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Legal Defense Fund Wins Relief for Victims of Post- Katrina/Rita Housing Discrimination

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8/16/10

(New York) – Today a federal court in Washington, DC, prevented Louisiana from continuing to utilize a discriminatory formula as part of the federally-funded “Road Home” Program, which was designed by the Louisiana Recovery Authority and approved by the U.S. Department of Housing and Urban Development (“HUD”) to aid homeowners in their efforts to rebuild in the wake of devastating damage resulting from Hurricanes Rita and Katrina.

With $11 billion in federal funds, the Road Home Program awards grants to Louisiana homeowners whose homes were damaged by the storms in 2005 using one of two formulas: either the pre-storm value of the home in question, or the cost of repairs, whichever is lower. In today’s ruling, the Court determined that using the pre-storm value of the home to calculate grant awards likely creates a discriminatory impact on African-American homeowners, as black homeowners’ grants are far more likely to be based on the lower, pre-storm value of their homes rather than the cost of repairing the damage to their homes – even when the damage sustained and the cost of repair is the same. This disparity means that African-American homeowners are likely to have bigger gaps in the resources necessary to rebuild their homes. In its order, the Court granted the plaintiffs’ request to prevent Louisiana officials from using pre-storm value to calculate any future Road Home grant awards.

“It is our hope that this is the first step in truly getting folks on the road home. Today’s ruling is a rebuke of HUD and Louisiana.  The flawed Road Home Program is part of the reason why the pace of recovery has been so slow five years after the storms ravaged the Gulf Coast,” said John Payton, LDF President and Director-Counsel.

Last month the plaintiffs filed a separate motion for preliminary injunction asking for a freeze in spending surplus Road Home funds until the conclusion of the pending lawsuit, so that the surplus funds could be used to make up the difference to those families who suffered discrimination. The Court denied that motion but found a “strong inference” of discrimination. Today’s decision does not address those who already received funding under the program, but prevents the discriminatory formula from being applied to future grants.

The plaintiffs in the case are the Greater New Orleans Fair Housing Action Center, the National Fair Housing Alliance, and individual homeowners representing others who suffered discrimination.  Lawyers from the law firms of Cohen, Milstein Sellers & Toll and WilmerHale are co-counsel.