting low- to moderate-income brackets, but the state received waivers of low-moderate-income participation requirements on $4.1 billion, or 80 percent of all federal hurricane recovery funds allocated so far. "The governor's office lobbied for that waiver very specifically," Johnson said.
The result? Almost all the federally backed state-funded recovery efforts have focused on homeownership, about 10 times the amount allocated to replacing rental units or public housing. Specifically, federally approved state hurricane recovery allocations are $367,500,000 for rental units versus $3,260,000,000 for home-ownership programs, according to the NAACP report, "The Accountability Gap: Unanswered Questions Two Years Later."
The impact is felt all over the Coast, with rental rates jumping more than 30 percent in the region, and some Biloxi employees having to drive more than 60 miles to find their rental units further inland.
Johnson complains that not only has labor suffered along the Coast, but the skewed allotment favors the profit of private contractors over the coffers of municipalities. "The other thing the state took out, which nobody talks about, was a benefit for what's called entitlement cities," Johnson said.
Mississippi has only a handful of entitlement cities, including Biloxi, Gulfport and Jackson. The designation would normally have allowed city administration to directly tap the federal funds, allowing municipalities to handle their own recovery repairs—and spend up to 5 percent of the money for administrative purposes.
"Instead, that money went to companies such as The Reznick Group (of Maryland)," Johnson said. Reznick received $88 million to implement the Mississippi Homeowner Assistance Grant program. Other advocates, like the Steps Coalition, say the Mississippi Development Authority offers little to no information regarding state expenditures for the Coast's labor class and specifies no expenditures dedicated to low- or moderate-income projects.
Gov. Barbour, in contrast, has complete oversight of the federal disbursements through the Mississippi Development Authority, an organization ultimately presided over by the governor, who picks its leaders. Legislators, like Democrat Rep. Frances Fredricks, of hurricane-devastated Gulfport, grew leery of the governor's authority over the disbursements, and attempted to pass HB 1320, which allowed legislative input. A majority of House members joined her call, though the Senate—controlled by Barbour—killed the bill.
"I authored that bill in the House, but that bill died in the Senate, killed by Sens. Scottie Cuevas (D-Pass Christian) and Tommy Gollott (R-Biloxi)," Fredricks said. "We needed more oversight because we were afraid that the governor's control over the (disbursement) would be unbalanced, even then. Now, it doesn't seem that renters get much in any category. The owners of rental property aren't receiving a lot, and the people who rent it, of course, get little to nothing, so these people are largely left out."
Even now, Cuevas may be benefiting from his role in the bill's death. Hinds County Republican Party Chairman Pete Perry, whose son works for Barbour, served Cuevas last month, overseeing a ballot-box inspection that could undermine Cuevas' narrow, 36-vote loss to challenger David Baria.
Oddly, Barbour fought to obliterate the CDBG sunshine legislation, even while using the argument of accountability as his weapon for tearing down the Partnership for a Healthy Mississippi, which aimed to reduce tobacco use in the state, that same year.
"We stood behind HB 1320 because Barbour himself was crying for accountability in his attack on the Partnership," said Rep. Diane Peranich, D-Pass Christian. "There was great wailing and gnashing of teeth that $20 million was being spent on tobacco cessation. (Barbour's) bone of contention was that there was no legislative oversight on that $20 million to the Partnership. Now weigh that, if you will, against the billions of dollars coming in from the federal government, to which he wanted no oversight whatsoever. The sheer hypocrisy astounded us."
Critics charged Barbour with using his apparent power over the federal disbursements to manipulate votes in the Senate.
Rep. Jamie Franks, D-Mooreville, accused the governor of influencing an MDA contract award to former Sen. Tommy Robertson, Rep. Jim Beckett, R-Bruce, and Rep. Jim Simpson, R-Gulfport, to oversee Katrina Relief grants. Franks said the generous contract award prompted Robertson to kill a bill to raise the tobacco tax during the last session, even though Robertson let an
identical bill out of his committee the previous year. "You see Robertson change his mind like that, and you have to wonder why he changed his mind," Franks said.
The Mississippi Ethics Commission investigated the Robertson contract, though committee members appointed by Barbour and the Republican lieutenant governor successfully stalled the investigation.
Robertson, himself, refused to address Franks' accusation. "You have to consider where the accusation came from, and I'm not commenting on that," he told the Jackson Free Press. Robertson did not win re-election during the Republican primaries this year. Reps. Beckett and Simpson did not return calls. Barbour also did not return calls.
Relief advocates have been lobbying Congress, through the Gulf Coast Civic Works Project, to develop federal legislation to create 100,000 jobs for Gulf Coast residents to rebuild hurricane-stricken communities.
"A program like WPA rebuilt our country during The Great Depression, and employed thousands," Beth Butler of ACORN said, adding that Congress has, so far, taken little interest in the prospect.
"To be honest, we haven't seen a lot of money being spent anywhere but Iraq."
AP is now reporting:
A state agency wants to divert $600 million from a Hurricane Katrina housing program to a port restoration project, outraging advocacy groups who say the proposal shortchanges thousands of people still homeless on the Gulf Coast.
The Mississippi Development Authority has proposed taking the money from the $2.25 billion remaining in Gov. Haley Barbour's Homeowners Assistance Grant Program, which is funded by federal block grants. Part of that program is dedicated to low-income and working poor homeowners.
"It's just unfair," Reilly Morse of the Mississippi Center for Justice said Wednesday. "We've been told affordable housing was supposed to be a priority. Don't rob the displaced to build a port."
Agency officials said there would be enough money in the housing fund to cover about 30,000 homeowners applying for grants to restore or rebuild property destroyed by the storm.
The development authority chose to tap the Homeowner Assistance Grant Program because it had excess funding, Donna Sanford, director of MDA's disaster recovery division, said in an e-mail to The Associated Press.
The proposal is open to public comment until Sept. 24, and organizations including Oxfam America and the Mississippi NAACP have said they will oppose it. The proposal needs approval from the U.S. Department of Housing and Urban Development.
Here's come more left-wing New York media—Businessweek—publishing a story about Barbour's attempt to divert housing funds on the Coast.
We need to figure out what (former?) Barbour clients would stand to benefit from this particular diversion to the port. What private entities are involved?
Great article, Adam. Again I say, Blind Trust, BARBOUR'S GOAL, RELATIVE'S TEA.
Suddenly, we're hearing more from Barbour about low-income housing on the Coast. Good. But we need to parse it when we get a minute.
FOR IMMEDIATE RELEASE
Tuesday, September 18, 2007
BARBOUR: LOW INCOME MISSISSIPPIANS BENEFIT FROM
Housing grants, tax credits, mortgage bonds, public
housing funds, long term workforce plan
all part of comprehensivehousing recovery strategy
(JACKSON, Mississippi) - With the Mississippi Development Authority’s
recent request for proposals for the long term workforce housing
program, Governor Haley Barbour’s comprehensive recovery strategy
continues to assist housing needs on the Coast, particularly for low
“Katrina didn’t discriminate. The storm leveled rich neighborhoods
and poor neighborhoods, so our challenge-and top priority-has been to
rebuild Coastal housing for all those affected,” Governor Barbour
said. “I’m proud of the policies we’ve set in place that help
low-to-moderate income Mississippians move back into their houses and
apartments, return to their communities and rebuild their lives.”
Governor Barbour’s comprehensive housing recovery strategy addresses
low-to-moderate income homeowners and renters. By enhancing housing
opportunities, the workforce and economic engines of the Gulf Coast are
able to find affordable housing.
The Homeowners Assistance Grant Program
This unprecedented relief measure provides grants directly to
homeowners to rebuild or repair damaged houses. As of September 18,
more than $1 billion of the program’s phase one grants had been
distributed to 13,886 applicants, with another $99 million distributed
to 1,409 applicants from phase two. Forty percent of phase one
recipients are low-to-moderate income homeowners, with over half the
household incomes under $40,000. In phase two, which was specifically
targeted to assist low-to-moderate income applicants, 80% of the
recipients qualify as low income with half the household incomes at less
Mortgage Revenue Bond
Governor Barbour allocated $120 million in bond authority to the
Mississippi Home Corporation to issue Mortgage Revenue Bonds throughout
the southern part of Mississippi, including the coastal counties. These
bonds create below-market interest rates and provide assistance with
closing costs equal to 3% of the loan, assisting nearly 1,000
low-to-moderate income families to realize their dreams of
Public Housing Authorities
The Governor directed $105 million in Community Development Block Grant
(CDBG) funds to assist the five public housing authorities in building
and reconstructing damaged or destroyed public housing along the Coast.
Additionally, the Governor directed the Mississippi Home Corporation
(MHC) to create a set aside in their funding rounds that will result in
1,275 rental units being constructed for public housing authorities.
GO Zone Low-Income Housing Tax Credits
The Gulf Opportunity Zone Act authorizes the MHC to allocate
approximately $106 million over three years in Low Income Housing Tax
Credits to encourage the construction and rehabilitation of
low-to-moderate income rental housing, serving people who make 60% or
less area median income. Governor Barbour has provided counsel to the
MHC to direct maximum funding to the coast. The GO Zone funding
allocations were completed in July 2007, enabling builders to begin
construction on $68 million worth of rental stock; additionally,
administrators anticipate 5,730 Low Income Housing Tax Credit units will
be built in the coastal counties over the next few years.
Small Rental Assistance Program
The Program is designed to spur development of workforce rental housing
along the Coast by providing $262.5 million in forgivable loans to
owners of small rental properties to create more affordable rental
housing for lower income families. Under the program, rental property
owners must commit to rent to low-to-moderate income residents, with
more than half of residents at 80% or less area median income. About
6,000 workforce rental-housing units are expected to be constructed and
rehabbed through the Small Rental Assistance Program. Application
guidebooks are now available and informational workshops hosted by MDA
were held last week.
Long Term Workforce Plan
Through this plan, proposals will be taken from for-profit and
non-profit entities to construct workforce housing along the
southern-most counties, including Hancock, Harrison, Jackson, and Pearl
River Counties. These proposals, which must meet HUD requirements
regarding low income families, will leverage private capital with CDBG
funds to construct single family, multi-family rental, and home
ownership units that will be available to mixed income tenants and/or
Other programs designed to assist all residents in the Gulf Coast area
include the Ratepayer and Windpool Mitigation Program, which helps
offset anticipated insurance premium and utility rate increases; the
Economic Development Program, which provides funding to assist local
governments in improving infrastructure; and Downtown Revitalization
Grants, which assist in the rebuilding of downtown areas for economic
development and job creation.
“Housing is and will continue to be the most pressing issue facing
Coastal recovery, but I’m confident that the bedrock for housing
recovery is dependant upon the faithful administering of these programs,
many of which are targeted at helping low income families,” Governor
The above programs are part of Governor Barbour’s comprehensive
housing recovery strategy and are administered by the Mississippi
Development Authority. For more details, please visit the MDA website
Fast forward to 2009, two years after Adam wrote the above piece about what Barbour and friends were doing with federal housing money after Katrina ...
The New York Times editorialized about the "hijacking" of federal funds for the Port in Sunday's edition. Money quote:
Congress may not be able to block the Gulfport project. But it needs to make sure that federal disaster aid is never hijacked this way again — and that money intended for affordable housing is spent on it.
The report paints a distressing picture of the affordable housing market in the state. It says the state was slow off the mark in spending federal money and once it got started, spent a large proportion on projects that were not targeted on the poorest people, who were “last in line for less relief.”