Friday, February 23, 2007

Two Quotes

On February 21 there was another congressional hearing in New Orleans this one was on housing. The Paper covered it extensively.

The Road Home program got a lot of flack.
Blanco said she expects to see more than 2,300 closings, and after March's quota of an additional 7,000, the monthly figure should grow by 10,000 per month.
At the rate of 10,000 a month it will take 10 more months to close all of the existing Road Home Applications, just in time for New Years 2008. She seems to consider that acceptable. No one I know of thinks its possible.

Not to be out done the Mayor weighed in,
"The Road Home program in its current format will not work," Nagin told a congressional subcommittee that met Thursday in New Orleans to address the housing crisis. "It is overwhelmed, undermanned and technically flawed. Let's take all the people registered for it in New Orleans and let us administer the program with local institutions. I think we can get it done for you very quickly."
I don't know which quote is scarier.

Friday, February 16, 2007

Mississipps vs. Louisiana

I thought it might be interesting to compare the Mississippi and Louisiana homeowner grant programs. Here are the latest comparable statistics on both. I have linked to the web site for each program which reports the weekly statistics.


Total applications received: 107739
Appointments scheduled or held: 77487

Benefits calculated: 37369
Closings held: 632

Amount of benefits calculated: $2,950,000,000.00

Dollar Value of Grants Paid
(est.) $705,543,407.00

The amount of grants paid in Louisiana is not reported so I estimated it by multiplying the average grant calculated by the number of closings. I suspect the amount of grants calculated for Louisiana is higher than the amount that will ultimately be awarded, as it may include elevation and mitigation grants not paid.

In looking at the Louisiana Road Home Statistics I was unable to find an archive of the weekly statistics for previous weeks. Neither program is in the Wayback Machine. If anyone is aware of such a list please let me know.

A comparison of the programs is also interesting. It's important to note that the Mississippi program is significantly different from the Louisiana Road Home Program. The Mississippi program is divided into two phases.

Phase I. The Mississippi Homeowner Grant Assistance program is a one-time grant payment, up to a maximum of $150,000, to eligible homeowners who suffered flood damage to their primary residence.

Eligibility Requirements
• Homeowner owned and occupied their home as of August 29, 2005.
• Home was located in Harrison, Hancock, Jackson or Pearl River Counties.
• Home was homeowner’s primary residence on August 29, 2005.
• Homeowner maintained homeowners insurance on the property.
• Home was located outside the pre-Katrina designated flood zone.
Phase II is limited to $50,000. To be eligible for the Phase II Assistance Program, applicants must have:
• Owned and occupied a home as a primary residence on August 29, 2005
• Owned a home located in Hancock, Harrison, Jackson or Pearl River Counties.
• Owned a home that received flood surge damage as a result of Hurricane Katrina
• Had a household income at or below 120% of Average Median Income (AMI)
In contrast the Louisiana Road Home Program is available to all homeowners, regardless of location and cause of their loss.

Road Home Eligibility Information. For homeowners to qualify for assistance through The Road Home program:

  • You must have owned the home as your main residence at the time of the Hurricanes.
  • Your home must be a single- or double-unit structure.
  • Your property must have at least $5200 in damage from hurricanes Katrina or Rita.
  • Homeowners who were uninsured but should have carried insurance (for example, those who lived in a flood plain but did not have flood insurance) are eligible for the program, but they will incur a 30 percent penalty.

Most people in New Orleans would not qualify for Phase I of the Mississippi program, which is almost complete. They would qualify for the Phase II program which offers only one third the compensation and is income limited but which has not started yet.

Wednesday, February 14, 2007

The Long and Winding Road Home

I have some good news and some not so good news.

First the not so good news. When we had our appointment with Road Home we were told to call back at any time and they would be able to tell us the status of our application. It tool two weeks of daily calls to get someone to call back. All we were trying to do was to find out if the evaluator had visited our house.

The good news. I actually have something nice to say about Road Home and ICF. When we had our appointment on January 19. We were told it would take seven to ten days for an evaluator to visit our house. We waited two weeks to call just to be sure they had enough time to get out there, anticipating they wouldn't have made it yet. After we finally got someone on the phone, it turns out that an evaluator went out January 20, the very next day. Our information was sent to Baton Rouge for something on January 22. I'm stunned.

We are told it will be six to eight weeks before they tell us the result. We are now more than three weeks into the six to eight weeks.

Saturday, February 03, 2007

Road Home Math - Calculating the Grant

From the Road Home Web Site FAQ;
"Road Home compensation benefits are determined by calculating the lesser of the uncompensated damage cost or the uncompensated loss of value up to $150,000."
The Road Home Grant calculation can be expressed in a fairly simple formula;
  • Where
    • G = The Road Home Grant.
    • V = The Pre Storm Value.
    • R = The Cost of the Repair.
    • C = The total received from Property, Flood Insurance and Other Compensation.

  • If (V<R) then (G=V-C) else (G=R-C)

The two most important and subjective inputs for the Road Home Formula are the Pre-Storm Value and the Cost of Repair. I've been collecting information from Road Home Option Letters and although I don't have a large enough number of examples to reach a statistically valid conclusion. I do have a couple of observations.

The Cost of Repair is remarkably constant at $110-$130 per square foot. Most of the houses I have information on were merely flooded and had little wind damage. The cost of repair varies very little, there are a couple of exceptions with values in the $60-$70 per square foot range. These houses might be two story houses which didn't flood above the first floor. If that is the case the figures are even more constant. This is also consistent with press reports and public statements by LRA officials.

The Pre-Storm Value varies significantly more. The thing is, it seems fairly consistent within a neighborhood. I find that where there are clusters or even a couple of houses in a neighborhood the square foot value is consistent and generally below what I thought the market was. I really don't have enough information to generalize beyond that.
  • I have constructed a Google Spreadsheet where you can play with your numbers. (You need a free Google Account to access it.)

  • Road Home publishes up to date statistics here.
As always when I write about Road Home, I ask you please send me your particular information and I will incorporate it into my analysis, and of course I have no inside information. I gather my information from people willing to share and from public sources.