Following the devastating destruction of hurricanes Katrina and Rita, the U.S. Department of Housing and Urban Development (HUD) and the Louisiana Recovery Authority (LRA) established a home rebuilding program known as Road Home to get residents back to the region. With $11 billion in federal funds, the Road Home awards grants to Louisiana homeowners whose homes were damaged by the storms in 2005. In approving the funds for the Road Home, Congress required that the money be distributed on an equal opportunity basis and in a manner that affirmatively furthers fair housing in the area. The homeowners and fair housing groups suing HUD and the LRA (the Plaintiffs) allege HUD and the LRA have failed to aid black and white homeowners fairly, with black homeowners receiving repair grants that fall far shorter of meeting the cost of repair than grants to white homeowners.
The amount of a homeowner’s grant is determined based on the lesser of two amounts: the pre-storm value of an individual’s home or the cost of repairing the home. In New Orleans, as in many communities in the U.S., homes in predominantly black neighborhoods have lower market values than comparable homes in white neighborhoods. As a result, black homeowners’ grants are 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 though the cost of repair is the same no matter what race the homeowner is. In contrast, white homeowner’s grants are larger and more likely to meet the repair costs. The Plaintiffs claim that using a grant formula that awards black homeowners less favorable grants than white homeowners violates both the Fair Housing Act of 1968 and the Housing and Community Development Act of 1974 (HCDA). Coming to the defense of the Plaintiffs, who represent themselves and over 20,000 families similarly situated, the NAACP Legal Defense Fund (LDF) agrees.
The Fair Housing Act of 1968 outlawed discrimination in housing based on race, including discrimination in the administration of housing-related programs and activities. LDF believes HUD and the LRA have violated the Fair Housing Act by denying African-American homeowners Road Home grants large enough to cover their home repairs while awarding white homeowners more appropriate grants. In addition, LDF supports the Plaintiffs’ claim that HUD and the LRA failed to administer the HCDA block grant program. LDF asks that the court require the Defendants to stop using the discriminatory formula and recalculate black homeowners’ grants based on the cost of repairing their homes. LDF’s goal is to have the Road Home achieve its stated purpose: enable all residents of New Orleans to rebuild and return home, regardless of their race.