Order Code RL33173
Hurricane Katrina: Questions Regarding
the Section 8 Housing Voucher Program
Updated January 8, 2007
Maggie McCarty
Analyst in Social Legislation
Domestic Social Policy Division

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Hurricane Katrina: Questions Regarding
the Section 8 Housing Voucher Program
Summary
Hundreds of thousands of families were displaced from their homes by
Hurricane Katrina. Many of the displaced families lacked economic means before
the storm; others may have become disadvantaged because of the storm. The role of
the federal government in helping to meet both the short- and long-term housing
needs of displaced families remains under debate within the Administration, in
Congress, and in the news media, and questions persist regarding the appropriate role
of the nation’s largest housing assistance program for the poor — the Section 8
voucher program — in the wake of the storm. This report focuses on three questions:
What impact did the hurricane have on existing voucher holders? To what degree did
the program serve displaced families who had not previously received a voucher?
And should the program play a larger role in serving displaced families in the future?
The voucher program played a minor role in serving the overall population of
affected families. The Department of Housing and Urban Development (HUD)
focused primarily on serving the estimated 44,000 displaced families who had
already received HUD assistance or were homeless before the storm. Initially, Public
Housing Authorities (PHAs) in other parts of the country were encouraged to give
these families priority for existing vouchers. Later, HUD and the Federal Emergency
Management Agency (FEMA) announced a new Katrina Disaster Housing Assistance
Program (KDHAP). Under KDHAP, FEMA funded HUD to provide vouchers to
displaced, HUD-assisted families. Most recently, a supplemental funding measure
transferred funding for KDHAP from FEMA to HUD’s Section 8 tenant-based rental
assistance account. HUD renamed the program the Disaster Voucher Program (DVP).
The majority of displaced families, however, did not receive HUD assistance
before the storm. To serve these families, some PHAs allowed otherwise-eligible
families displaced by the hurricane to jump to the top of local waiting lists. Other
PHAs considered adopting such a policy, but decided that the need was too great in
their own communities. The demand for vouchers nationwide is greater than the
supply; thus few existing vouchers are available to new families. Advocates from
across the political spectrum called for the creation of new vouchers for displaced
families. They claimed that vouchers are more cost-efficient, provide more family
choice, and can avoid many of the problems associated with such policies as the
temporary provision of trailers. Some Members of Congress introduced bills in the
109th Congress to authorize and fund new vouchers (S. 1637, S. 1765 and S. 1766),
or to make changes to the current program (H.R. 3894), but none were enacted.
In lieu of vouchers, the Administration chose to provide families with short term
stays in motel rooms, cash grants, and trailers through FEMA. This approach came
under criticism, and Administration reviews post-Katrina have recommended major
changes to the way housing assistance is provided, including transferring temporary
housing responsibilities to HUD. This report will not be updated.

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Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Introduction to the Voucher Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Effects on the Voucher Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Initial Guidance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
KDHAP and the Disaster Voucher Program . . . . . . . . . . . . . . . . . . . . . . . . . 5
Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Use of Existing Vouchers for Displaced Families . . . . . . . . . . . . . . . . . . . . . . . . . 9
Creation of New Vouchers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
FEMA Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

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Hurricane Katrina: Questions Regarding
the Section 8 Housing Voucher Program
Introduction
Hurricane Katrina’s devastation to the nation’s housing stock was
unprecedented. The 2005 hurricanes (Katrina, Rita, and Wilma) and their related
flooding were estimated to have damaged 1.2 million units of housing; of those, over
300,000 were seriously damaged or destroyed.1 The Congressional Research Service
(CRS) estimated that 700,000 people may have lived in the areas most adversely
affected by Hurricane Katrina, and were most likely to be displaced.2 Data provided
to CRS by FEMA in June 2006 showed that, at peak, approximately 1.25 million
people were living outside their original zip code because of Hurricanes Katrina and
Rita.3
These displaced families fell into a range of categories. Some were
homeowners whose property sustained only minor damage and who quickly secured
loans to begin repair. Some were homeowners whose property sustained massive
damage and who were left waiting, even a year later, for information on their
insurance settlements and options. Some were renters whose dwellings were quickly
repaired, while others were renters whose dwellings will never be rebuilt. Some were
homeless before the storm — about these people little is known. Even within these
categories there is variation. Some of the families found permanent homes in new
communities, others stayed with friends and family temporarily but were able to
make their way back, and still others, a year after the storm, are still displaced and
unsure whether they will ever return. Some of these families were economically
stable, had sizeable savings, good insurance, and were able to maintain their
employment; others were economically unstable before the disaster and lost what
little they had. Many probably fell somewhere in between.
The full effect of Hurricane Katrina and the circumstances of the families
affected may never be fully known. However, existing data provide some insights.
For example, CRS estimates that the poverty rate in the Katrina-damaged areas was
21% in 2000 — well above the national poverty rate of 12% — and the rate of
1 U.S. Department of Housing and Urban Development, Office of Policy Development and
Research, Current Housing Unit Damage Estimates: Hurricanes Katrina, Rita, and Wilma,
February 12, 2006.
2 See CRS Report RL33141, Hurricane Katrina: Social-Demographic Characteristics of
Impacted Areas, by Thomas Gabe, Gene Falk, Maggie McCarty, and Virginia Mason.
3 Based on e-mail communication with Heather Smith, Congressional Affairs Specialist,
Office of Legislative Affairs, FEMA, June 20, 2006.

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CRS-2
homeownership in Katrina-damaged areas was 55%, compared with 66% nationally
in 2000.4 In light of the characteristics of the damaged communities — poorer than
average and more likely to rent — it is not surprising that many questions arose about
the role of the nation’s primary housing assistance program for the poor, the Section
8 Housing Choice Voucher program. These questions generally fall into three
categories. First, what was the effect of the hurricane on existing voucher holders in
the damaged regions? Second, to what extent is the program being used to serve
displaced families, regardless of whether they previously received vouchers or other
HUD assistance? Third, to what extent, if at all, should the program be modified and
expanded to serve additional displaced families? This report also reviews the forms
of assistance FEMA has provided to displaced families in lieu of Section 8 vouchers.
Introduction to the Voucher Program5
To answer these three questions, it is important first to understand what the
Section 8 voucher program is and how it works. Section 8 vouchers are rent
subsidies that poor families can use to reduce their housing costs in the private
market to an “affordable” level.6 Families with vouchers pay 30% of their incomes
toward rent, and the federal government pays the difference between the families’
contributions and the actual rent, up to a limit.7 That limit is called the payment
standard, and its value ranges between 90% and 110% of the local Fair Market Rent
(FMR).8 Very low-income families are eligible for vouchers, and extremely low-
income families are given priority for vouchers.9 The subsidies are portable, meaning
that families can move anywhere in the country with their vouchers. The demand for
vouchers is greater than the supply. In some communities, waiting lists are many
years long; in others, the waiting lists are closed.
The Department of Housing and Urban Development (HUD) oversees the
Section 8 voucher program at the federal level, but the program is administered at the
local level by quasi-governmental Public Housing Authorities (PHAs). More than
4 See CRS Report RL33141, Hurricane Katrina: Social-Demographic Characteristics of
Impacted Areas, by Thomas Gabe, Gene Falk, Maggie McCarty, and Virginia W. Mason.
5 For more information about the Section 8 voucher program, see CRS Report RL32284, An
Overview of the Section 8 Housing Program, by Maggie McCarty.
6 Housing is generally considered affordable if it costs no more than 30% of a family’s
income.
7 The formula is more complicated than presented here. For more information, see CRS
Report RL32284, An Overview of the Section 8 Housing Program, by Maggie McCarty.
8 The FMR is set annually by HUD for every community in the nation. It is calculated as
the 40th percentile rent for a two-bedroom apartment and is adjusted for bedroom size. It is
meant to represent the cost of modestly priced housing. The national average FMR for a
two-bedroom apartment in 2005 was $786 per month, although that average masks wide
variation. For a list of national FMRs, see [http://www.huduser.org/datasets/fmr.html].
9 Very low income is defined as income at or below 50% of area median income; extremely
low income is defined as income at or below 30% of the local area median income [42
U.S.C. 1437a(b)(2)]. Under the law, 75% of all vouchers must be give to extremely low-
income families [42 U.S.C. 1437(b)(1)].

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2,000 PHAs participate in the program, and each receives an allocation of the more
than 2 million vouchers currently authorized and funded by Congress. PHAs run
their programs on a fixed budget, determined by a formula developed annually by
Congress. For calendar year 2005, each PHA received a sum based on its voucher
costs during a three-month period in 2004, plus inflation. PHAs also receive
administrative fees that in recent years have been based on what they received in the
prior year. Congress provided almost $15 billion for the voucher program in FY2005
(for use by PHAs in CY2005).10
In each of the past three years, the Administration requested that Congress enact
a major reform of the voucher program, based on concerns that the program’s costs
are growing too rapidly, that its benefit formula discourages work, that the program
rules make it too administratively complicated, and that error rates in subsidy
calculations are too high. Each proposal would have eliminated most of the federal
rules that govern the program, and given greater discretion to states or PHAs. Low-
income housing advocates have criticized the proposals for not providing enough
protections for low-income families. Congress did not enact the requested reforms,
although bills were introduced in the 108th and 109th Congresses.11
Effects on the Voucher Program
Hurricane Katrina affected both PHAs and assisted families. Some PHAs in the
path of the storm temporarily ceased operations, including the Housing Authority of
New Orleans (HANO) and the Housing Authority of the City of Slidell. Others took
in displaced voucher holders, most notably the Housing Authority of the City of
Houston. An unknown number of families in the hurricane-damaged areas were
receiving federal help with their housing costs, either through a Section 8 housing
voucher or by living in federally subsidized rental housing, such as public housing,
before the storm hit. While these families retain their assistance, the process of using
this assistance in other areas can be cumbersome. HUD developed several policies
and procedures for storm-affected agencies and families to follow.12
Initial Guidance
On August 31, 2005, HUD posted on its website a list of immediate and pending
actions it would take in response to the hurricane. Immediate actions included the
identification of vacant public housing units available for displaced families and the
10 For more information, see CRS Report RS22376, Changes to Section 8 Housing Voucher
Renewal Funding, FY2003-FY2006, by Maggie McCarty.
11 See CRS Report RL33270, The Section 8 Housing Voucher Program: Reform Proposals,
by Maggie McCarty, for more details of these proposed reforms.
12 For more information on HUD’s responses to Katrina beyond the voucher program, see
CRS Report RS22358, The Role of HUD Housing Programs in Response to Hurricane
Katrina, by Maggie McCarty, Libby Perl, and Bruce E. Foote.

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issuance of regulatory waivers.13 Longer-term actions included the establishment of
a redevelopment corporation14 and a proposed new residential-homes tax credit for
developers.15
On September 3, 2005, HUD announced that it had established a toll-free
number for displaced public housing and voucher residents to call for assistance.16
Guidance issued that same day informed PHAs on how to serve displaced families.
Under existing authority, PHAs could use vacant public housing units for either
displaced public housing residents or displaced voucher holders, and they could
provide available vouchers to displaced public housing residents. However, in order
to prioritize displaced HUD families for assistance, PHAs must first amend their
PHA plans if a preference for disaster-affected families is not already included.17 A
PHA’s board must approve any changes, and can determine whether they are
significant enough to warrant a public hearing.
The same guidance reminded PHAs that they must accept families with
vouchers who wish to move, or port,18 into their jurisdiction. The PHAs can then
choose whether to take a family into their own programs and fund the vouchers
themselves, a process called absorbing — or administer the voucher on behalf of the
pre-disaster PHA, a process called billing. There are pros and cons to both options.
Billing requires more complicated paperwork, payments can be delayed, and the
receiving housing authority is entitled to only 80% of the originating PHA’s
administrative fees. Billing can also present problems for originating agencies when
families move to more expensive areas, since the PHAs are required to pay the
13 Following any disaster, HUD has the authority to waive certain statutory and regulatory
requirements in the voucher program for PHAs in disaster areas, as well as those serving
families affected by the disaster. PHAs must request waivers, and not all program rules are
eligible for waiver. See Federal Register Notice, Regulatory and Administrative Waivers
Granted for Public and Indian Housing Programs to Assist with Recovery and Relief in
Hurricane Katrina Disaster Areas, Sept. 27, 2005 [http://www.hud.gov/offices/pih/
publications/katrinapihadminwaiv.pdf].
14 On Nov. 4, 2005, Executive Order 13389, Creation of the Gulf Coast Recovery and
Rebuilding Council, and Executive Order 13390, Establishment of a Coordinator of Federal
Support for the Recovery and Rebuilding of the Gulf Coast Region, were published in the
Federal Register.
15 Legislation creating a redevelopment tax credit has not been enacted as of this update.
16 HUD news release No.05-117, HUD Establishes Toll-Free Number For Section 8
Voucher Holders and Public Housing Residents, Sept. 3, 2005.
17 PHAs must complete two plans, a five-Year Plan, which each PHA submits to HUD once
every fifth year, and an Annual Plan, which is submitted to HUD every year. These plans
spell out the agencies’ policies, programs, operations, and strategies for meeting local
housing needs and goals. For more information, see 24 C.F.R. 903.3 et. seq.
18 Vouchers are nationally portable, meaning that they can be used anywhere in the country
where a voucher program is being administered. When families move from the jurisdiction
of one PHA to another, the process is referred to as “porting,” and vouchers that have moved
from one jurisdiction to another are often referred to as “portability vouchers.” The agency
from which the family moves is typically referred to as the originating agency, and the
agency to which the family moves is typically referred to as the receiving agency.

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increased subsidy. Absorbing is simpler administratively; however, it requires the
receiving PHA to allow porting families to jump ahead of other families on the
waiting list for available vouchers. HUD’s September 3, 2005 guidance encouraged
PHAs to show utmost flexibility, stating:
Do not let portability billings get in the way of providing vouchers to displaced
voucher holders from any of the PHAs affected by Hurricane Katrina. The
Department will make sure that PHAs are paid for legitimate ports from affected
PHAs.
KDHAP and the Disaster Voucher Program
On September 24, 2005, the Secretaries of HUD and the Department of
Homeland Security (DHS) announced a new initiative for HUD-assisted families
displaced by Hurricane Katrina. The Katrina Disaster Housing Assistance Program
(KDHAP) was funded by DHS through its sub-agency, the Federal Emergency
Management Agency (FEMA) — but was administered by HUD.19 HUD issued
guidance on the new program on October 4, 2005.20 The program provided a new
form of rental housing voucher, a KDHAP voucher, to displaced HUD-assisted
families. KDHAP was meant to eliminate the need to prioritize displaced families
over other families for available assistance and eliminate portability billings.
In December 2005, a supplemental appropriations bill attached to the Defense
Department FY2006 Appropriations bill (P.L.109-148) transferred $390 million from
FEMA’s Disaster Relief Fund to HUD’s Section 8 tenant-based rental assistance
account for Katrina rental assistance. HUD issued guidance on February 3, 2006
implementing a new Disaster Voucher Program (DVP) to replace the KDHAP
program.21 DVP differs from KDHAP in several ways. First, DVP is governed by
Section 8 rules, unlike KDHAP, although the Secretary is permitted to waive income
and eligibility requirements. The amount of subsidy provided is capped at a level set
by local PHAs for the voucher program, called a payment standard, rather than the
fair market rent, as under KDHAP. Security deposit and utility deposit assistance,
which was guaranteed under KDHAP, is provided at the discretion of the PHA under
DVP. Initially, not all families that were eligible for KDHAP assistance were
eligible for DVP assistance, although Congress later amended DVP to cover all
KDHAP-eligible families.22 Finally, KDHAP was limited to Hurricane Katrina
evacuees, whereas DVP is available to both Hurricane Katrina and Rita evacuees.
19 The agreement between FEMA and HUD is called a mission assignment. Mission
assignments are contracts between FEMA and other federal agencies through which these
agencies agree to provide some form of essential assistance and FEMA agrees to reimburse
them for their costs. The term is defined at 44 C.F.R. 206.2(a)(18).
20 Katrina Disaster Housing Assistance Program Interim Operating Requirements, Oct. 4,
2005, available at [http://www.hud.gov/offices/pih/publications/kdhapopreq.pdf].
21 HUD Notice PIH 2006-12, February 3, 2006.
22 Families living in Section 236, 236(b), and 221(d)(3) BMIR units without Section 8
contracts and those living in units with Rental Assistance Payment (RAP) or Rent
Supplement assistance were eligible for KDHAP but were not initially eligible for DVP.
P.L. 109-234 expanded eligibility for DVP to include these families.

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Structure. Families who were homeless or receiving rental assistance from
HUD before their homes were made uninhabitable by Hurricane Katrina are eligible
to receive DVP assistance.23 DVP provides a monthly rent subsidy equal to the lesser
of the PHA’s payment standard or the actual rent, for up to 18 months.24 Families are
not required to make a minimum payment, although they are required to pay any
rental costs above the payment standard. For many families, this will mean a
reduction in their housing costs, since under most HUD rental assistance programs,
families are required to contribute at least 30% of their incomes toward their housing
costs. Families must pay the costs of utilities not included in the rent, although PHAs
can provide a utility allowance to families. Like the Section 8 voucher program, DVP
is administered by PHAs. PHAs that choose to participate are paid a flat fee of
$1,500 for each DVP family that they house (up from $1,000 under KDHAP), plus
an ongoing administrative fee equal to 10% of the voucher.
The DVP process differs for families depending on whether the family requested
assistance after the DVP program was announced, the family received KDHAP
assistance prior to the announcement of DVP, or the family received assistance under
normal portability procedures before either KDHAP or DVP were announced.
New families enter the program after they apply to a PHA or call a national toll-
free intake number established by HUD. The PHA or the intake worker at the call
center first screens the family for eligibility by cross-referencing them with a
database of eligible families maintained by HUD. If the family’s original project-
based assistance unit is available for occupancy, the family is given the option to
move back. If the family chooses not to move back, they are instead given a DVP
voucher, although they forfeit their right to return to their original housing and will
have to reapply for assistance at the end of their DVP eligibility. If the family’s
original housing is not available, then the family is given a DVP voucher with the
right to return to their original unit when it becomes available or at the end of their
DVP eligibility.
Once a family is awarded a DVP voucher, the family is either admitted by the
PHA or referred to a participating PHA in the area of the country where the family
wishes to relocate. PHAs heavily affected by the hurricanes can choose to serve their
returning families under the DVP program rather than the regular voucher program
and HUD has encouraged them to do so, noting that DVP is more flexible than the
regular voucher program and that it permits PHAs to combine DVP funds with public
housing funds.
23 These families include Section 8 voucher holders (except families who were using their
vouchers to purchase a home), public housing residents, families in Section 202 and Section
811 properties, and those with project-based Section 8 rental assistance. A separate KDHAP
eligibility category existed for previously homeless individuals and residents in the Housing
Opportunities for Persons with AIDS (HOPWA) program.
24 HUD is using September 30, 2007 as the date by which assistance to DVP participants is
expected to end. If a family’s 18 months are up before that day, they are to receive DVP
assistance under regular voucher program rules until September 30, 2007.

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Families with KDHAP vouchers were to be transitioned over to DVP by March
1, 2006. The transition required PHAs to file lease addendums both with landlords
and tenants. Since DVP uses PHA payment standards — which can be set between
90% and 110% of fair market rent — to determine families’ subsidies rather than
100% of FMR used under KDHAP, some families may have to pay less in rent under
DVP and some may have to pay more, depending on whether their rent is higher or
lower than the payment standard.
Those families who evacuated and began receiving assistance under regular
portability procedures prior to the announcement of KDHAP could have chosen to
transfer to KDHAP or stay within the rules of the current voucher program.
Regardless of the family’s choice, the receiving PHA was required to bill KDHAP
for the cost of the assistance (up to 100% of FMR), rather than the originating PHA.
If the family chose to stay in the regular voucher program, and the cost of the
family’s actual assistance was higher than 100% of FMR, then the receiving PHA
was to bill the originating PHA for the difference in cost. Under DVP, families can
still choose between DVP and the regular voucher program rules; however, the PHA
bills HUD for the entire cost of the voucher.
If, at the end of 18 months, a voucher family wants to stay in their new
community, the regular Section 8 voucher rules apply. The PHA is to continue
billing HUD for the voucher until September 30, 2007, at which point the PHA is to
begin billing the original PHA in the disaster-affected areas. If a voucher family
wants to return to their previous home, then they resume voucher assistance in their
previous community. For HUD-assisted families without Section 8 vouchers (for
example, families who had lived in public housing before the storm), if their previous
housing is not rebuilt, then the family is to receive a voucher. If their previous
housing is rebuilt but they want to continue to receive voucher assistance, then they
must apply for a voucher in the community in which they want to live. HUD’s DVP
guidance states that storm-damaged PHAs whose clients are being served under DVP
should prepare financially for the families’ return in 18 months, as those agencies
will have to resume providing assistance to all families assisted before the storm who
choose to return.
Families Homeless Prior to Hurricane Katrina. Under both KDHAP and
DVP, families and individuals who were homeless prior to Hurricane Katrina are
treated somewhat differently than HUD-assisted families. After creating KDHAP,
HUD announced that those who were previously homeless would be served
separately, along with residents of the Housing Opportunities for Persons with AIDS
(HOPWA) program, in a program called KDHAP Special Needs (KDHAP-SN).
HUD issued additional guidance in a December 1, 2005 notice,25 and later made
operating requirements available on its website.26 Homeless families then became
eligible for DVP when the new program took effect on February 1, 2006.
25 HUD Notice PIH 2005-36, December 1, 2005, available at [http://hudclips.org].
26 HUD released KDHAP-SN Operating Requirements, dated December 22, 2005; they are
no longer available, however.

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Homeless families are eligible for the DVP if they were living in a Presidentially
declared disaster area in the week immediately prior to Hurricane Katrina or Rita, and
either sleeping in a place not meant for human habitation or residing in an emergency
shelter, transitional housing or housing provided through the Supportive Housing
Program (SHP), Shelter Plus Care (S+C) program, or HOPWA program.27 To
receive DVP housing assistance, homeless families must first verify their eligibility.
If families lived in SHP, S+C, or HOPWA housing, the housing provider must
confirm their residency. If families were living on the street or staying in emergency
shelters, a homeless service provider must provide written records or statements to
confirm that families were homeless in the weeks prior to Hurricanes Katrina and
Rita.
Once families are found to be eligible for DVP, they may attempt to find
housing within the jurisdiction of any participating PHA. HUD recommends that
PHAs contract with local homeless service providers to assist families in finding and
maintaining housing. In addition, an initiative called Katrina Aid Today, made up
of ten social service and voluntary organizations, is to provide case management
assistance to those displaced by Hurricane Katrina. If Katrina Aid Today’s services
are available where previously homeless families live, HUD requires that PHAs use
their services, rather than those of other providers.
Status. Several concerns were raised about KDHAP. Some PHAs were
reluctant to participate because they were required to shelter and transport families
until they found housing and the PHAs argued that the costs to do so were higher
than the fees they received. Low-income housing advocates criticized the program
because it did not include utility payments, which can pose a heavy cost burden on
very poor families. KDHAP was also criticized as too complex. While the benefit
calculation was simpler than the calculation under the Section 8 voucher program,
the interaction between the two forms of voucher was complicated. Many voiced
concern about what will happen at the end of 18 months, and how smoothly families
will be able to transition out of DVP and into other assistance or out of assistance
altogether.
The $390 million supplemental for DVP — administered by HUD, largely under
existing rules — should address the concerns raised within KDHAP about
participation, utility costs, and interaction with regular vouchers. However, DVP
does not address the issue of transition at the end of the program.
The HUD Assistant Secretary for Public and Indian Housing testified before the
House Financial Services Committee on December 14, 2005 that, as of that date,
12,500 households had been processed under KDHAP, although potentially 75,000
evacuees were eligible. He noted that it has been difficult to reach eligible families,
which is why such a small percentage have actually been served.28 The President’s
27 Disaster Voucher Program Supplemental Guidance: Rental Assistance for Special Needs
Families Displaced by Hurricanes Katrina and Rita, available at [http://www.hud.gov/
offices/pih/publications/dvpsnguidance.pdf].
28 Congressional Quarterly, Congressional Transcripts, Congressional Hearings, House
(continued...)

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February supplemental request revised down the estimated number of DVP eligible
families to 44,000. One year after the storm, HUD reported that more than 27,000
families have been assisted.29 According to information provided to CRS by HUD,
as of August 31, 2006, HUD had obligated $110 million of the supplemental funding
for DVP assistance and $97 million of that amount had been spent. As of that same
date, the Department had obligated $46 million for KDHAP under its mission
assignment with FEMA and $44 million of that amount had been spent.
Use of Existing Vouchers for Displaced Families
Outside of KDHAP and DVP, Congress did not fund, and HUD did not provide,
additional Section 8 vouchers for families displaced by Hurricane Katrina. Displaced
families could apply for existing HUD assistance, including Section 8 vouchers, if
they were otherwise eligible; however, in most communities, waiting lists for
vouchers are very long — in some cases up to 10 years. In response to the disaster,
some PHAs chose to give waiting list preference to families displaced by Hurricane
Katrina. In order to offer such a preference, PHAs must generally modify their
existing PHA Plan. Such changes require board approval and are generally subject
to public scrutiny.
The decision to prioritize displaced families can be controversial. Given the
limited supply of vouchers, prioritizing evacuees from other communities requires
preempting other poor families who have been on waiting lists for many years.
Prioritizing displaced families may also have budget implications. In recent years,
PHAs have received a fixed budget based on their inflated costs in 2004. Since costs
are driven by the difference between the rent and income of the families served,
increases or decreases in either can change the cost in ways beyond what is captured
in the aforementioned inflation factor. Given that many displaced families were very
poor before the storm and many were at least temporarily unemployed after the
storm, they may have qualified for larger subsidies than a PHA’s typical caseload.
Since PHAs’ budgets do not adapt to changes in their caseloads, it may be more
expensive to serve displaced families. If PHAs’ budgets are squeezed, they may
either have to reduce the amount of assistance they are able to provide to families or
reduce the total number of families served. Also, because vouchers are portable,
displaced families may leave the jurisdiction of the PHA that issued the voucher and
move back to devastated areas after they are rebuilt. If families leave with their
vouchers, unless the vouchers are absorbed in the new community, they will
effectively be lost to the communities that issued them.
No database of PHA preferences exists, so the number of PHAs that changed
their preferences to prioritize Katrina evacuees is unknown. Since revisions to plans
28 (...continued)
Financial Services Subcommittee on Housing and Community Opportunity Holds Hearing
on Housing Needs After Hurricanes Katrina and Rita, Dec. 14, 2005.
29 U.S. Department of Housing and Urban Development, HUD Katrina Accomplishments
— One year later, accessed August 31, 2006, available at [http://www.hud.gov/news/
katrina05response.cfm].

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require a public process, a search by CRS of newspaper articles in early November
found some reports of activity in local communities. Several PHAs chose to
prioritize evacuees; others considered making changes but ultimately decided not to;
and still others did not consider changes, given the need in their own communities.
Even if given top priority for existing vouchers, some families displaced by
Hurricane Katrina were ineligible to receive assistance because their incomes were
too high. Recognizing this concern, on September 26, 2005, members of the
Louisiana House delegation introduced the Hurricane Katrina Emergency Housing
Act of 2005 (H.R. 3894). The bill would have waived a number of the rules in the
Section 8 voucher and project-based programs, including those regarding income
eligibility and subsidy determination, for families displaced by Hurricane Katrina.
The bill did not include additional appropriations for the Section 8 program, nor did
it authorize any additional vouchers. H.R. 3894 passed the full House on October 6,
2005, but similar legislation was not introduced in the Senate, and it was not enacted
before the close of the 109th Congress.
Creation of New Vouchers
After Hurricane Katrina struck, housing policy advocates and analysts from
across the political spectrum called for the creation of additional Section 8 vouchers
to help house the hundreds of thousands of displaced families.30 There is past
precedent for the creation of temporary vouchers after an emergency, including after
the 1994 Northridge earthquake.31 Advocates for vouchers cite a number of
advantages vouchers have over the use of trailers and cash grants, which are the two
primary methods FEMA used to house displaced families following the storm.
Vouchers are portable and allow families to move to the locations of their choice.
If administered by local housing authorities, they connect families with organizations
that are knowledgeable about local markets and can help families locate housing.
Since vouchers utilize the existing housing stock, they may cost less than trailers,
which often need basic infrastructure to be developed before they can be installed.
Arguments against using vouchers include the complexity of the eligibility and
benefit calculation, although both can be modified by Congress when authorizing and
funding new vouchers. Also, sufficient rental units may not exist in the areas where
families wish to live, and unlike trailers, vouchers cannot expand the stock to address
that problem. Finally, once a voucher is authorized, it can be difficult to eliminate.
This was the case after the Northridge earthquake. Many families with temporary
vouchers were still using them when the assistance was set to expire, and, fearing the
social and political implications of evicting families, Congress extended the
30 See Ronald Utt, After Weeks of Confusion, the Right Course for Evacuee Housing
Assistance, Heritage Foundation, WebMemo #866, Sept. 28, 2005; and Bruce Katz and
Mark Muro, To Shelter Katrina’s Victims, Learn from the Northridge Quake Zone, The
Brookings Institution, Sept. 12, 2005.
31 For more information on past responses to disasters, see CRS Report RL33078, The Role
of HUD Housing Programs in Response to Past Disasters, by Maggie McCarty, Libby Perl,
and Bruce Foote.

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CRS-11
assistance several times before it was eventually made permanent. Given recent
concerns voiced by Congress about the cost of the Section 8 program and
Administration initiatives to replace it with a new program, there may be political
reluctance to expand it.
Legislation. Several pieces of legislation were introduced to create new,
temporary vouchers for families displaced by Hurricane Katrina, although none was
enacted before the close of the 109th Congress. On September 8, 2005, Senator Reid
introduced the Katrina Emergency Relief Act of 2005 (S. 1637). Title III of the bill
includes the “Helping to House Victims of Hurricane Katrina Act of 2005.” The bill
would have provided $3.5 billion in emergency supplemental appropriations to HUD
to fund temporary vouchers for families displaced by Hurricane Katrina. The
vouchers would be authorized for six months, but would be extended for an
additional six months unless the HUD Secretary determined that they were no longer
needed. Funding would also be available to provide related assistance to families,
such as security deposits and relocation assistance. Many of the rules regarding
eligibility and tenant payments would be waived, and the upper limit on the amount
of available assistance would be raised from the current standard of 110% of the local
FMR to 150% of the local FMR. Also on September 8, Senator Sarbanes offered the
same “Helping to House Victims of Hurricane Katrina Act of 2005" as a floor
amendment to the Commerce-Justice-Science FY2006 appropriations bill (H.R.
2862). The amendment was adopted, but dropped in the final bill.
On September 22, 2005, the Senators from Louisiana introduced identical
bipartisan relief and recovery bills. The Hurricane Katrina Disaster Relief and
Economic Recovery Act (S. 1765 and S. 1766) called for new programs and
additional funding in areas ranging from defense, to energy, to health care, to the
environment. The housing section would have provided $3.5 billion for emergency
Section 8 vouchers in much the same form as those proposed in the Reid bill. The
bills were referred to the Senate Finance Committee, but no further action was taken.
FEMA Assistance
After the storm, the President did not request Section 8 vouchers for displaced
families outside of the limited KDHAP/DVP assistance. Instead, FEMA provided
cash grants to families to use for housing costs. Referred to as transitional housing
assistance, these payments are governed by the Individual and Household Assistance
authority provided in the Stafford Act.32 The first of these payments, at the amount
of $2,358, was made in September 2005. The grant amount was meant to represent
three months of housing costs, and was calculated using the national average fair
market rent for a two-bedroom apartment. Families who received the assistance were
required to show receipts to prove that it was used for eligible housing expenses;
however, those rules were loosened for the first grant because FEMA acknowledged
that families were given payments without sufficient direction as to how it was to be
used. The grants count against FEMA’s $26,200 limit on assistance provided to an
32 The Robert T. Stafford Disaster Relief and Emergency Assistance Act is codified at 42
U.S.C. §§ 5121-5206.

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individual household. FEMA indicated that the housing assistance could be extended
for up to 18 months, and that future amounts might be adjusted to reflect regional
rent variations. Families’ eligibility for this assistance was determined when they
registered with FEMA, and was based on the amount of damage to their homes. As
of August 14, 2006, 718,976 applicants had received rental assistance and as of
August 23, 2006, 632,808 of those applicants, at their last recertification, were still
eligible for ongoing rental assistance.33
In addition to transitional housing assistance payments, FEMA can provide
several other forms of housing assistance. FEMA can provide trailer homes to
families for up to 18 months after a disaster. As of August 29, 2006, FEMA had
provided more than 116,000 trailers and mobile homes to hurricane victims, of which
more than 115,000 were occupied.34
FEMA can also pay the cost of hotel rooms for hurricane evacuees. At its peak,
FEMA was paying for 85,000 rooms,35 for Katrina and Rita evacuees; by the end of
February 2006, the agency was making payments for 10,000 rooms.36 FEMA
announced that hotel payments were only a temporary solution, and initially stated
that it would cease such payments by December 1, 2005, with the exception of short-
term extensions for the 12,000 hotel rooms occupied by evacuees in Louisiana and
Mississippi.37 That deadline was later extended to December 15, 2005, with 10 states
eligible for extensions to January 7, 2006.38 Following a judge’s ruling against the
agency, FEMA first agreed to continue making payments for families until at least
February 7, 2006,39 a date that was later extended to March 15, 2006.40 FEMA
reported that it had “an aggressive plan to help place these families in longer-term
housing,” which included a contract to provide case management assistance,
continuation of transitional housing payments, and referrals to social service
33 Based on e-mail communication with Heather Smith, Congressional Affairs Specialist,
Office of Legislative Affairs, FEMA, August 25, 2006.
34 This figure includes trailers provided for victims of Hurricanes Katrina and Rita, and is
taken from Federal Emergency Management Agency, Report of August 29, 2006, available
at [http://appropriations.house.gov/_files/HurricaneKatrinaLink.htm].
35 FEMA Fact Sheet: A 6-Month Update on Hurricane Relief, Recovery and Rebuilding,
dated February 28, 2006, available online from [http://www.fema.gov/pdf/media/
HQ-06-034FactSheet.pdf].
36 Federal Emergency Management Agency, Report of March 2, 2006, available at
[http://appropriations.house.gov/_files/HurricaneKatrinaLink.htm].
37 FEMA Press Release, FEMA Helping Families into Long-Term Housing: Effort to reach
everyone evacuated continues in long-term housing plan, Release Date: Nov. 15, 2005,
Release Number: HQ-05-373.
38 FEMA Press Release, “FEMA Extends Deadline for Evacuees: Two-Week Extension of
Hotel Program for All States, 10 States Receive Extension Through Jan. 7,” Release Date:
Nov. 22, 2005, Release Number: HQ-05-378.
39 FEMA News Release, “FEMA Hotel/Motel Extension for Evacuees,” December 14, 2005.
40 FEMA News Release, “FEMA Offers Limited Hotel/Motel Extensions in Louisiana and
Mississippi,”February 23, 2006.

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agencies.41 By the end of August 2006, the agency was still authorizing payments for
29 rooms.42
Some cities established their own voucher programs, for which FEMA had been
providing reimbursements. Newspapers reported that Houston has issued 35,000
vouchers to families to cover one year of rent.43 FEMA reported that approximately
60,000 apartments were leased by state or local governments, or authorized partners,
on behalf of evacuees in 32 of the states that received disaster declarations.44 FEMA
initially stated that it was phasing out the program and that it would cease
reimbursing cities by March 1, 2006.45 In late February, FEMA issued a notice to
cities informing them that they were to transition all of their existing leases from one
FEMA program (FEMA’s Section 403 Interim Sheltering program) to another
(FEMA’s Section 408 Housing program) with the aid of a FEMA contractor.46 In
this transition, the cities are removed from the lease and the evacuees are added.47
Conclusion
Hurricane Katrina was an unprecedented housing disaster. It affected the lives
of hundreds of thousands of people, many of them poor before the storm and many
who may become poor because of the storm. The nation’s largest housing program
for the poor, the Section 8 voucher program, played a minor role in aiding displaced
families, despite calls for its use from across the political spectrum. Instead, the
Administration has relied on FEMA emergency provisions and, to a limited degree,
the marshaling of existing HUD resources. In some parts of the country, local
housing authorities prioritized hurricane evacuees for the limited supply of available
vouchers. In September, the KDHAP/DVP program was created to serve the
relatively small number of hurricane evacuees who previously received HUD
assistance. To serve other displaced families, FEMA developed a number of interim
policies, ranging from the provision of trailers to the awarding of cash grants. Some
cities and states developed their own voucher programs, with the expectation of
FEMA reimbursement.
41 FEMA News Release, “FEMA Helping Families into Long-Term Housing: Effort to
Reach Everyone Evacuated Continues in Long-term Housing Plan,” Release Date: Nov. 15,
2005, Release Number: HQ-05-373.
42 Federal Emergency Management Agency, Report of August 29, 2006, available at
[http://appropriations.house.gov/_files/HurricaneKatrinaLink.htm].
43 Eric Berger, “Sweetest deal for evacuees found here: In addition to a FEMA stipend, city
is giving them a year of free rent,” Houston Chronicle, Nov. 6, 2005.
44 FEMA News Release, “Conversion Of Emergency Sheltering Apartments To FEMA’s
Individual Rental Assistance Program,” February 27, 2006.
45 FEMA News Release, “FEMA Helping Families into Long-Term Housing: Effort to
reach everyone evacuated continues in long-term housing plan,”November 15, 2005.
46 [http://www.nmhc.org/Content/ServeFile.cfm?FileID=5283]
47 FEMA News Release, “Conversion Of Emergency Sheltering Apartments To FEMA’s
Individual Rental Assistance Program,” February 27, 2006.

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The Administration’s approach to housing families displaced by the 2005 Gulf
Coast hurricanes has come under intense criticism. Generally, the response was
criticized as disorganized and inefficient. The final report of a congressional review
of the government’s response to the disaster, A Failure of Initiative, found that “the
government plans for ... shelter were far from adequate.”48 Low-income housing
advocates voiced concerns that some families could not find ways to use their
transitional housing funds, both because rental markets have become very tight in the
areas immediately surrounding the most heavily damaged areas, and because families
were unfamiliar with the rental markets in the areas to which they had relocated.
Advocates also contended that FEMA did not make it clear to families that the
transitional housing payments were to be used only for housing. Stories surfaced of
families who used the funds for purposes other than rent, and are now facing eviction
and possible sanctions from FEMA. Some argued that the mix of trailers, cash
payments, and mission assignments is not cost effective when compared to
vouchers.49
In light of these criticisms and others, the Administration undertook a review
of its Katrina response. The final report, The Federal Response to Hurricane
Katrina: Lessons Learned,50 recommends that HUD be designated as the lead federal
agency for the provision of temporary housing in future disasters. It noted that HUD
has extensive experience in providing housing resources for those in need, and that
it must use its extensive network of regional offices and state and local housing
agencies to prepare for potential relocation emergencies. It further notes that the
provision of trailers should not be the default means of temporary housing offered to
evacuees leaving shelters. The congressional panel’s review, in A Failure of
Initiative, found that “FEMA failed to take full advantage of HUD’s expertise and
perspective on large-scale housing challenges, such as the agency’s experience with
the voucher program.” Whether these findings and recommendations will mean that
vouchers will play a larger role in future disasters is yet to be determined.
crsphpgw
48 A Failure of Initiative: Final Report of the Select Bipartisan Committee to Investigate the
Preparation for and Response to Hurricane Katrina, February 12, 2005. Available at
[http://www.gpoaccess.gov/congress/index.html].
49 Bruce Katz, Amy Liu, Matt Fellowes and Mia Mabanta, Housing Families Displaced by
Katrina: A Review of the Federal Response to Date, The Brookings Institution, Nov. 11,
2005.
50 The White House, The Federal Response to Hurricane Katrina: Lessons Learned,
February 2006, at [http://www.whitehouse.gov/reports/katrina-lessons-learned.pdf].

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