Sunday, October 22, 2006

Divvying Up $10 Billion

Ray NaginThe Times-Picayune reported on Mayor Nagin’s plans to submit funding requests to the state legislature earlier than planned because of perceived funding shortages for Katrina redevelopment. Congress allocated more than $10 billion to Louisiana in recovery aid, yet the bulk of that money is earmarked for the state’s housing crisis.

This leaves approximately $645 million dollars for parishes to redevelop critical infrastructure -- $200 million of which has already been awarded to assist Entergy, a major employer and provider of public utilities, leaving $445 million to be divided among 11 storm-damaged parishes.

This lack of funding for critical infrastructure development will likely place greater pressure on city planners to reduce the city’s footprint, i.e., concentrate redevelopment in limited areas, thereby maximizing the impact of reduced infrastructure redevelopment. This, in turn, will place greater pressure on the city to implement a little known restriction on the funding attached to the Road Home program. As first noted by Professor Rachel Godsil and the Urban Law Journal, the Road Home will restrict funding to buyout only options in areas where too few homeowners are choosing to rebuild their homes. The criteria for this funding restriction is left unarticulated. My concern is that this funding shortage will increase the pressure on Road Home administrators to cast a wider net on the areas in which homeowners will not have the opportunity to benefit from Road Home renovation funding.

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