On September 15, 2005, two weeks after Hurricane Katrina crashed into the Gulf Coast, President Bush stepped before a dazzling glow of lights in the otherwise dark city of New Orleans and made several promises to those who had just lost so much. One of the most intriguing was a pledge to bring the city’s displaced home through a pioneering program of urban homesteading.
Noting that “homeownership is one of the great strengths of any community,” Bush described a plan compelling in its simplicity. “We will identify property in the region owned by the federal government, and provide building sites to low-income citizens free of charge, through a lottery,” the President said. “In return, they would pledge to build on the lot, with either a mortgage or help from a charitable organization like Habitat for Humanity.”

Bush’s homesteading proposal captured the imagination of Pam Dashiell, a grandmother who fled her rental home in the inundated Lower Ninth Ward to seek refuge in a St. Louis hotel room. Dashiell was eager to take advantage of the opportunity it offered.

“Something like that would have been wonderful,” Dashiell says. “It would have allowed people who were displaced to have a real stake in the rebuilding. So much of the emphasis has been on people who already owned their homes, but there were so many renters who loved the city dearly and wanted to come back.”

But like so many of the promises made and plans hatched in Katrina’s aftermath, the homesteading initiative was quickly abandoned, replaced by a series of scattershot efforts that have kept tens of thousands of people from returning home to New Orleans and other Gulf communities.

“Few of the things that people said were going to happen here actually happened,” says Dashiell, who has since returned to another rental in her old neighborhood. “So far there has not been much promise-keeping.”

To look at what happened to President Bush’s homesteading promise is to see writ small the larger dysfunctions that have stymied the Gulf Coast rebuilding efforts.
There was precedent for Bush’s housing plan. The Homestead Act of 1862 fueled westward expansion by allowing U.S. residents to earn title to up to 160 acres by working it for five years. A century later, the Housing and Community Development Act of 1974 made urban homesteading a part of “urban renewal” efforts, making rundown houses available at low cost in return for the buyer’s commitment to fix up and occupy the property.

Bush was the first President to offer a homesteading proposal in response to a disaster, and two weeks after his New Orleans speech, the U.S. Department of Housing and Urban Development unveiled a detailed plan. Families earning less than 80 percent of the median income could enter a lottery to receive property, in exchange for a pledge to make it their primary residence for at least five years. Homesteaders would also have a year to remove health and safety hazards, and three years to meet local housing standards.

Congressional Democrats swiftly attacked the plan, documenting its limits in addressing the staggering housing crisis. Democratic Representatives Barney Frank, Maxine Waters, and Artur Davis pointed out that it would have excluded many people left homeless by the storm and would have failed to meet the tremendous need. It would have made 2,000 units available, even though about 900,000 homes were lost or damaged in the storm. In addition, the program would have done nothing to address the vast destruction of rental units, which represented 55 percent of housing lost in New Orleans. Frank, then the ranking Democrat on the House Financial Services Committee that he now chairs, called the proposal “substantially inadequate.”

Three months after Bush had announced the homesteading plan, the Republican Congress finally introduced legislation. But neither he nor the Republican leadership pushed for it.

When the urban homesteading measure floundered in the Senate, Republicans blamed the Democrats. In a February 2006 Senate hearing on post-Katrina rebuilding, Senator Wayne Allard of Colorado insisted that even though the small-scale homesteading bill wouldn’t “meet all existing and future needs,” it was still “very worthwhile.” But Senator Mary Landrieu, a Louisiana Democrat, called for focusing on a more “comprehensive approach.”

“Senator Allard believed that the Urban Homesteading initiative was an important component of addressing the housing needs of the Gulf area,” says Allard spokesperson Steve Wymer. “Unfortunately, several witnesses, including Senator Mary Landrieu, did not express support for the bill, and housing legislation generally needs to receive bipartisan consent to pass the Senate.”

For her part, Landrieu spokesperson Stephanie Allen says the Senator did nothing to scuttle the bill but simply chose to concentrate on a broader plan.

On the House side, the homesteading initiative died due to a lack of enthusiasm among Republicans themselves, as the proposal never even received a hearing in that chamber. Meanwhile, the Bush Administration made no effort to strike a compromise and ensure the President’s promise was kept. Like its Congressional allies, it simply allowed the proposal to die.

However, just because Republicans were unwilling to push a plan that did not have the strong support of Louisiana’s senior Senator didn’t mean they would necessarily support the housing solution she championed—or any other comprehensive plan to bring Gulf Coast residents home.

Landrieu backed what came to be known as the Baker Plan for its sponsor, Representative Richard Baker, Republican of Louisiana. His bill would have created a federal corporation to buy damaged properties from landowners at 60 percent of their pre-storm equity and pay off mortgage holders at 60 percent of their remaining debt. The corporation would have cleaned the properties and sold them to developers, who would have rebuilt according to guidelines crafted by local governments and civic groups. Homeowners would have had the choice to accept the buyout and walk away, accept it with an option to return, or refuse to sell and repair the property themselves.
“This could have given compensation to victims right away,” said Landrieu spokesperson Allen. “It would have allowed for real community planning in the disaster area.”

The Baker Plan “made a lot of sense,” says Sheila Crowley, president of the National Low Income Housing Coalition. She points out that the legislation was reported out of the House Financial Services Committee in December 2005 by a 50-9 vote. It even authorized the corporation to operate an urban homesteading program like the one Bush had promised.

But the Administration vehemently objected to the Baker Plan, mostly on ideological grounds. Donald Powell, Bush’s Gulf Coast rebuilding coordinator, detailed those objections in a February 2006 op-ed for The Washington Post.

The President has “established important principles that will guide the federal role in the response” to hurricane rebuilding, Powell wrote. One of those principles is that “markets must be able to work properly without interference from the government.”

Representative Baker was furious. “That Mr. Powell would take out op-ed space specifically to undermine my legislation is disappointing, to say the least,” he said at the time. “That he would use that column to spread gross mischaracterizations of the legislation is just disturbing. If I had any worries that my legislation was dead, I am now certain that it isn’t, or else Mr. Powell would not be shooting at it.”

But dead it was. In its place rose The Road Home, developed by Louisiana Governor Kathleen Blanco and the state-created Louisiana Recovery Authority in negotiations with the White House and Powell. Funded initially with $8.1 billion in federal Community Development Block Grants, the program provides individual homeowners with rebuilding grants of up to $150,000 per home. By almost every account, The Road Home has been a disaster. The program faces a shortfall of at least $5 billion due to more homeowners qualifying for aid than was originally projected. ICF International—the Virginia-based company selected to administer the program under a three-year, $756 million contract—has come under fire for its glacial pace in getting money to storm victims; as of June of this year, the program had received almost 143,000 applications for assistance but had held fewer than 25,000 closings. The Louisiana legislature even passed resolutions calling on Blanco to fire ICF, which she refused to do out of fear that it would further slow assistance.

The lack of progress on housing has kept thousands of the Gulf Coast’s people in nearly two years of limbo. Walter Thomas, a New Orleans cancer patient living in a government-issued trailer since his Lower Ninth Ward home was destroyed, recently testified before a Senate subcommittee about delays in getting his Road Home money.

“Every time I called I got the same answer, ‘Someone will give you a call back,’ ” said Thomas. He was still waiting.

Pam Dashiell has heard similar reports from neighbors. She knows of maybe four people who’ve been allocated funding from The Road Home, “and those four haven’t received the funds promised,” she says. “It’s something that’s not helped many people.”

Particularly people like her. While The Road Home this year finally began offering some aid for small rental property owners, it’s done nothing to help renters directly.

The President’s homesteading initiative, for all its flaws, at least would have given some of the storm’s poorest victims a shot at the American dream of owning a home.
Not a single person benefited from that initiative, however.

But Dashiell notes there is still time. “It’s not too late to make good on the promises,” she says.

Susan Sturgis is co-editor of Gulf Coast Reconstruction Watch, a project of the Institute for Southern Studies (www.southernstudies.org).