FOR IMMEDIATE RELEASE October 11, 2005	Contact: Michele Anapol (202) 466-2121 x226 manapol@nhc.org

EXPERTS PROVIDE KEY HOUSING AND ASSET-BUILDING STRATEGIES FOR
HELPING VICTIMS OF HURRICANE KATRINA REBUILD THEIR LIVES

New NHC and Center for Housing Policy “Blueprint” Offers Guidance to Decision-Makers on Helping Families Rebuild Their Lives in the Gulf Coast or in Other Cities Nationwide

Washington, DC – Helping the displaced victims of Hurricane Katrina rebuild their lives is the focus of a new discussion paper released today by the National Housing Conference (NHC), and its research affiliate the Center for Housing Policy, entitled Housing and Asset-Building Challenges Beyond Emergency Shelter and Community Rebuilding. As decision-makers nationwide work to provide emergency shelter to families displaced by Hurricane Katrina and to rebuild devastated communities, this paper provides a Blueprint for addressing a third critical challenge – ensuring that displaced families are able to rebuild their lives whether in the Gulf Coast or in the cities nationwide where many now reside, and enabling them to rebuild their asset-bases.

This third challenge relates specifically to helping displaced families rebuild their homes and restore their possessions without being saddled with loan payments they cannot afford and minimizing the loss of home equity by those families who choose to relocate. These issues warrant serious attention because it is in the immediate aftermath of the hurricane that displaced and needy families are most vulnerable to land speculators, who may strip these families of their accumulated life savings in the form of home equity, causing great hardship and deprivation.

“While devastated areas are being rebuilt, displaced families need a way to not only survive but thrive,” said Jeffrey Lubell, author of the discussion paper. “Innovative strategies such as Silent Mortgages and Land Banks, along with policies that will help renters and other families resettle and accumulate savings, will help displaced families rebuild both their lives and the asset-bases on which their future financial success depends.”

Silent Mortgages

For those families that choose to return to the Gulf Region, in addition to the existing Small Business Administration (SBA) and Federal Emergency Management Agency grants, “silent mortgages” should be offered to help homeowners rebuild their homes. Silent mortgages allow families to defer repayment until money is generated from a sale of the house since these families may not be able to afford regular payments on an SBA loan. Payment of interest could also be contingent on home price appreciation so that families would be assured that the deferred interest would not eat up their equity in the house, ultimately preserving assets for retirement or educational expenses.

When considering families who would like to purchase a home and need downpayment assistance – whether they choose to return or relocate – small downpayment assistance grants combined with larger, silent second mortgages, could go a long way to helping relocating families purchase a home in their new communities.

Land Banks

To help those families that choose to relocate to new communities, Land Banks should be established to purchase any land that relocating families own in the disaster areas. In order to reduce the equity losses associated with temporary reductions in property values, these purchases should be either at pre-hurricane values or at post-hurricane values, with a conditional right to share in the benefits of any property value rebound that occurs between the time of purchase and final disposition by the Land Bank.

Addressing Long-Standing Poverty

In order to address the long-standing poverty of many families displaced by the hurricane, solutions are needed that are both place-based – focused on helping the people living in a specific area, such as a poor neighborhood in New Orleans – and people-based – focused on helping families wherever they are located. Individual savings accounts that match families’ savings and other asset-building strategies, along with subsidized child care, job training and transportation assistance are key components of a people-based anti-poverty approach.

Since many displaced families will be living in government subsidized housing, strategies tailored to promoting asset-building and self-sufficiency among residents of subsidized housing should be employed, including the Family Self-Sufficiency program, a U.S. Department of Housing and Urban Development asset-building building program administered by public housing agencies. The Jobs Plus demonstration, a place-based initiative that sought to provide strong work support to all adults living in particular public housing developments, represents another promising approach.

Additional housing and asset-building strategies detailed in the paper include:

• Emergency appropriations of Section 8 housing vouchers to help families afford the costs of private market rental housing in their new locations;

• Construction of new, permanent and affordable homes for renters and owners, along with new subsidies to ensure that the rebuilt housing is affordable to residents across a range of incomes;

• Expanded financial counseling services, including credit and bankruptcy counseling and financial and homeownership education, to help families recover from their hurricane losses, regain financial well-being and take better advantage of downpayment assistance;

• Assistance in paying for a security deposit and first or last month’s rent;

• Ongoing assistance for families that live in public or subsidized housing, and other displaced families with very low incomes;

• Job search and job training assistance to help adults find jobs;

• Assistance to help cities that absorb large numbers of displaced families handle education, health care and other costs; and

• Targeted savings incentives to match the regular savings of individuals impacted by the disaster.

To review these and other housing and asset-building strategies, please go to the Discussion Paper.

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