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Blanco's 'housing trust' conflicts with Nagin's plan By Laura Maggi Capital bureau BATON ROUGE — A state housing trust would be in charge of doling out money for buyouts or reconstruction of flood-damaged homes, under a plan by Gov. Kathleen Blanco, setting up a possible conflict with a proposal by New Orleans Mayor Ray Nagin’s recovery commission. While state officials insist that local planning processes will determine where people can rebuild, the governor’s legislation makes it clear that she wants the state to retain the authority to dispense whatever grants or loans will be available to homeowners. That is at odds with Nagin’s Bring New Orleans Back Commission, which has proposed that a city-controlled entity be created to oversee the spending of federal dollars used to buy, sell and redevelop houses and neighborhoods. Nagin and commission members did not respond to e-mails and phone calls seeking comment late Wednesday. Andy Kopplin, the executive director of Blanco’s Louisiana Recovery Authority, said a state trust would help ensure that homeowners across south Louisiana with similar levels of damage receive equal treatment, regardless of whether they are in Orleans Parish or Cameron Parish. He emphasized that cooperation with local governments — and the decisions they make — will be key. “The state has got to be a partner with local government in the implementation,” Kopplin said. That means that if leaders in New Orleans or another area decide that certain neighborhoods should not be rebuilt, the state trust would be available to offer buyouts or relocation assistance. The idea of creating an entity called the Louisiana Housing and Land Trust is in response to President Bush’s rejection of a proposal by U.S. Rep. Richard Baker, R-Baton Rouge. Baker’s legislation, which now faces an uphill battle in Congress because of the White House stance, would have provided federal financing of buyouts through the selling of U.S. Treasury bonds, as well as creating a mechanism to coordinate the redevelopment of neighborhoods. Blanco’s housing trust would have some of the same powers as the corporation that Baker proposed to create, such as negotiating with mortgage lenders to restructure or refinance homeowner debt and bundle parcels of land that homeowners want to sell for large-scale redevelopment. All of this would be paid for through the $7.7 billion in Community Development Block Grants and hazard mitigation funds that Louisiana is slated to receive. During her speech to open the special legislative session Monday, Blanco said that she wants $4.6 billion of that money to be set aside to help homeowners with damaged houses. Another $1 billion could support the development of affordable housing for renters, while $1.75 billion would be used to repair hospitals, schools and other infrastructure with $350 million for possible business incentives. Kopplin and other state officials have repeatedly said that more money is needed to deal with the number of flooded homes, which the federal government pegs at 167,000 houses across the state that flooded during Hurricanes Katrina and Rita. They have pushed federal authorities to give the state more money to be used for helping uninsured and underinsured homeowners recoup their investments, Kopplin said. But they have not yet heard whether the Bush administration will support giving any more funds to Louisiana for that purpose. Donald Powell, Bush’s Gulf Coast rebuilding czar, would not comment Wednesday when asked at a Baton Rouge speech whether the administration would allocate any money for housing in the president’s $18 billion supplemental request to Congress for spending in the hurricane region. Powell said that his office will spell out what that money will be for in “15 to 30 days.” Kopplin would not provide details on how the buyouts offered by the state housing trust would work or estimate what individual homeowners could expect to get if the state is limited to the $4.6 billion to spend. For example, a program for buyouts or gap financing for homeowners who don’t have enough insurance money to rebuild could have income limits to make the available pot stretch further or the state could decide to just hand out a certain amount per house, he said. Late last week the head of Nagin’s commission, Mel Lagarde, said that members and city officials were working on proposals to flesh out the kind of buyout and repair offers that could be available in the city plan. One concept would offer more generous buyouts to homeowners in neighborhoods that are considered unlikely to rebound, while grants could be available to assist those who want to rebuild in areas expected to flourish. Sean Reilly, a Baton Rouge advertising executive who is an active member of Blanco’s recovery authority, said that creating a housing trust could make people more comfortable with the idea of an organization to coordinate redevelopment money. He said the quasi-public corporations that would have been created in the New Orleans plan or Baker’s proposal made some people nervous that their homes would be taken away from them. “This stresses that it is voluntary. You walk into the trust and talk about what the options are,” Reilly said. “One thing that is incredibly important, if this is to be a successful program, we must make it one that they don’t fear.” Reilly emphasized that the legislation does not include an eminent domain powers for the trust or the ability to expropriate property. The Legislature will get the first stab at this proposal, which was filed Wednesday as Senate Bill 49 by Sen. Ann Duplessis, D-New Orleans, in the Senate Local and Municipal Affairs Committee meeting today. The panel also will hear the rest of Blanco’s housing package, including legislation to designate non-profits as “recovery centers” where people can get counseling on refinancing their houses or other complicated matters. Another measure, Senate Bill 39 by Senate President Pro Tem Diana Bajoie, D-New Orleans, would provide what Blanco aides described as a “streamlined rehabilitation” process to rehabilitate property that has been abandoned or blighted. They said the proposal would allow for property to be put into receivership of a local government for rebuilding, but would not involve the “taking” of a property that can happen under existing laws. Staff writer Gordon Russell contributed to this report. Laura Maggi can be reached at lmaggi@timespicayune.com or at (225) 342-5590. |