Order Code RL34087
FEMA Disaster Housing and Hurricane Katrina:
Overview, Analysis, and Congressional Issues
Updated June 26, 2008
Francis X. McCarthy
Analyst, Emergency Management Policy
Government and Finance Division

---

FEMA Disaster Housing and Hurricane Katrina:
Overview, Analysis, and Congressional Issues
Summary
Some have criticized the Federal Emergency Management Agency’s (FEMA’s)
emergency housing policies, particularly its approach to health and safety standards
(as exemplified by the evidence of formaldehyde in both trailers and mobile homes),
as well as its overall strategy to perform its housing mission. To address disaster
housing issues, Congress could opt to consider questions such as the following.
How have disaster housing needs traditionally been addressed under the Stafford
Disaster Relief and Emergency Assistance Act (P.L. 93-288, as amended)? How did
FEMA’s approach during Hurricane Katrina differ from previous disasters and why?
With a substantial amount of available funding provided by Congress, but without
requesting expanded authority, FEMA found its sole option was to use traditional
disaster housing practices. Those practices, successful for disasters of a historically
familiar size, were hard-pressed to meet the unprecedented demands of the Katrina
catastrophic disaster.
There are potential events (New Madrid earthquake or other large natural or
terrorist events) that could conceivably produce many of the same challenges
presented by the Gulf Coast hurricane season of 2005. Federal disaster housing
policy may remain an issue in the 110th Congress, because, as Hurricane Katrina
illustrated, the continued existence of communities after a catastrophic event involves
extensive federal assistance issues.
In the past, FEMA’s approaches have turned on practical and theoretical
considerations. Practical considerations include the agency’s ability to house
families and individuals within a short time frame and in proximity to the original
disaster, and in the case of Hurricane Katrina, to make contact with the hundreds of
thousands of applicants who registered for assistance. Some of the theoretical policy
considerations include questions of equity, self-reliance, federalism, and the duration
of federal assistance. Those considerations have led to process questions concerning
program stewardship and the potential for waste, fraud, and abuse of federal
resources.
The Post-Katrina Act Emergency Management Reform Act, enacted in October
of 2006 (P.L. 109-295), changed FEMA housing policy to provide the President
with greater flexibility for meeting the challenges of disasters on a large scale. Future
debate on the housing issue may also be affected by the report on the National
Disaster Housing Strategy (as directed in P.L. 109-295) that was due to Congress in
2007, but is not yet completed. Legislation in the 110th Congress, such as S. 2386,
which restores the Mortgage/Rental Assistance program, demonstrates ongoing
Congressional interest in programs that augment existing housing assistance. Also,
legislation (S. 2382) that would mandate that the FEMA Administrator assess the
need for manufactured housing units and develop a strategy to optimize their use and
disposal of those not needed.
This report will be updated as warranted by events.

---

Contents
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Stafford Act Section 403 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Traditional Stafford Act Sheltering/Housing . . . . . . . . . . . . . . . . . . . . . . . . . 2
The Katrina Experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Traditional Mass Shelters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
The Katrina Experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Cruise Ships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
The Katrina Experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Traditional Hotels and Motels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
The Katrina Experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Traditional Apartment Rentals by States . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
The Katrina Experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
The Transition to Section 408 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Stafford Act Section 408 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Traditional Section 408 Rental, Repair, and Replacement Assistance . . . . 10
The Katrina Experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Traditional Housing Repair and Replacement . . . . . . . . . . . . . . . . . . . . . . . 12
Traditional Manufactured Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
The Katrina Experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Health and Safety Concerns in Manufactured Housing . . . . . . . . . . . . . . . . 13
Housing Inspections: Strengths and Limitations . . . . . . . . . . . . . . . . . . . . . 17
The Katrina Experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Issues for Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
National Disaster Housing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
FEMA Group Site Location . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
FEMA Group Site Management of Services . . . . . . . . . . . . . . . . . . . . . . . . 19
Delivering Housing: When and Where . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Equity in Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Choice for Disaster Assistance Applicants . . . . . . . . . . . . . . . . . . . . . . . . . 23
Incentives for Communities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Unintended Consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Closer to Home: FEMA’s Original Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Victims Without Homes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
HUD-FEMA and Long Term Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
The Road Home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Mortgage and Rental Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Katrina Cottages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Possible Congressional Approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Catastrophic Tier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Catastrophic Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Incentives for Communities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
FEMA Group Site Management Services . . . . . . . . . . . . . . . . . . . . . . . . . . 36

---

MRA Restoration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Regulatory Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Cost-Share Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Administrative Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Concluding Observations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Appendix A. HUD and Other Federal Housing Resources . . . . . . . . . . . . . . . . . 40
KDHAP and HUD Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Appendix B. Victims Without Homes: The Loma Prieta Earthquake and
Hurricane Andrew . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Loma Prieta Earthquake . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Hurricane Andrew . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

---

FEMA Disaster Housing and Hurricane
Katrina: Overview, Analysis, and
Congressional Issues
Background
Federal involvement in disaster housing can be traced back at least as far as the
Great Mississippi River Flood of 1927. At that time, federal assistance was indirect,
supporting the American National Red Cross (ANRC), championing ANRC fund-
raising and donations to support the Red Cross housing/sheltering mission, and
generally coordinating assistance.1
In 1951 President Truman built on the ANRC partnership in Executive Order
10221, which delegated the overall responsibility for federal supplemental disaster
assistance to the Housing and Home Finance Administration (HHFA).2 Just over two
decades later, President Nixon assigned the emergency housing responsibility to
HHFA’s successor organization, the Department of Housing and Urban Development
(HUD). Administration officials created HUD’s Federal Disaster Assistance
Administration (FDAA) to carry out temporary housing and other disaster response
and recovery programs. The FDAA was one of the legacy components subsequently
absorbed into FEMA in 1979 under Reorganization Plan Number 3.3 The federal
government’s temporary disaster housing mission (an integral part of its overall
authorities for disaster response and recovery) has remained at FEMA for more than
a quarter of a century. On March 1, 2003 FEMA became a part of the Department of
Homeland Security in accordance with the Homeland Security Act.4
The Robert T. Stafford Disaster Relief and Emergency Assistance Act (P.L. 93-
288, as amended) authorizes the President to provide temporary housing and other
disaster response and recovery activities. Through executive orders this authority has
1 For more information, see CRS Report RL33126, Disaster Response and Appointment of
a Recovery Czar: The Executive Branch’s Response to the Flood of 1927, by Kevin R.
Kosar. Almost 80 years later, the same process (working through the ANRC and a network
and system established by that organization) would be the initial entry point for the Federal
Emergency Management Agency (FEMA) in the housing response to the needs of Hurricane
Katrina victims.
2 Executive Order 10221, Federal Register, vol. 16, March 6, 1951, p. 2051.
3 Executive Order 12127, Federal Register, vol. 44, April 3, 1979, p. 19367. For more
information , see CRS Report RL33369, Federal Emergency Management and Homeland
Security Organization: Historical Developments and Legislative Options, by Henry B.
Hogue and Keith Bea.
4 P.L. 107-296, 116 Stat. 2214.

---

CRS-2
been delegated to FEMA, and other federal departments or agencies as assigned by
FEMA.5 This act authorized discrete programs, including the Individual and
Households Program (IHP), along with a variety of programs intended to address the
unmet needs resulting from a major disaster of families, individuals, and state and
local governments.
Assessing the performance of government at every level to respond to disaster
victims who need housing assistance involves consideration of the continuum of
options available to FEMA in its sheltering and housing mission. FEMA
traditionally uses two separate Stafford Act authorities to carry out this mission —
Section 403 authorities for emergency sheltering and Section 408 for temporary
housing.6 Distinct units within FEMA implement these housing authorities. The 403
provisions are administered by the Public Assistance (Infrastructure) Branch in the
Disaster Assistance Directorate (formerly Recovery Division), while the 408
provisions are under the purview of the Individual Assistance Branch within that
same directorate.7
Stafford Act Section 403
Section 403 provides for general federal assistance to meet immediate threats
to life and property. This aid may include medicine, food and other consumables,
and work and services performed on public or private land. It is the work and
services category that is further defined to include debris removal, search and rescue
services, emergency medical services, emergency mass care, and emergency shelter.
The assistance provided by states and/or FEMA immediately following a disaster is
usually referred to as “emergency shelter.”8 Emergency sheltering can take a variety
of forms, some of which were adapted to meet the special needs following Hurricane
Katrina.
Traditional Stafford Act Sheltering/Housing
This type of 403 assistance can take the form of mass shelters (such as those
run by the Red Cross and designated by local governments), cruise ships (used for
the first time after Hurricane Katrina), emergency group sites (using manufactured
housing), rental assistance, and other supporting services paid for by state
governments and reimbursed by FEMA. While elements of 403 are occasionally
employed for disaster response, the sheltering provision is rarely used on a vast scale.
The emergency aid in Section 403 is generally cost-shared, like other elements of the
5 For more information, see CRS Report RL33053, Federal Stafford Act Disaster
Assistance: Presidential Declarations, Eligible Activities, and Funding, by Keith Bea.
6 42 U.S.C. §5170b and 42 U.S.C. §5174.
7 In a letter dated January 18, 2007, from DHS Secretary Michael Chertoff to Senate
Homeland Security and Governmental Affairs Committee Chair Joseph Lieberman, DHS
announced it was changing the name of the Recovery Division to the Disaster Assistance
Division.
8 42 U.S.C. § 5170b.

---

CRS-3
Stafford Act, on a 75% federal share, 25% state share. Since 403 is emergency
sheltering, this program is used to house victims immediately and does not include
a test for eligibility before shelter is provided, unlike Section 408.9 Help under
Section 403 generally is short term in nature and is provided in facilities close to the
disaster area.
The Katrina Experience. Due to the unusually severe, widespread
destruction, and dispersal of victims caused by Hurricane Katrina, Section 403
shelters were funded throughout the nation. Accordingly, FEMA issued disaster-
specific guidance and other supporting documents delineating section 403 eligibility
for the multitude of states involved in this unique catastrophic event. Though 403
sheltering aid is intended to be limited term help, after Katrina those limits were
stretched due to the magnitude of the event. That stretching also included a 100%
federal share for the emergency sheltering costs for all states hosting FEMA evacuees
for up to 12 months, though shorter leases were encouraged.10
Traditional Mass Shelters
In 2006 FEMA and the ANRC entered into a Memorandum of Understanding
(MOU) that specifically references their coordination of emergency mass care.11
They formerly also had been the two parties charged with the responsibility for
carrying out Emergency Support Function (ESF) #6 - Mass Care, in the National
Response Plan (NRP). The NRP was the federal government’s overall framework to
allocate resources and coordinate the federal response following a major disaster
event. Under the new National Response Framework, ESF #6 has expanded to
include housing and human services. Due to that expansion, DHS/FEMA is now the
lead for the function.12 But regardless of that framework, the great majority of the
hundreds of shelters used following Katrina (and most disasters) were managed by
the ANRC. In addition, many other independent shelters were and continue to be run
by state and local governments and non-governmental organizations.
The Katrina Experience. The shared responsibility in the NRP for mass care
was a change from the past operational practices under the Federal Response Plan
(FRP), which identified the Red Cross as the sole lead for the function. Shared
9 U.S. Department of Homeland Security, Federal Emergency Management Agency,
Frequently Asked Questions: Section 403 Sheltering, August 11, 2006, at
[http://www.fema.gov/government/grant/pa/faq_403 sheltering1.shtm].
10 U.S. Department of Homeland Security, Federal Emergency Management Agency,
Hurricane Katrina Fact Sheet, Frequently Asked Questions Section 403 Sheltering,
September 29, 2005, p. 6.
11 Memorandum of Understanding Between the U.S. Department of Homeland Security,
Federal Emergency Management Agency, and The American National Red Cross, May 30,
2006.
12 The NRF includes a roster of federal partners with the Red Cross remaining as a
supporting partner along with other non-profit organizations. The Red Cross remains a key
component of the team responsible for emergency feeding and sheltering for the general
population. See [http://www.fema.gov/pdf/emergency/nrf/nrf-esf-06.pdf].

---

CRS-4
responsibilities had begun prior to Katrina, but this disaster was the most strenuous
test of this new arrangement. In the context of the Hurricane Katrina experience, the
quantity and quality of the available emergency shelter space has been questioned by
various reports, including the House Select Bipartisan Committee to Investigate the
Preparation for and Response to Hurricane Katrina Report, which noted that “State
and local governments made inappropriate selections of shelters of last resort. The
lack of a regional database of shelters contributed to an inefficient and ineffective
evacuation and sheltering process.”13 The committee also acknowledged the
difficulty of the task. The report noted that some experts believed that the shelter
system eventually built up over the opening weeks of the Katrina disaster, with the
inherent coordination that was necessary, was similar to “opening a Fortune 500
company in a couple days’ time.”14
FEMA provided to the states and their shelter partners disaster-specific-
guidance that listed, in great detail, the costs that would be eligible for
reimbursement.15 Despite the guidelines, the ANRC and others involved in
sheltering still coped with significant questions raised by the scope of the event.
Emergency shelters are dependent not only on adequate space but also on many other
logistical concerns including health and safety, the ability to serve special needs
populations, and the availability of trained volunteers to staff these facilities. In the
case of Hurricane Katrina, the size and scope of this disaster was truly unprecedented
in comparison to other large events; as such, the disaster strained the traditional
shelter system.16
As noted above, emergency shelters funded under Section 403 authority are
intended to be temporary housing solutions. The decision by the Administration to
accelerate the closing of the emergency shelters and move disaster victims to more
suitable housing situations by October 15, 2005, about six weeks after the hurricane,
meant that many families and individuals had to quickly find housing alternatives.17
At its peak, the post-Katrina mass shelter network provided shelter for over 273,000
evacuees.18 Although charting such an ambitious goal did speed up the emptying of
13 U.S. Congress, House Select Bipartisan Committee to Investigate the Preparation for and
Response to Hurricane Katrina, A Failure Of Initiative, 109th Cong., 2nd sess. (Washington:
2005), p. 312.
14 Ibid., p. 346.
15 See U.S. Department of Homeland Security, Federal Emergency Management Agency
Memorandum, Disaster Specific Guidance #2, Nancy Ward, FEMA Area Recovery
Manager, September 9, 2005.
16 For additional information, see CRS Report RL33761, Rebuilding Housing After
Hurricane Katrina: Lessons Learned and Unresolved Issues, by N. Eric Weiss.
17 “Most Katrina shelters cleared but housing problems remain,” USA Today, October 15,
2005, at [http://www.usatoday.com/news/nation/2005-10-15-katrinashelters_x.htm]. While
the October 15 deadline was not met in all cases due to a lack of availability of hotel/motel
rooms or ongoing efforts at family reunification and other considerations, it was generally
observed.
18 Eric Lipton, “Number Overstated for Storm Evacuees in Hotels,” New York Times,
(continued...)

---

CRS-5
the shelters, it also meant that alternative forms of housing were needed prior to the
registration of evacuees with FEMA, and before any individuals and/or families
could be presented with other options for their long term housing goals.
Cruise Ships
The use of cruise ships as emergency shelters had reportedly been considered
by FEMA officials as early as 1989 (following a disaster in the U.S. Virgin Islands).
However, this form of shelter had never actually been employed.19 For island
disasters, and in coastal areas in particular, cruise ships were considered to be a
strategically valuable form of shelter that could be brought rapidly to remote
locations. Despite arguments for their use, however, no such contracts had
previously been let prior to Katrina.
The Katrina Experience. Given the challenges posed by Katrina, FEMA
chose to use the cruise ship alternative and asked the Navy to charter these ships.20
The ships’ most useful capabilities were to house both victims and relief workers in
private rooms in close proximity to the disaster area, and to have on-site feeding
facilities. The ships offered the possibility that some of the victims of the disaster
could be a part of the rebuilding process by giving them access to the area where the
work was being conducted. For a catastrophic disaster, this is a serious concern,
particularly when a large work force is arriving in an area that has had a mass
evacuation coupled with the destruction of rental units. Although housing shared by
victims and workers arguably has benefits, some disadvantages were identified. For
example, at a House Financial Services hearing on Katrina housing, one Member of
Congress noted that the large FEMA contingent of workers in the area actually used
a significant part of the remaining resources (both hotels and other housing) and
suggested that FEMA staff were, in fact, in competition with local disaster victims
wishing to return to the area.21
During their use the ships housed over 8,000 people and served over two million
meals to Katrina victims and workers helping in the recovery.22 While meeting
emergency needs, critics questioned the cost of housing victims on the ships. Some
doubted the efficacy of the plan, the location of some ships, the cost and length of the
contract, and the process used to arrive at the agreement. As one story noted: “The
18 (...continued)
October 19, 2005, p. A1.
19 Phone interview with Lawrence Zensinger, former FEMA Recovery Division Director,
January 22, 2007.
20 U.S. Department of Homeland Security Inspector General — Chartered Cruise
S h i p s , A u d i t R e p o r t
N 2 0 0 6 - 0 0 1 5 , F e b r u a r y , 2 0 0 6 ,
[http://www.dhs.gov/xoig/assets/kavorsght/OIG_NAV_N06-0015.pdf.].
21 Testimony of Representative Charles Melancon, in U.S. Congress, House Committee on
Financial Services, Federal Housing Response to Hurricane Katrina, hearing, 110th Cong.
1st sess., February 6, 2007.
22 U.S. Department of Homeland Security, Federal Emergency Management Agency —
Cruise Ships Leaving New Orleans March 1-February 24, 2006.

---

CRS-6
six month contract — staunchly defended by Carnival but castigated by politicians
from both parties — has come to exemplify the cost of haste that followed Katrina’s
strike and FEMA’s lack of preparation.”23
While the cruise ships attracted considerable media attention, one step taken in
this process may warrant further consideration. The care of children in this situation
is of interest, particularly since it served as a harbinger of what would become a very
significant issue with regard to FEMA’s management of its large mobile home and
trailer parks. On one of the Carnival ships, the Holiday, the organization Save The
Children (best known for its work overseas) joined with Carnival and other corporate
givers to set up a child-care center. As summarized by the organization: “Save the
Children worked with a local licensed child-care provider to turn the Holiday ship’s
‘Doc Holiday Lounge’ into a child-care center that served about 70 children each day.
Child care services were difficult to find as families sought to recover.”24 The same
perceived needs would surface as areas of contention at FEMA’s emergency trailer
parks that were established on the Gulf Coast when FEMA child care services or
other amenities were eligible expenses for the management of the trailer parks.25
Similar concerns have long been a part of temporary housing operations, but the scale
of the post-Katrina disaster environment brought greater scrutiny to the issues of
supportive services for large temporary housing sites.
Traditional Hotels and Motels
The local chapters of the ANRC routinely provide brief hotel or motel stays as
a form of emergency housing around the nation on a daily basis for disaster victims,
including the victims of fires or other local emergencies. The local ANRC chapters
are frequently reimbursed by FEMA for this work in presidentially declared disasters
of a much smaller scale than Katrina. This form of assistance is referred to in
regulations as “reasonable, short-term housing expenses.”26 However, because the
practice of providing transient accommodations involves working with much smaller
numbers of victims, the length of stay is usually brief, and the task of finding more
suitable accommodations not as daunting as the Katrina experience.
The Katrina Experience. Hotels and motels were used around the country
both by self-evacuated families and individuals and by disaster evacuees who were
moved out of shelters and into these establishments by the ANRC and FEMA.
Hotels and motels in the disaster area were also used to house relief workers.
23 Jonathan Weisman, “$236 Million Cruise Ship Deal Criticized,” Washington Post, Sept,
28, 2005, p. 1.
24 Carnival Corporation, Sanofi-Aventis, Scholastic Book Clubs Helped Lead the
W a y i n H u r r i c a n e K a t r i n a R e c o v e r y E f f o r t s , a t
[ h t t p : / / w w w . s a v e t h e c h i l d r e n . o r g / c o r p o r a t e / p a r t n e r s / c a r n i v a l -
corporation.html?print=t].
25 Paul Singer, “Camp FEMA”, National Journal, vol.38, March 11, 2006, pp. 21-26.
26 44 C.F.R., § 206.117 (b).

---

CRS-7
Much of the work of placing victims in these facilities was managed by a
contractor, Corporate Lodging Consultants (CLC), that worked originally for the Red
Cross and then FEMA. CLC engaged the hotels and motels to track occupancy and
managed the payments to the participating facilities.27
Many residents in harm’s way had “self-evacuated” to hotels and motels outside
of the immediate area as the storm approached. However, the majority in these
establishments were families and individuals who moved from mass shelters to the
hotels and motels to meet the October 15, 2005 deadline. This resulted in an
extraordinarily high combined population in these commercial facilities. The peak
was reached in late October of 2005 when 85,000 households were housed across the
country in hotels and motels in 48 states.28
Due to the unique circumstances created by Hurricane Katrina, a traditionally
short-term solution for small emergencies became a national program of
unprecedented size. This greatly expanded program provided some privacy for
families that had been spent a significant period of time in mass shelters. The
hotel/motel option gave displaced victims a chance to be in a room with their own
private space and a discrete address. However, the deadline for the movement out of
shelters left little or no time for establishing protocols for lodging costs or exploring
alternative housing.

Traditional Apartment Rentals by States
No evidence or data exist of a previous use of state contracting for apartments
for disaster victims under Section 403. The states traditionally are engaged in
Section 403 work through the debris removal program, congregate sheltering, and
some other distinct missions such as search and rescue work or the provision of
temporary school facilities.29 The FEMA housing mission is, in part, carried out in
cooperation with the states. But that cooperation generally entails state assistance
only in locating temporary housing sites and in the administration of the Other Needs
Assistance (ONA) program. ONA funds are used for furniture and clothing and other
related needs, a use that works in tandem with the Section 408 housing program
(discussed below).
The Katrina Experience. Following the evacuation of Katrina victims (both
self-evacuated and those transported by FEMA) to many states, some of those states:
rented apartments for the evacuees; provided other necessary support such as
furnishings, food, transportation, and limited medical assistance; and made the rent
payments that were subsequently reimbursed by FEMA under Section 403. There
were, at the peak of this operation, approximately 67,000 apartment leases in 32
27 Dana Hedgpeth and Ben White, “Hurricane Evacuees Boost Hotels’ Profits,”
Washington Post, October 7, 2005, p. D1.
2 8 F E M A E x t e n d s H o t e l P r o g r a m f o r L A , M I S S . E v a c u e e s ,
[http://www.foxnews.com/story/0,2933,185839,00.html].
29 42 U.S.C. §5170b.

---

CRS-8
states. While the original instructions by FEMA offered to reimburse leases of up to
12 months, states were encouraged to engage in shorter leases if possible.30
States were solicited by FEMA to accept evacuees. They were asked to provide
information to FEMA on the number of evacuees they could accommodate, the date
they could begin receiving them, and the location of the receiving point. The
potential hosting states were promised full reimbursement of their disaster related
costs, with the general instruction to treat the Hurricane Katrina evacuees as they
would disaster victims within their own state borders.31
The Transition to Section 408
Due to the damage to permanent housing stock (both private homes and rental
properties) by Hurricane Katrina, the transition from shorter-term Section 403
sheltering/housing to traditional, longer-term Section 408 temporary housing
assistance was a difficult one. Normally, FEMA works with a relatively small
population, which traditionally makes this “crosswalk” easier; however, that was not
the case for this event. FEMA had to contact all recipients of 403 assistance in order
to establish their eligibility for longer- term aid under Section 408. That contact also
had to include an explanation of the process as well as available housing options, the
location of some housing resources, and the time-tables involved. Disaster victims
also had to be assured that the next form of housing assistance was available for
those deemed eligible. Accordingly, checks for rental assistance, or a unit of
manufactured housing, had to be available before the applicants were moved from
their current residences.
Eligibility for Section 408 assistance is based on several conditions, including
a finding by FEMA that:
! the applicant’s primary residence is unlivable;
! the applicant is experiencing financial hardship and;
! there are other related difficulties in the aftermath of a declared
disaster event.32
Eligibility determinations are routinely made in most disaster situations by staff
at FEMA’s National Process Service Centers (NPSCs). At the NPSCs, staff take
registrations (both telephonically and on-line) working in concert with FEMA’s on-
site staff based at the Joint Field Offices (JFOs) in or near the affected area, and with
FEMA’s contracted housing inspectors.
30 U.S. Department of Homeland Security, Federal Emergency Management Agency,
Hurricane Katrina Fact Sheet, Frequently Asked Questions: Section 403 Sheltering,
September 29, 2005, p. 6.
31 Interview with former FEMA Recovery Division Director Daniel Craig, Washington, DC,
January 22, 2007.
32 44 CFR §206.101 (f).

---

CRS-9
A major challenge to this traditional approach rested in the sheer number of
victims involved in the Katrina disaster; thousands of evacuees were placed in
hotel/motel rooms in 48 states as well as in state-rented apartments in 32 states. The
wide dispersal of victims compounded the transition process. This outreach mission
was especially difficult to accomplish within shifting deadlines established by the
Department of Homeland Security (DHS)/FEMA. Due to the extent of the
devastation in the affected area, housing inspections could not always be conducted
within the usual time frames; such inspections are generally critical to eligibility
decisions. In addition, FEMA had to cobble together a series of outreach teams to
spread out among the diaspora of disaster victims. These teams consisted of
personnel from the Corporate Lodging Consultant (CLC) contractors, FEMA
Community Relations staff, and available staff from the respective FEMA regional
offices. The resources of these groups were already greatly taxed by their own
disaster assignments.
DHS/FEMA had been contacted as early as September 6, 2005, by the Refugee
Council USA with a proposed plan to reach out (through the Refugee Council’s local
affiliate network) and provide case management services to the displaced residents
from the Gulf Coast.33 The Council had developed the plan in conjunction with the
White House Homeland Security Council and the Office of Faith-Based Initiatives
and its traditional partners in refugee assistance at the Department of State and the
Department of Health and Human Services. Subsequent discussions raised questions
about the authority of FEMA to carry out such a program as well as the potential
cost. The plan was not adopted.34
Two competing imperatives faced FEMA: provide safe housing for disaster
victims and remain responsible stewards of federal funds. The goal of transferring
applicants from hotels, motels, and state-leased apartments to apartments paid with
Section 408 rental assistance and manufactured housing was intended to address both
goals, but some maintain that efforts to achieve both ends resulted in a disruptive and
complicated process.35 It was within this environment of shifting deadlines and
lingering questions of applicant eligibility that reports of waste, fraud, and abuse
within the program surfaced.36 The situation led to litigation that continues to
embroil FEMA, applicants, and public interest groups.
33 Karen Walsh, The Hurricane Katrina Disaster: RCUSA Contributions to the Relocation
of Displaced Americans, DRAFT, September 6, 2005, available from the author.
34 However, the Post-Katrina Act, effective October 6, 2006, includes a provision that
provides the President the authority to “provide case management services, including
financial assistance, to state or local government agencies or qualified organizations to
provide such services ...”. See P.L. 109-295, 120 Stat. 1453.
35 Juliet Eilperin, “FEMA Extends Housing Deadline,” Washington Post, November 23,
2005, p. A8.
36 Testimony of Gregory D. Kutz, Managing Director, Forensic Audits and Special
Investigations in U.S. Congress, Senate Committee on Homeland Security and
Governmental Affairs, Hurricane Katrina: Waste, Fraud and Abuse Worsen the Disaster,
GAO-06-403T,hearing, 109th Cong., 2nd sess., February 13, 2006.

---

CRS-10
As of the end of 2006, approximately 40,000 households had been moved from
403 to 408 funding — either through CLC payments to landlords out of 408 funds
or from 408 payments made to applicants to continue apartment rentals.37 FEMA’s
presumption for this situation is that those households previously in 403 apartments
and qualified for, but not receiving, 408 payments represent people no longer in need
of FEMA assistance or those whose landlords did not make contact with CLC to
maintain the arrangement.38
Stafford Act Section 408
Stafford Act Section 408 housing is administered through the Individual and
Households Program (IHP), which consists of temporary housing and Other Needs
Assistance (ONA). The housing portion is 100% federally funded. The ONA part of
the IHP program (furnishings, uninsured medical costs, funeral expenses, etc.) is
cost-shared with the state, on a mandatory 75%/25% basis.39 The 408 amounts spent
for rental/repair/replacement assistance and ONA are deducted from an overall IHP
cap for each household, currently $28,800 (this amount is adjusted annually based on
the Consumer Price Index). Direct housing assistance — that is, aid associated with
mobile homes and travel trailers, is not deducted from that amount due to difficulties
in precisely calculating the amount of assistance involved. In addition to the Section
408 temporary housing assistance, other federal housing resources were also made
available by other federal agencies.
Traditional Section 408 Rental, Repair,
and Replacement Assistance
Assistance under Section 408 includes rental assistance to disaster victims who
have found suitable rental property. It also includes repair assistance to make a
dwelling habitable, and grants to contribute toward replacement housing for an
applicant whose home has been destroyed by a disaster event.40
The Katrina Experience. One of the greatest challenges in the post-Katrina
environment was the dearth of available rental property in the damaged area. As with
private homes, many rental units also sustained major damage or were destroyed. In
recognition of the difficulties inherent in this problem, Congress enacted a provision
in the post-Katrina Reform Act that would “provide for the repair and improvement
37 U.S. Department of Homeland Security, Federal Emergency Management Agency, “Fact
Sheet for CRS Inquiry” — November 27, 2006.
38 Ibid.
39 44 C.F.R. § 206.131(d)(2). Unlike other Stafford Act programs, the ONA cost-share
cannot be waived by the President. However, Public Law 110-28 did waive the ONA cost-
share provisions for all Gulf Coast states for the 2005 hurricane season.
40 42 U.S.C. §5174, Sec. 408 (c)

---

CRS-11
of multi-family rental properties in disaster areas to increase the rental stock available
to disaster victims in the immediate area.”41
Another Section 408 issue that emerged was FEMA’s definition of Fair Market
Rent (FMR).42 FEMA uses the FMR set by HUD for a metropolitan area, which
includes the cost of utilities. FEMA, however, pursuant to the Stafford Act, has
determined that the amount of financial assistance available is based on “the fair
market rent for the accommodation provided plus the cost of any transportation,
utility hook-ups, or unit installation not provided directly by the President.”43 FEMA
has traditionally interpreted the utility language to mean that hook-ups are the only
utility costs eligible for assistance. As a result of this difference, which was also
noted in ongoing litigation, Congress amended the Stafford Act to qualify utility
costs as eligible expenses.44
Existing federal policy, notably the Stafford Act and its administration by
FEMA, bases federal aid on the assumption that a household in need of temporary
housing assistance will not have permanently lost employment or its principal means
of support, let alone be displaced to another state. FEMA also presumes, based on
typical program performance, that the Section 408 assistance provided will be
relatively short in duration, generally much less than the 18 months of eligible help.45
Certainly, many disasters are far more localized within states and communities. With
a localized event, the difference in employment is the commuting distance from a
temporary housing location rather than the retention of the job itself.
The challenge of continuing employment is one fundamental difference between
most disaster declarations and an event such as Hurricane Katrina. This unique
circumstance of sudden joblessness on a large scale underlines the difficulties in
applying the Section 408 authority to catastrophic major disasters of this breadth,
magnitude, and duration. In essence, Hurricane Katrina exceeded all previous
experience and also the perceived reach of statutory authority.
An additional consideration in the post-Katrina environment was the
demographic profile of affected residents. As one report noted: “Hurricane Katrina
disproportionately impacted communities where the poor and minorities, mostly
African-Americans, resided. The three states where communities were damaged or
41 P.L. 109-295, 120 Stat. 1454. In Congressional testimony, FEMA Administrator David
Paulison noted that FEMA had not exercised this authority since the Agency had determined
that this work should be done by HUD. Testimony of FEMA Administrator David Paulison,
House Committee on Appropriations, Subcommittee on Homeland Security, “Federal
Emergency Management Agency: Is the agency on the right track?,” 110th Cong. 2nd Sess.
March 13, 2008.
42 42 U.S.C. §5174.
43 Ibid.
44 P.L. 109-295, 120 Stat. 1452.
45 Interview with Donna Dannels, Individual Assistance Branch Chief, FEMA, April 16,
2007.

---

CRS-12
flooded by the hurricane rank among the poorest in the nation.”46 This meant more
renters were affected, and many victims had little means of support. These victims
were sent far from home taking few or no resources with them.
Traditional Housing Repair and Replacement
When Hurricane Katrina struck, the housing repair element of Section 408
assistance authorized up to $5,000 in repairs to primary residences so that victims
could make their homes habitable. 47 These same homeowners may or may not have
received a Small Business Administration disaster loan for additional repairs. The
$5,000 cap had been in place for several years since the passage of the Disaster
Mitigation Act of 2000 (DMA2K- Public Law 106-390).
In addition to repair assistance, applicants whose homes have been destroyed
can qualify for up to $10,000 to be applied toward a replacement home. This benefit
is particularly available for mobile home owners without adequate insurance who can
use these funds toward the purchase of another unit.
Traditional Manufactured Housing
FEMA traditionally uses mobile homes and travel trailers to meet the needs of
disaster victims when needs cannot be met through home repair or available rental
units. Mobile homes are larger and are generally used to house applicants who are
unable to obtain rental housing in the area. Additionally, they are intended to meet
longer-term disaster housing needs. Travel trailers are smaller units that are usually
parked adjacent to the home so that the individual or family can continue repairs
while the home itself cannot be occupied and not have to pay for the space to park
the trailer. The units are also placed on existing commercial lots and in parks created
by FEMA for that purpose. The travel trailers “have been used principally for
shorter-term housing needs” following disaster events.48
Travel trailers, unlike mobile homes, are not classified as housing or dwellings.
Instead they are considered transportation since they are often moved from site to site
for recreational purposes. HUD has not established standards for trailers as it has for
mobile homes which are considered housing and are “designed to be used as a
dwelling.”49 The distinction between housing and transportation also becomes
important when considering FEMA’s own regulations which do not permit the
46 For additional information see, CRS Report RL33141, Hurricane Katrina: Social-
Demographic Characteristics of Impacted Areas, by Thomas Gabe, Gene Falk, Maggie
McCarty, and Virginia W. Mason.
47 The Post Katrina Reform Act amended this provision to remove the $5,000 cap. The
overall ceiling of $28,800 for the Individual and Household Assistance Program, however,
still applies. See, P.L. 109-295, 120 Stat. 1448.
48 U.S. Department of Homeland Security, Federal Emergency Management Agency,
“Alternative Housing Pilot Program — Guidance and Application Kit”, September 15, 2006,
p. 2.
49 24 CFR §3280.2.

---

CRS-13
placement of mobile homes within flood plains as temporary housing unless they are
elevated above the base flood elevation.50 This allows trailers to be placed in flood
plain areas on a temporary basis, particularly in group sites, while mobile homes may
not.
While manufactured housing is a form of temporary housing, it sometimes
gains permanence for the households occupying these units. This is based on a part
of the Stafford Act which provides that a unit “may be sold directly to the individual
or household who is occupying the unit if the individual or household lacks
permanent housing.”51 This is usually the case for applicants without other housing
options.52
The Katrina Experience. Congressional testimony by a FEMA official
noted that approximately 80% of manufactured dwellings were situated on private
lots on the Gulf Coast.53 This points to the large number of homes with major
damage following the hurricanes of 2005. During the post-Katrina recovery phase,
these trailers and mobile homes were the center of controversy for several reasons.
While manufactured housing is occasionally used, FEMA considers it the last
housing option to be employed, and then only if home repairs are impractical or if
there are no available units for rental assistance. But a catastrophic disaster such as
Katrina removes many options. It not only spreads disaster victims across the nation
but also makes home repair work difficult and slow at best. Additionally, a disaster
of this magnitude wipes out most available rental housing in the affected area. With
all of those factors considered, manufactured housing became the primary means of
providing temporary housing in Gulf Coast communities for an extended period of
time.
This form of housing also drew the media’s attention due to a large number of
units awaiting occupancy that have been stored in Hope, Arkansas.54 Some of the
reasons for the purchase of the excess units and the slow pace of their issuance are
discussed in the Issues section below.
Health and Safety Concerns in Manufactured Housing
For the Katrina and Rita disasters, manufactured housing was used to an
unprecedented extent. In summarizing the scope of the manufactured housing
mission, the DHS Office of Inspector General observed:
50 44 CFR §9.13 (c)(4)(I).
51 42 U.S.C. §5174 (d)(2)(A).
52 Paul Singer, “Camp FEMA,” National Journal, vol. 38, March 11, 2006, p. 26.
53 Testimony of David Garratt, FEMA Acting Recovery Division Director, in U.S. Congress,
House Committee on Financial Services, Federal Housing Response to Hurricane Katrina
hearing, 110th Cong., 1st sess., February 6, 2007.
54 “Congress, FEMA Try to Free Up Stockpile of Trailers,” National Public Radio, at
[http://www.npr.org/templates/story/story.php?storyId=5313004].

---

CRS-14
As of February 2007, in response to Hurricane Katrina, FEMA purchased a total
of 145,699 travel trailers and mobile homes at a cost of approximately $2.7
billion. FEMA is also paying to store and maintain manufactured homes at 13
staging areas. The estimated expense to maintain these Emergency Housing sites
is $36 million.55
Complaints regarding the safety of the units cropped up early in the recovery
period. As early as late November of 2005, just three months after Katrina had made
landfall, media accounts were highlighting formaldehyde issues prominently among
a listing of the environmental problems resulting from the storms:
Burning storm debris, more diesel exhaust, runaway mold and fumes from glue
and plywood in new trailers are irritating people’s lungs and nasal passages. ...
Dave Farragut of DeLisle got one of the first new trailers from FEMA. The first
couple of days the smell from the trailer made his eyes burn. When his girlfriend
moved in a few days later, she also got sick at first.56
On July 19, 2007, the House Committee on Oversight and Government Reform
held a hearing on the formaldehyde issue. Witnesses at the hearing included
residents who had reported health problems due to their stay in the manufactured
housing provided by FEMA. While the witnesses testified to their own health
concerns and their experience working with FEMA field staff to address those
concerns, the hearing also focused on FEMA documents that demonstrated
differences within the agency on how to respond to the reported health threats. As
the Oversight Committee’s Supplemental Memo explained:
In March 2006, news articles reported high levels of formaldehyde in FEMA
trailers. FEMA field staff urged immediate action, saying “This needs to be
fixed today,” “we need to take a proactive approach,” and there is an “immediate
need” for a plan of action. FEMA testing of a trailer occupied by a pregnant
mother and her infant in April 2006 — apparently the only occupied FEMA
trailer ever tested by FEMA — showed formaldehyde levels that were 75 times
higher than the maximum workplace exposure level recommended by the
National Institute for Occupational Safety and Health.
Despite the evidence of a formaldehyde problem in FEMA trailers, FEMA
officials in headquarters, acting on the advice of FEMA lawyers, refused to test
occupied FEMA trailers. One FEMA attorney explained: “Do not initiate any
testing until we give the OK. ... Once you get results and should they indicate
some problem, the clock is running on our duty to respond to them.”57
55 Testimony of DHS Deputy Inspector General Matt Jadacki, in U.S. Congress, House
Committee on Appropriations, Subcommittee on Homeland Security, 110th Congress, 1st
s
e
s
s
.
,

M
a
r
c
h

1
4
,

2
0
0
7
,

a
t
[http://www.dhs.gov/xoig/assets/testimony/OIGtm_MJ_031407.pdf].
56 Seth Borenstein and Chris Adams, “Major Health Crisis Emerging,” The Sun Herald
(Biloxi, MS), Knight/Ridder, November 30, 2005.
57 U.S. Congress, House Committee on Oversight and Government Reform, “Hurricane
Katrina Response — Committee Probes FEMA’s Response to Report of Toxic Trailers,”
S u p p l e m e n t a l M e m o a n d E x h i b i t s , J u l y 1 9 ,
2 0 0 7 , a t
(continued...)

---

CRS-15
FEMA Administrator David Paulison, the government witness at this hearing.
In his testimony, Mr. Paulison assured the Committee that an investigation was
underway in June, 2007, one month prior to the hearing, on the formaldehyde matter.
The group involved in the inquiry had a large cast of federal players including the
Department of Housing and Urban Development (HUD), the Department of Health
and Human Services (HHS), the Public Health Service, the Environmental Protection
Agency (EPA), DHS’ own Office of Health Affairs, and some industry
representatives as well. Administrator Paulison added that “Together, we are
beginning both short and long-term investigations. In fact, FEMA and CDC are
scheduled to begin phase one of a study in the Gulf Coast within the next few
weeks.”58
While not stipulating what phase one would represent, the actual testing of
trailer units by the CDC did not begin for another five months, starting on December
21, 2007.59 This delay was described by some as symptomatic of a longer delay in
recognizing the need for testing and of seeking to influence its results. As one press
account noted:
The revelations come nearly two years after early tests showed high levels of the
toxic gas in trailers and a month after a congressional committee accused FEMA
of pressuring the CDC to downplay health risks attached to the trailers due to
liability concerns. FEMA and CDC officials have denied the allegations.
“FEMA has acted throughout this not out of concern for the health of the people
who lived in the trailers but out of concern for public embarrassment and legal
liability,” said Rep. Brad Miller, D-N.C., of the House Committee on Science
and Technology, which launched an investigation.60
The test results announced by CDC found “higher than typical indoor exposure
levels of formaldehyde” in the travel trailers and mobile homes that have been
serving as temporary housing for thousands of disaster victims.61 In reaction to the
CDC results, FEMA announced a number of steps to accelerate the relocation of
disaster victims from the manufactured housing and into rental units, hotel and motel
rooms or other alternative housing. FEMA pledged to provide food assistance,
furniture for residents moving into unfurnished apartments, care for pets that may not
57 (...continued)
[http://oversight.house.gov/story.asp?ID=1420].
58 U.S. House of Representatives, Committee on Oversight and Government Reform,
“Hearing on FEMA’s Toxic Trailers,” July 19, 2007, Preliminary Transcript, pp. 117-118.
59 U.S. Department of Homeland Security, Federal Emergency Management Agency, “CDC
Releases Results of Formaldehyde Level Tests,” Release Number HQ-08-021, February 14,
2008, at [http://www.fema.gov/news/newsrelease.fema?id=42606].
60 Rick Jervis and Andrea Stone, “FEMA to step up trailer relocations,” USA TODAY,
February 14, 2008, at [http://usatoday.com/news/nation/2008-02-14-toxic-trailers_N.htm].
61 Ibid.

---

CRS-16
be permitted in hotels and motels, and assistance in the actual move from a
manufactured home to a safer residence.62
However, also in reaction to the CDC findings, a master complaint was filed
based on the health risk represented by the formaldehyde findings. The clients
“allege they were adversely affected by high formaldehyde levels in trailers supplied
by the Federal Emergency Management Agency”.63 In addition to FEMA, the
complaint also targets dozens of manufacturers. This action continues the trail of
litigation in the housing arena since the hurricane struck in 2005.
In light of the information now available, FEMA has made a decision to no
longer use travel trailers. However, FEMA will continue to use mobile homes since
these types of units are regulated, with safety standards, by HUD. As FEMA’s
“Interim Directions” explains:
Any type of manufactured housing regulated by HUD, or park model, may
continue to be installed in support of and occupied by eligible disaster victims.
FEMA will have the air quality of the unit independently tested to determine
formaldehyde levels.64
The assistance promised by FEMA to facilitate a rapid relocation for those
households currently in trailers will come at an additional cost that has yet to be
estimated. It also stands in a long line of changing deadlines and directions regarding
housing assistance over the extended disaster recovery period.65 A particular
dilemma in implementing this plan has been the relative paucity of rental units
available in the immediate disaster area. Also, since the great majority of remaining
travel trailer units are on private lots where owners are slowly repairing their homes,
there may be additional logistical challenges for the government and decisions for
families and individuals. In testimony before the Senate Homeland Security and
Government Affairs Committee, DHS Secretary Chertoff summed up the situation:
Now I recognize the reality is there’s not a lot of housing in the area, and that
may mean for some people they will have to move some distance away. That’s
been, frankly, one of the reasons why I think some people have been reluctant to
move out of trailers. But from any number of standpoints, whether it be
formaldehyde or just the fact that these trailers are not designed as permanent
residences, I think that people would be much better served if they bit the bullet
62 U.S. Department of Homeland Security, Federal Emergency Management Agency,
“FEMA Plan of Action on Formaldehyde Finding to be Implemented Immediately,” Release
N u m b e r H Q - 0 8 - 0 2 2 , F e b r u a r y 1 4 , 2 0 0 8 , a t
[http://www.fema.gov/news/newsrelease.fema?id=42611].
63 Daniel Fowler, CQ, Homeland Security, “Katrina Trailer Lawsuit Targets FEMA, but
F a c e s a T a l l L e g a l O r d e r , ” M a r c h 1 8 , 2 0 0 8 , a t
[http://homeland.cq.com/hs/display.do?docid=2690387&sourcetype=31].
64 U.S. Department of Homeland Security, Federal Emergency Management Agency,
“FEMA Interim Directions on use of Temporary Housing Units,” March 10, 2008.
65 “The Katrina Housing Debacle,” The New York Times, November 24, 2005, at
[http://www.nytimes.com/2005/11/24/opinion/24thu3.html].

---

CRS-17
and moved out. And we will do everything that we can, certainly, to facilitate
that. I guess a question we will have to wrestle with is whether we will compel
people to move out.66
Housing Inspections: Strengths and Limitations
Traditionally, almost all key decisions in the FEMA housing mission are tied
to an on-site inspection of the damaged housing by FEMA contract inspectors. The
inspections provide FEMA with information on the degree of damage to the structure
and contents of the house. The inspectors are assigned an address, locate the home,
and assess its status on a hand-held computer that enables information to be
downloaded rapidly to FEMA computers. The information is subsequently merged
with an applicant’s file.67
The Katrina Experience. With standing water throughout the southern
parishes and counties, on-site inspections could not be conducted for thousands of
homes for a considerable amount of time. As a result, FEMA used geo-spatial
mapping of the area to help determine eligibility for FEMA housing assistance.68
Geo-spatial mapping consists of overflights of an area that can produce maps that
identify the average depth of water in a specific geographic area. From these maps
FEMA can then project likely damage in that area. This form of verification was fast
and practical but could not offer the same detail as on-site inspection, particularly for
personal losses. Another key issue realized from Katrina is that the viability of
neighborhoods cannot be determined. Even though on-site inspection reports are
issued for each individual dwelling, the reports do not ordinarily provide, nor is it
their assigned mission to provide, a picture or an assessment of neighborhood-wide
conditions. For example, are schools or stores open? Is there general accessibility to
community resources? Are essential infrastructure components operational?69
66 U.S. Senate Homeland Security and Government Affairs Committee Hearing, "The
Homeland Security Department’s Budget Submission for Fiscal Year 2009,” 101st Cong. 2nd
sess. February 14, 2008.
67 U.S. Department of Homeland Security, Federal Emergency Management Agency,
“ D i s a s t e r A s s i s t a n c e - F r e q u e n t l y A s k e d Q u e s t i o n s , ” a t
[http://www.fema.gov/assistance/dafaq.shtm].
68 U.S. Department of Homeland Security, Federal Emergency Management Agency,
“Mapping Expedites Assistance for Louisiana,” press release no. 3215-029, February 9,
2006.
69 Bruce Nichols, “Houston Team Inspects New Orleans Homes,” Dallas Morning News,
April 13, 2006, at [http://www.redorbit.com/_include/banners/ad83.html].

---

CRS-18
Issues for Congress
National Disaster Housing Strategy
In Public Law 109-295, the post-Katrina Act, Congress directed FEMA to
develop, in concert with other federal departments and agencies, as well as the non-
profit sector and other interested parties, an overall strategy for disaster housing.70
This report was due 270 days after enactment, which would have placed its due date
in July of 2007. The report has not yet been submitted. However, in testimony to
Congress, FEMA Deputy Administrator Harvey Johnson pledged to deliver the
strategy report in April of 2008.71
This strategy will likely touch on the issues discussed below in this section
including FEMA’s collaborations with HUD, temporary housing options, and other
alternatives that could serve as “semi-permanent” housing in the wake of disaster.
Pending submittal of the housing strategy report, FEMA has taken several actions
that may reflect its future direction. Two of these actions are the Disaster Housing
Assistance Program (DHAP), which transferred management of long-term rental
housing to HUD, and FEMA’s recent announcement that it will no longer use travel
trailers, due to safety concerns, as a disaster housing option. Actions such as these
may be a component of a comprehensive disaster housing strategy, along with other
elements such as “Katrina Cottages,” mobile homes and their management, the
congressional authorization for “semi-permanent housing” in P.L. 109-295, and the
overarching themes of equity and choice. The Senate has begun consideration of
legislation (S. 2382) that would mandate actions by the FEMA Administrator that
may or may not be consistent with the strategy still under development by the
Administration. The bill would require that the Administrator assess the need for
manufactured housing units and develop a plan for permanently storing such units
or selling or transferring surplus units.
FEMA Group Site Location
The reluctance of parishes near to but outside of the disaster area to host
manufactured housing sites became a major impediment to development of a
coherent housing plan following Katrina’s impact. In late October, 2005, the
Louisiana state government requested that FEMA pay a version of “impact fees,”
similar to those assessed on developers by local communities when new construction
is planned.72 The state believed such help would encourage the outer parishes to
70 For additional details, see CRS Report RL33729, Federal Emergency Management Policy
Changes After Hurricane Katrina: A Summary of Statutory Provisions, Keith Bea,
Coordinator.
71 U.S. Senate, Homeland Security and Governmental Affairs Committee, Ad Hoc
Subcommittees on Disaster Recovery and on State, Local, and Private Sector Preparedness
and Integration, “Is Housing too Much to Hope for? FEMA’s disaster housing strategy,”
110th Cong. 2nd Sess., March 4, 2008.
72 “Louisiana’s Transitional Housing Impact Fee Plan, Draft,” October 3, 2005. Available
(continued...)

---

CRS-19
accept a significant number of mobile homes or travel trailers in their jurisdictions
by helping them defer increased costs to the community caused by the new temporary
sites. There is no record of FEMA responding officially to that overall proposal, but
some examples of previous actions arguably indicate FEMA had given some support
to the concept. Early in the disaster FEMA had set up temporary laundry facilities
for one trailer park. During the hurricanes of 2004 in Florida, FEMA had helped a
sewer district expand its capacity following the establishment of a trailer park within
that jurisdiction. In each case, these actions had been ad hoc decisions made by the
leadership in the field, not reflecting official policy.73
Later, in early November 2005, FEMA housing staff in Louisiana created their
own version of a “supporting services” listing, to encourage more local support for
the trailer parks. The proposal from the FEMA field staff was a six page
memorandum that described types of assistance that could potentially be available
to the hosting community from FEMA or other federal agencies. The recognized
areas for additional help to the local community included road repair and traffic
management, public works, and other community services.74 This proposal was not
adopted, but FEMA continued to review the suggestions.
FEMA ultimately decided it was authorized to provide limited community
service help and sent out a two-page memo in mid-December of 2005 offering
potential help for fire and safety forces that provide service to the trailer parks in their
jurisdictions.75 Some FEMA staff believed the delay in arriving at a decision and the
limited reach of the final decision resulted in increased reluctance on the part of local
officials to host such trailer parks. FEMA’s leadership took its position from the
Stafford Act quote that “the President may provide temporary housing units ....”76
Since Congress did not specifically authorize other support, FEMA concluded that
no other support is implied or was legally possible when creating a temporary
housing community.
FEMA Group Site Management of Services
FEMA’s interpretation of its limited authority to support the group sites that it
had established extended not only to the surrounding community, but to services
within the sites as well. FEMA considers the need for recreational facilities or
services to augment educational opportunities, or other services that contribute to a
sense of community, to be beyond any and all Stafford Act authorities, noting that
72 (...continued)
from author.
73 Interviews with former FEMA staff members Mike Hirsch and Brad Gair, January 18,
2007.
74 Strategy for the Provision of Services for Group Housing Sites - Hurricane
Katrina: Louisiana, revised DRAFT, November 10, 2005, available from author.
75 U.S. Department of Homeland Security, Federal Emergency Management Agency, David
Garratt, Disaster Specific Guidance - Hurricane Katrina and Rita Provision of Essential
Services in Support of Direct Housing, December 15, 2005.
76 42 U.S.C. § 5174.

---

CRS-20
these are intended to be temporary sites. Some contend that each additional service
provided is an enticement to transform a temporary site, as authorized by law, into
something far more permanent. It is argued that such a site with amenities and
services sponsored by the government does not contribute to the process of helping
residents transition to more permanent housing.
FEMA’s position, according to one journalist, is that such help, if needed,
should be provided by private charitable groups. However, in its interactions with
charitable groups interested in providing additional services, FEMA has reportedly
been a reluctant partner. In describing the philosophical approach to the management
of a trailer park site, such as Renaissance Village in Baker, Louisiana, one reporter
explained the FEMA position as follows:
FEMA is the federal agency charged with providing temporary housing to
displaced people. Its officials read that mandate very narrowly — they will
supply housing, and little else, for as long as 18 months while people get back on
their feet. ... The government provides evacuees a trailer, water and sewer lines,
and electricity. Residents must now get pretty much everything else on their own
or from a charity. FEMA does not want anyone to get too comfortable here.77
In the case of Renaissance Village, some charitable and social service groups
expressed particular concern because, “anyone” included nearly 370 children under
the age of 12.78 Some contend that community services are a necessary component
of a temporary trailer park because children need recreational opportunities and
facilities and child care and related services. Others, however, believe that the
establishment of services, and the long-term residency they imply, runs counter to the
interest of Congress to provide minimal or temporary housing.
In a hearing of the House Transportation and Infrastructure Committee’s
Subcommittee on Economic Development, Public Buildings and Emergency
Management, the subcommittee chair, Representative Norton, acknowledged the
complexity of the issue. Representative Norton signaled that FEMA should not be
required to provide comprehensive services on site or establish “a village” that could
further isolate the residents. Instead, she observed that FEMA should be providing
transportation to temporary housing residents to connect them with the surrounding
communities where services may already exist.79
77 Paul Singer, “Camp FEMA,” The National Journal, vol. 38, March 11, 2006, p. 25.
78 Ibid., p. 26.
79 Rep. Eleanor Holmes Norton, Chair, House Transportation and Infrastructure
Committee, Subcommittee on Economic Development, Public Buildings and Emergency
Management, Post-Katrina Temporary Housing: Dilemmas and Solutions, hearing, 110th
Cong., 1st sess., March 20, 2007.

---

CRS-21
Delivering Housing: When and Where
Certain issues had to be resolved prior to the installation of temporary housing
for Katrina victims.
One limiting factor for housing (both temporary and permanent) was the utility
problem in New Orleans. FEMA’s contractors were hard pressed to keep up with the
number of requests for temporary housing units; the lack of utilities meant that site
preparation lagged. Entergy is a private utility company that had been New Orleans’
last Fortune 500 company but found itself in precarious financial straits following
the devastating event.80 The lag time on utility restoration became yet another
“chicken and egg” situation. Which would come first: the arrival of housing units
or the utilities to support them? A similar question arose regarding neighborhood
schools: should the schools be repaired, or should the students be present first? The
inertia that resulted from these sticking points has been a common factor for post-
Katrina communities. Local leadership and community-based decision making
organizations arguably are equipped to set the priorities that could resolve these
issues. FEMA’s local partnerships, particularly the interaction of a Federal
Coordinating Officer and staff with experience in similar situations, can be useful.
Their cooperation with local leadership can contribute to a more effective transition
for the community.
Issues also arise as to where temporary manufactured housing should be sited.
FEMA’s regulations prohibit the placement of mobile homes in flood plains to avert
similar disasters in the future.81 This has discouraged the placement of housing
needed by Katrina victims. FEMA has, however, permitted the use of travel trailers
(rather than mobile homes) in such vulnerable areas under the assumption that they
can be moved out of harm’s way more rapidly. This assumption is questionable
when large numbers of travel trailers are being used in a concentrated area and
FEMA requires that contractors strap down all of the manufactured housing installed
on the Gulf Coast. The increased safety created by tying down the mobile homes
restricts mobility. This is a dilemma without a simple answer since it involves the
pursuit of two goals potentially in conflict — the need to provide housing in
proximity to the disaster-stricken area and the assurance that safe temporary housing
will be placed in secure, disaster resistant areas.
The high levels of formaldehyde in travel trailers and mobile homes revealed
by the Centers for Disease Control (CDC) serves to underline the importance of
health and safety concerns when establishing temporary housing for disaster victims.
FEMA has indicated it may continue to employ mobile homes that are subject to
HUD and industry standards for their safety but will no longer use travel trailers since
similar standards do not exist. The commitment of DHS/FEMA to no longer use one
type of temporary unit is arguably understandable given the recent experience. But
some may question what the alternative form of housing will be since the travel
trailers were such a commonly used resource in previous FEMA recovery operations.
80 “Entergy New Orleans files for bankruptcy”, CNN Money.com, September 23, 2005, at
[http://money.cnn.com/2005/09/23/news/fortune500/katrina_entergy/].
81 44 C.F.R. §206.117(b)(ii)(C).

---

CRS-22
An additional topic of interest is the influence of FEMA’s temporary housing
program and policies on eventual resettlement and rebuilding decisions at the state
and local levels. Some of the FEMA recovery program elements fall outside the
defined temporary housing arena but have a direct impact on rebuilding and other
related developments within the disaster area. This includes elements such as
transportation costs for victims to return to their homes, the establishment and
locations of group temporary housing sites, and the progress of infrastructure repair
and mitigation projects and the support they could provide for neighborhood
redevelopment.
FEMA involvement in community rebuilding is considerable, but local decision
making is also important to accelerate the work. FEMA actions are dependent on
choices and priorities established by the state and local governments, in terms of both
infrastructure repair and the priority given to debris removal and mitigation projects.
Conversely, when fundamental decisions, like those concerning cost-share waivers
are delayed, very little can proceed at the local level. The experience of FEMA (and
its federal, state, and local partners) over the last two years may provide a guide to
what worked well, what did not, and what options remain under current authorities.
Equity in Assistance
A key concern in the implementation of disaster temporary housing programs
was how to achieve equity with a huge and diverse population that was receiving
various degrees of assistance. The variation depended not only on a family’s or
individual’s circumstances (for example, whether relatives were able to provide
help), but also on the resources of the receiving state. One concern was that those
receiving 403 assistance would have all of their 408 accounts remaining (referencing
the $28,200 maximum available under the Individual and Households Program),
while those who had successfully registered and received help through more
traditional FEMA processes were already drawing down from the total Section 408
amount available to them and their families. Given the unprecedented size of this
disaster, the 403 solution bought necessary time while the 408 processing went on.
However, as a result, some were arguably penalized for their prompt application for
Section 408 aid.
Efforts to address the equity problems in the delivery of FEMA disaster housing
may consider the exclusion of initial housing costs under Section 408 from the
legislative caps (see Options section of this report). Under this arrangement, all
applicants would begin with the same amount of available resources within their IHP
accounts. This change, however, would increase costs since it would be equivalent
to increasing the amount of help made available. Further, all of the aforementioned
considerations do not include the assistance some families and individuals received
from charitable groups as well.

---

CRS-23
Choice for Disaster Assistance Applicants
Disaster victims have limited discretion to choose among the types of housing
assistance authorized. The Stafford Act authorizes the President to provide “financial
assistance, and, if necessary, direct services.”82 Those applying for help must
generally accept the form of housing offered. This is underlined in FEMA’s
regulations, which stress that an applicant is “expected to accept the first offer of
housing assistance” and threatens forfeiture of benefits if aid is refused.83 How much
choice should be involved when the government is providing a direct benefit to the
disaster victim? In the case of Katrina disaster victims in Louisiana, FEMA
estimates it will eventually expend more than $10 billion to provide human services
(housing, crisis counseling, disaster unemployment assistance) to that population.84
Given such expenditures, government officials may be expected to make choices that
combine sound stewardship of funds with efficient management.
Conversely, the misfortune of a natural or man-made disaster can determine a
family’s housing choices and actual housing location for an extended period of time.
But the housing aid offered has a couple of imperatives that may not be
complimentary. A key question is whether the goal of the housing mission in the
Stafford Act is to place families as close to their original residences as possible or
to house as many people as economically as possible? In a catastrophic situation
involving thousands of evacuees, the idea of choice may be temporarily exchanged
for an immediate response, with different results. As the Director of the Natural
Hazards Research and Application Center observed:
Worse yet, instead of having their needs addressed in a timely manner, those
stranded in New Orleans after Katrina were not so much assisted as they were
policed. Literally treated like criminals, they were confined to shelters under
strict control. Later, they were transported, again under the control of law
enforcement agencies and the military, to over forty states around the country,
without even having the opportunity to choose where they would be sent.85
The use of housing vouchers does not necessarily enable a victim to return to
an area with very few remaining rental units available, nor can vouchers
accommodate the desire of a displaced person for a rapid return. But the vouchers
can provide a greater degree of choice, as a Heritage Foundation housing expert
explained:
Obviously, giving evacuees access to housing vouchers that can be used in
any metropolitan area in the nation will increase the likelihood that many
will choose not to return. With vouchers, they will have access to better
82 42 U.S.C. § 5174.
83 44 C.F.R. § 206.110(c).
84 DHS-FEMA Disaster Relief Fund Monthly Report to Congress, April 6, 2007, p. 12.
85 Kathleen Tierney, “Social Inequality, Hazards and Disasters” in Ronald J. Daniels,
Donald F. Kettl, and Howard Kunreuther, eds., “On Risk and Disaster: Lessons from
Hurricane Katrina,” (Philadelphia: University of Pennsylvania Press, 2006), pp. 122 and
123.

---

CRS-24
housing than they had in the slums of New Orleans and will have the choice
to remain in communities where they can improve their standard of living
and quality of life.86
After the Katrina disaster, FEMA generally provided the initial form of
assistance it would normally provide in most disasters: rental assistance in the form
of a check (or an Electronic Fund Transfer) equal to a couple of months rent for the
area where the applicant was located. This provision of cash assistance provides
flexibility to victims to use the funds to meet their housing needs and, if funds
remain, to meet other disaster-related needs.
Housing vouchers issued by HUD can provide both choice and mobility.
Also, given the nature of the vouchers being issued by housing authorities that
establish relationships with landlords, the vouchers offer more controls and
accountability. But in the case of Katrina, HUD vouchers were never used apart from
the assistance given to some households that previously received HUD aid. In the
area of choice, the distinction between cash and vouchers becomes more
complicated. A cash grant provides the ultimate discretion to a disaster victim on its
use, with reporting of those uses trailing months behind. A voucher also gives the
victim wide latitude, but is more directed toward housing resources. Additionally,
the relationship with the issuing authority (e.g. a local public housing authority)
offers the potential of additional help for consultation on housing issues.
Most localized disasters do not involve the problems of applicants being
displaced vast distances from their homes, jobs, and schools. The evacuation after
Katrina had to be carried out rapidly, since there were no housing resources in the
flooded city. The speed of the evacuation appeared to make choice a moot point.
Could the evacuation have been organized to a point where evacuees could have
chosen a destination? The requirement for prompt action argued against that, but
transportation funds were provided to reunite families at the location of their choice.
Although difficulties are readily apparent, the matter of choice remains an issue for
consideration in general for disaster housing law and policy.
Incentives for Communities
Some contend that, in light of the Katrina experience, the Stafford Act should
include incentives for communities to host temporary housing sites that could
become permanent housing subdivisions. It may be argued that Congress provided
some of this flexibility by replacing “temporary housing” with “semi-permanent
housing” authority within the Post-Katrina Act (P.L.109-295).87 On the other hand,
some may argue that hosting communities have existing incentives since they already
benefit from spending by the residents of the sites at local business establishments
where they purchase products and services, and pay local taxes.
86 Ronald Utt, “After Weeks of Confusion, the Right Course for Evacuee Housing
A s s i s t a n c e , ” H e r i t a g e F o u n d a t i o n , S e p t e m b e r 2 8 , 2 0 0 5 , a t
[http://www.heritage.org/Research/SmartGrowth/wm866.cfm].
87 P.L. 109-295, 120 Stat. 1447.

---

CRS-25
In the same vein, it may be argued that FEMA should have explicitly defined
authority regarding the agency’s ability to make large temporary housing sites more
supportive of community spirit and recovery. As the earlier discussion in this section
on “Management of Services” indicates, there has been confusion during the post-
Katrina recovery as to who should or would even be permitted to provide such
additional help for these temporary communities. Some have observed that this form
of support for the group trailer sites could become the fundamental contribution made
by the state and its local governments to the temporary housing mission.

Unintended Consequences
For two decades (1975-1995) FEMA maintained its own manufactured
housing storage sites (principally at Palo Pinto, Texas and Bluegrass, Kentucky)
where the units were stored and refurbished for future use. This was a challenging
proposition (as the current Hope, Arkansas experience attests) since the quality of the
units’ upkeep was, at least in part, determined by the forces of nature and age. The
condition of the units was diminished further by repeated travel to disaster sites and
back to the storage sites.

In 1995, FEMA’s Reinventing Government, Phase II Committee,
recommended the closing of the two sites and the sale of the units, arguing that local
purchasing, as needed, would be more efficient. The committee also noted that most
temporary housing in the early 1990s had been provided through home repairs and
rental assistance. This was partly due to the Northridge earthquake experience (at the
time FEMA’s costliest disaster), where repair and rental assistance, due to the area
affected, were more useful options for temporary housing than was manufactured
housing. This recommendation was adopted; the sites were closed, and the GSA
auctioned off and/or dispersed the remaining units. As a consequence, since stand-by
contracts were not in place, FEMA officials had to make fast and expensive decisions
to purchase thousands of housing units.
Another unanticipated consequence occurred with the reduction of home
repair grants from $10,000 or more to $5,000, the elimination of the Mortgage and
Rental Assistance Program (MRA) discussed later in this report, and the elimination
of the option for households who failed to qualify for SBA loans to return to FEMA
for additional help with home repairs. Those changes, enacted in the Disaster
Mitigation Act of 2000 (DMA2K), arguably pushed FEMA back in the direction of
providing direct housing assistance in the form of manufactured housing.
Previously, greater assistance had been available for home repair, since it had
long been the preferred form of disaster temporary housing assistance.88 As GAO
pointed out in its report following the Northridge earthquake in 1994: “Individuals
and families whose homes are damaged can apply to FEMA for a grant, to make
repairs to restore habitability. For the Northridge earthquake, applicants could obtain
a maximum of $10,000.”89 But at times, the amount was more than that. As the
88 42 U.S.C. § 5174.
89 U.S. Government Accountability Office, Los Angeles Earthquake: Opinion of Officials
(continued...)

---

CRS-26
FEMA Office of Inspector General pointed out, according to a study prepared by
FEMA, “four percent received awards of $10,000 or more, which accounted for 18
percent of expenditures.”90
The cap on housing repair was a significant part of DMA2K, P.L.106-390,
and was the main source of savings in temporary housing that the Congressional
Budget Office estimated at “$10 million for 2002 and $19 million in each following
year.”91 The $5,000 cap had been a point of contention since its legislative
imposition in 2000; changing the provision had been a goal of groups active in
disaster recovery work.92
Some tried, apparently without success, to read additional help for home
repair into the law.93 But FEMA contended the cap provided no recourse for
families and individuals unable to obtain SBA loans. The cap has now been
removed by the Post-Katrina Act.94 However, the cap on home repairs was in place
during Katrina and for a year after that event. Given the smaller amount available for
home repairs, as well as the devastation of the Katrina event that made repairs more
costly and time-consuming, manufactured housing became the only alternative based
on the time pressure associated with Katrina.
The priority use of manufactured housing may not have been a preferred
option, but it was one that, if coupled with a drastically diminished rental inventory
in a disaster area (e.g., Katrina, unlike Northridge), provided housing opportunities
as other possible housing avenues were decreasing. However, health and safety
concerns based on the Katrina experience may reduce the future use of this form of
89 (...continued)
on Federal Impediments to Rebuilding, GAO/RCED-94-193, p. 2, at
[http://archive.gao.gov/t2pbat3/151823.pdf].
90 U.S. Department of Homeland Security, Federal Emergency Management Agency,
Inspector General, Audits of Home Repair Grants Provided Through FEMA’s Disaster
Housing Program, September 20, 1996, p. 7.
91 U.S. Congressional Budget Office - Cost Estimate, H.R. 707 Disaster Mitigation and Cost
R e d u c t i o n A c t o f 1 9 9 9 , M a y 5 , 2 0 0 0 , a t
[http://www.cbo.gov/showdoc.cfm?index=2025&sequence=O&from=6].
92 National Voluntary Organizations Active in Disasters (NVOAD), 2006-2007 Priorities
for the National VOAD Public Policy Committee, August 1, 2006, at
[http://www.nvoad.org/report.php?reportid=159].
93 Senator Robert Smith, et al., “Robert T. Stafford Disaster Relief and Emergency
Assistance Act,” remarks in the Senate, Congressional Record, daily edition, vol. 123,
(October 5, 2000), p. S10019. Since the DMA2K had been enacted without a House-Senate
conference, several questions regarding legislative intent were in question. Former Senators
Bob Graham and Bob Smith held a colloquy on their intent to allow applicants turned down
by SBA to return to FEMA for additional help. It concluded with Senator Graham’s
summary that “if an individual or a household was unable to obtain a loan from SBA, or
assistance from another source, then they could be eligible to receive additional emergency
home repair assistance ....” Senator Smith concurred with that assessment of the legislation.
94 P.L. 109-295, 120 Stat. 1448.

---

CRS-27
housing. Vouchers offer some freedom of choice for displaced applicants, but the
existence of vouchers alone cannot reconstitute rental housing options in an area as
demolished as southern Louisiana.
Closer to Home: FEMA’s Original Plan
FEMA’s original plan for housing strategy solutions immediately following
the impact of Hurricane Katrina, titled “Closer To Home,” anticipated some of the
problems that have confronted the housing mission since September 2005. The plan
included the concept of “transitional communities” to meet the needs of large
events.95 The plan proposed that communities provide sites for a temporary housing
solution for disaster victims that would offer the amenities and support services that
could lead to a transition back to their home communities. The plan also included
the framework for that same transitional community to become a permanent housing
addition to its host area. Though FEMA/DHS leadership did not act on the strategy,
the Director of the Office of Recovery and Renewal for the State of Mississippi also
noted the “transitional communities” concept as a promising avenue to explore as a
means to “supplementing housing needs.”96 Opponents of the concept might contend
that communities unwilling to accept temporary manufactured housing would be
much less likely to consider a semi-permanent housing development.
Although the notion of transitional communities was not accepted in the early
days of post-Katrina recovery, subsequent congressional action on “Katrina
Cottages” and the concept of alternative housing indicates a policy shift in viewing
some temporary housing as a prelude to semi-permanent or permanent housing.97
When considering such an approach, maintaining a distinction between catastrophic
disasters and most disasters may be important. The larger events arguably might
invite bold thinking and creative approaches. Smaller disasters may not require
transitional communities, only the repair and restoration of the disaster-damaged
community.
Victims Without Homes
Even with the enormous commitment of federal resources following Katrina
and the varied forms of available help, there were still applicants deemed ineligible
for traditional federal assistance programs (from both FEMA and HUD). These were
people with no previous permanent address who were not receiving official
government help before they were evacuated. In many instances they became wards
of the community that had accepted them as evacuees. However, HUD did provide
voucher assistance for this special group through the Katrina Disaster Housing
95 U.S. Department of Homeland Security, Federal Emergency Management Agency, Closer
to Home — Housing Strategy Solutions in Response to Hurricane Katrina, September 12,
2005, Appendix B, p. 28, available from the author.
96 Statement of Gavin Smith, Director, Office of Recovery and Renewal, State of
Mississippi, before the House Financial Services Committee, Subcommittee on Housing and
Community Opportunity, January 14, 2006.
97 P.L. 109-234, § 2403, 120 Stat. 460.

---

CRS-28
Assistance Program - Special Needs (KDHAP-SN) program and subsequently the
Disaster Voucher Program. Congress may ultimately choose to explore the needs of
these applicants and their status (previously homeless, part of a separated household,
etc.) in future disasters to determine if the help provided should be by exception or
through standard programs.
To date the answer has been simple and direct under FEMA authorities:
previously homeless individuals and families will return, as with other disaster
victims, to their pre-disaster status. When they are moved from the mass shelters
they could again be homeless. Reliance upon only this approach, following
Hurricane Katrina, would have meant that these individuals and households were
solely dependent upon the local government and the existing social service structure
in the area that had hosted their evacuation.98 But given the help from the KDHAP-
SN program, the local hosts had some resources to call upon to meet the special
needs of this population.99
Should the fact of being in a disaster area improve someone’s circumstances?
Perhaps not, but the government also can consider the results it wishes to see from
its investment in such an event. If FEMA temporary housing assistance is not
available under current regulations for previously homeless families and individuals,
then the KDHAP-SN program might be considered as a possible model in the post-
disaster environment for limited service for a known population with identified
needs. As with other housing issues, this may be another area that lends itself to
more collaboration between FEMA and HUD in establishing general policies rather
than ad hoc approaches.
FEMA had faced similar problems in the past with distinctly different
responses and results (see Appendix B of this report). The basic issue is whether
federal disaster policy should essentially return victims to their pre-disaster
conditions or whether the disaster recovery process should facilitate an improvement
in individuals’ conditions, or at least a continuation of previous aid, such as the HUD
program in the wake of Katrina.
98 “Post-Katrina Issue,” Catholic Legal Immigration Network, Inc., at
[http://www.cliniclegal.org/Katrina/Newsletters/Jun012006newsletter10.pdf].
99 U.S. Department of Housing and Urban Development Notice PIH 2006-12, “Disaster
Voucher Program (DVP) Supplemental Guidance: Rental Assistance for Special Needs
Families Displaced by Hurricanes Katrina and Rita,” at [http://www.
nelrod.com/dvp%20sn%20guidance.pdf].

---

CRS-29
HUD-FEMA and Long Term Housing
On April 26, 2007, the Administration announced that it would extend
disaster temporary housing assistance through March of 2009. This new Disaster
Housing Assistance Program (DHAP) provides HUD with the resources from FEMA
to assume the management of the rental assistance program.100 There were a few
significant differences between the former FEMA program and the new HUD-
managed program. One housing authority participating in the program explained
that:
evacuees who continue in the program will be required to sign up with a
case manager designated by the housing authorities. Beginning in March
2008, evacuees must begin paying $50 monthly toward their rent. That
amount will increase by $50 monthly until the end of the program.101
FEMA had announced that the same formula of payments would apply to disaster
victims staying in mobile homes or travel trailers.102
The program is slated to run through March of 2009, which means that
temporary housing rental payments will have been made for more than three and a
half years, far beyond the one and half year limit in the Stafford Act. But the
extension has been defended as being in keeping with the statutory language and
program regulations that permit extension for “extraordinary circumstances.”103
The decision to vest DHAP program responsibility in HUD conforms with
a recommendation made by the White House staff in the “Lessons Learned” report
issued by the Administration after Hurricane Katrina. The report recommended that
HUD be designated the lead federal agency for the provision of temporary housing
for disaster victims, but that the Department of Homeland Security should retain
responsibility for coordinating “the entire disaster response.”104 Some may contend
that this recommendation and the Administration decision to give HUD responsibility
runs counter to the congressional directive that the “President, acting through the
[FEMA] Administrator ... shall establish and conduct a pilot program ... designed to
make better use of existing rental housing ... to provide timely and cost-effective
100 U.S. Department of Housing and Urban Affairs, “Disaster Housing Assistance Program
(DHAP),” at [http://www.hud.gov/news/dhap.cfm].
101 Community Settlement Network, “HUD Selects Housing Authorities for DHAP Houston
R e n t a l P l a n , ” A u g u s t 3 0 , 2 0 0 7 , a t
[http://www.houstonhurricanerecovery.org/show_content_article.asp?id=8142007-103310].
102 U.S. Department of Homeland Security, Federal Emergency Management Agency, “Fact
Sheet: Providing Continued Assistance For Gulf Coast Hurricane Victims,” Release
N u m b e r : H Q - 0 7 - 0 4 2 , A p r i l 2 6 , 2 0 0 7 , a t
[http://www.fema.gov/news/newsrelease.fema?id=35730].
103 44 CFR § 206.110 (e).
104 White House Katrina Lessons Learned Report, Recommendation #69: “Designate HUD
as the lead federal agency for the provision of temporary housing,” at
[http://www.whitehouse.gov/reports/katrina-lessons-learned/appendix-a.html].

---

CRS-30
temporary housing assistance ... where alternative housing options are less available
or less cost-effective.”105 However, others might agree with the contention of the
FEMA Administrator, however, that the repair of rental units is appropriately a
continuation of HUD’s everyday responsibility. As a result, FEMA has not
responded to congressional directive.106
The Road Home
The “Road Home” program in Louisiana would merge Community
Development Block Grant (CDBG) funding and FEMA Section 404 hazard
mitigation grant funds and other funding sources to re-establish communities. This
is the large program to rebuild and replace residences and help compensate
homeowners and encourage their return.107 Follow-up studies and the data from this
program may provide important information on how, or if, Stafford Act assistance
contributed to the eventual reconstruction of communities.
FEMA has raised objections that the “Road Home” program may not be
following the statutory direction of the Stafford Act. The prime “statutory direction”
FEMA is referencing is the use of Hazard Mitigation Grant Program (Section 404)
funds within the “Road Home” to ensure safer and more disaster resistant housing.
Section 404 is the section within the Stafford Act that authorizes mitigation
assistance. Mitigation projects are the projects that provide protection from natural
hazards and help to reduce damage from future disaster events. Given the rebuilding
going on in the disaster area, FEMA’s emphasis on stressing the hazard preventive
nature of these funds appears to reflect the intent of Section 404. What is unclear in
the dispute is the degree of agreement between FEMA and the State of Louisiana to
ensure that the repair or replacement of homes under the “Road Home” incorporates
mitigation measures to build back safer housing and reduce future risks.

Another source of the dispute is that the state has been seeking federal
funding commensurate with the number of homes destroyed or with major damage.
The federal government has responded that the help was intended only for flooding
victims and not for homeowners who lost their homes due to hurricane force
winds.108
105 P.L. 109-295, §689(I), 120 Stat. 1454.
106 Testimony of FEMA Administrator David Paulison, House Committee on
Appropriations, Subcommittee on Homeland Security, “Federal Emergency Management
Agency: Is the agency on the right track?,” 110th Cong. 2nd sess. March 13, 2008.
107 For further information, see CRS Report RL34410, The Louisiana Road Home Program:
Federal Aid for State Disaster Housing Assistance Programs, by Natalie Love.
108 Bruce Alpert, “Road Home rescue unlikely, Powell says,” Times-Picayune, May 25,
2007, at [http://www.nola.com/news/t-p/frontpage/index.ssf?/base/news-
8/1180078623155350.xml&cloo=1& thispage=3].

---

CRS-31
Mortgage and Rental Assistance
Congress might elect to give attention, in the reviews of the recovery phase
of Katrina, to how mortgages were handled. Various lenders suspended payment
schedules or made other allowances that permitted homeowners to hold on to their
homes while still being able to fund their own interim housing needs. For example,
a report by the Government Accountability Office (GAO) noted that:
HUD’s Federal Housing Administration (FHA) also issued a 90-day
moratorium on foreclosures for all FHA-insured loans on properties located
in areas affected by Hurricanes Katrina and Rita. HUD subsequently
extended the moratorium on foreclosures twice for areas eligible for
FEMA’s Individual Assistance, because it found that due to the magnitude
of storm damage, lenders and borrowers may still need additional time to
develop and finalize plans for home repairs and resumption of mortgage
payments.109
The initiatives of Fannie Mae were another example of special steps taken in
the aftermath of Katrina were. As a Fannie Mae official explained:
To address the potential for “sticker shock” down the road when
homeowners began to make up missed payments we authorized loan
servicers to modify loan terms and develop repayment plans. We placed
a one-year moratorium on all foreclosures in the most damaged areas.
Once that moratorium expired we continued to work through our lender
partners to give individual homeowners time to pursue insurance and
government assistance and make critical decisions about rebuilding and
relocating. Also we asked credit agencies not to report mortgage payment
delinquencies.110
Congress could opt to evaluate the FHA and Fannie Mae actions.111 The
Section 408(b) Mortgage and Rental Assistance (MRA) program of the Stafford Act,
as amended in 1974, was not included in the Section 408 amendments in DMA2K
that took effect following the World Trade Center disaster. The MRA program
helped victims maintain their mortgages and rents until they could return to the area
and their dwellings. FEMA, however, concluded that it was too cumbersome
administratively to “1) define the victim ...2) determine the extent of the applicant’s
inability to pay ... 3) ... verify losses of income and late payments and ... 4) determine
the appropriate period for the provision of MRA assistance.”112 Congress apparently
109 Government Accountability Office, Catastrophic Disasters - Enhanced Leadership,
Capabilities, and Accountability Controls Will Improve the Effectiveness of the Nation’s
Preparedness, Response, and Recovery System, GAO-06-618, September 6, 2006.
110 Interview with Fannie Mae staff, May 3, 2007.
111 Sen. Feinstein and Sen. Boxer have introduced S. 2386, the Mortgage and Rental Disaster
Relief Act of 2007, which approximates the former MRA program. See CRS Report
RS22828 Mortgage and Rental Assistance as Disaster Relief: Legislation in the 110th
Congress, by Francis X. McCarthy.
112 U.S. Federal Emergency Management Agency, “Mortgage and Rental Assistance,” by
(continued...)

---

CRS-32
agreed, and struck the MRA authority from the Stafford Act. Thus, MRA was not
available from FEMA for Hurricane Katrina victims.
In the 110th Congress, legislation has been introduced, S. 2386, that would
restore the MRA program in the Stafford Act.
Katrina Cottages
The “Katrina Cottages” program grew out of the architectural suggestions
that were a part of the creative response to this catastrophic event. “Katrina
Cottages” now serves as a generic term for alternative housing that provides more
living area, a more attractive physical appearance and the capacity to withstand
hurricane force winds. The “Katrina Cottages” generated so much interest that
Congress authorized a trial program to evaluate different versions of these dwellings
in different settings across the Gulf Coast.

The “cottages” may eventually be considered an alternative to FEMA’s
current use of manufactured housing. The changes in P.L.109-295, specifically the
references in the post-Katrina Act to “semi-permanent” housing, arguably authorize
the use of such cottages. The awards for this $400 million pilot program have been
made amidst some controversy regarding the selection process.113 A report by the
DHS Inspector General observed that “As a consequence of FEMA decisions, the
communities hardest hit by the 2005 hurricanes did not receive proportional shares
of the $400 million appropriated for the program.”114
As the Katrina Cottages pilot program progresses, it warrants additional study
to assess its impact and whether it lends itself to replication in varied disaster
settings. Such an assessment is now a part of the Joint Housing Solutions Group
(JHSG) established by FEMA’s Disaster Assistance Directorate (formerly the
Disaster Recovery Division). The JHSG includes:
housing specialists from the U.S. Department of Housing and Urban
Development; building science experts from the National Institute of
Building Sciences (NIBS); and specialists from FEMA housing policy,
Individual Assistance, Long Term Recovery and Public Assistance
divisions. The group is exploring the latest in factory-built contemporary
housing, modular homes based on universal design, housing built from
recyclable materials, and innovative work by schools or architecture and
design at universities across the country.115
112 (...continued)
Mike Hirsch, formerly with the Office of General Counsel, May, 2003.
113 Bill Barrow, “Financing feud mires Katrina Cottages,” Times Picayune, at [http://
www.nola.com/frontpage/t-p/index.ssf?base/news-a/11877624359270.xml].
114 U.S. Department of Homeland Security, Office of Inspector General, 016-07-39,
“Evaluation of the Federal Emergency Management Agency’s Alternative Housing Pilot
Program,” p. 4.
115 U.S. Department of Homeland Security, Federal Emergency Management Agency,
(continued...)

---

CRS-33
The group has noted that its review will place special emphasis on “indoor
air quality hazards in FEMA-provided temporary housing units.”116 The JHSG has
developed an assessment tool for alternative housing to test housing in the field and
also has suggested the development of specifications that could be used in the
development of new housing lines. The work of the JHSG may be a part of the
Disaster Housing Strategy that has been promised by FEMA to be provided to
Congress in April of 2008.

115 (...continued)
“FEMA Evaluating Non-Traditional Alternatives To Trailers/Mobile Homes for Future
Disaster Housing,” Release Number: HQ-08-028, February 29, 2008, at
[http://www.fema.gov/news/newsrelease.fema?id=42811].
116 Ibid.

---

CRS-34
Possible Congressional Approaches
Congress has generally chosen to address significant disaster situations in an
ad hoc fashion, in part because individual disasters often have unique requirements
and also because large disasters frequently require supplemental appropriations.117
Within those supplemental appropriations bills, Congress has addressed disaster-
created needs across the government. This has entailed crafting legislation to fund
specific programs within different departments and agencies and also directing
certain actions, or waiving certain provisions in law, to assist the disaster response
and recovery efforts. This section discusses some options Congress may choose to
consider incorporating into standing law to hasten the response and recovery effort
and eliminate some uncertainty in policy and program applications following large
disaster events.
Catastrophic Tier
A catastrophic tier for disaster relief, in housing and other elements of the
recovery process, is a policy area that Congress might address. The aftermath of
Hurricane Katrina illustrated the challenge of implementing Stafford Act programs
on a large, national scale. Programs that work effectively in a multi-county area of
one state or two can be overwhelmed by a multi-state catastrophic event that poses
problems not previously addressed.
The catastrophic disaster tier could be triggered by the number of potential
applicants or evacuees, estimated damage (including a large per capita amount), or
disruptions to continuity of government. Other factors could include widespread,
nationwide dispersal of population, questions regarding the viability of the affected
areas to allow residents to return, the span of the geographical area affected,
destruction to centers of employment, the time residents might be forced to be away
from their homes, and similar elements.
Any catastrophic tier could arguably be tied to a high threshold not easily
reached in lesser events. The rhetorical argument often broached is that every
disaster, regardless of size, is a catastrophic event for the individuals and families
involved. While this argument may be difficult to sustain, some might attempt to do
so. Some states may point to their own limitations (legal and budgetary) as an
argument for waivers of cost-shares and regulations in non-catastrophic events. The
Stafford Act already provides the President with the discretionary authority to make
judgments on when an event is beyond the capabilities of the state and local
governments.118 But while that discretion is provided for an initial disaster
declaration, additional guidance might be desirable to establish criteria for a separate
tier for catastrophic events. The following are some of the policy areas that could
receive attention with regard to disaster housing after “worst case” events occur.
117 For additional information, see CRS Report RL33053 Emergency Supplemental
Appropriations Legislation for Disaster Assistance: Summary Data, Keith Bea and Justin
Murray.
118 42 U.S.C. §5170.

---

CRS-35
Catastrophic Housing
One possible approach is to develop something like an automatic three-to-six
month FEMA Section 403 sheltering/housing program for all disaster victims of a
catastrophic event, with FEMA Section 408 assistance commencing for all eligible
applicants at the same date and time when the system is ready to absorb the large
numbers. The time-span of such a sheltering/housing program could be shifted to
nine or 12 months, depending on the federal and state governments’ ability to make
contact with victims and provide them resources for alternative forms of housing.
This might help to address equity concerns.
Rather than concentration on Section 403, Congress could consider amending
the Stafford Act or the pertinent HUD authorities to have the catastrophic tier trigger
a special six-to-18 month voucher program administered by HUD (preferably for this
discrete purpose and not impinging on HUD Section 8) for disaster victims. This
would not be an inexpensive alternative, since it would likely be in addition to
current Section 8 vouchers and would not supplant those vouchers. Past experience
indicates, however, that it is difficult to impose such a time cap on housing
vouchers.119 But the same concerns with costs exist regarding current FEMA
temporary housing practices. The FEMA temporary housing program has been
extended for long periods, and the cost of setting up manufactured housing sites is
high and the process complicated for local governments.

The HUD approach has the benefit of tapping existing resources (local public
housing authorities) that can provide case management or other services and also
linking some victims with longer-term housing aid that they may require. This latter
linkage is also something that FEMA and HUD should arguably consider for all
major disaster declarations that result in long-term housing challenges. Some may
contend, however, that disaster housing is best administered by FEMA officials, not
individuals concerned with “long term” or permanent housing.
Another factor that might be considered as Congress weighs the housing
voucher issue is whether people unfortunate enough to be within an area declared a
major disaster by the President are entitled to more housing assistance than ordinary
citizens who have been waiting for similar help for an extended period of time. This
is another side of the equity question raised earlier. The voucher approach raises this
question of fairness, given the long waiting list for HUD vouchers in most
communities.
Incentives for Communities
The Katrina experience arguably illustrates that FEMA (or HUD) needs
specific language, with an explicit definition of community housing, to provide or
augment the basic support services that communities require when hosting a
temporary housing group site. On the other hand, Congress could consider a
definition that specifically prohibits such inducements. As the earlier discussion on
119 For more information, see CRS Report RL33173, Hurricane Katrina: Questions
Regarding the Section 8 Housing Voucher Program, by Maggie McCarty.

---

CRS-36
“Location” shows, very little assistance is offered to a community willing to absorb
a significant number of disaster victims. While debate may ensue on which option
is the better policy, there is arguably little debate that clarification of the issue would
eliminate future confusion and would speed actions during the post-disaster period.
FEMA Group Site Management Services
The required contributions by either FEMA or the state to the quality of the
temporary housing group sites could be more explicitly stated in the law to make a
clear delineation of responsibility for the provision of such supportive services. One
difficulty in such an approach is that often the affected governments are victims
themselves in the early stages of disaster recovery when these large sites are being
established. For that reason, the provision could be flexible and provide FEMA the
discretion to approach this problem on a case-by-case basis. Also, if the assumption
is that non-profits and charitable groups can provide such support, then disaster
housing polices and processes could encourage this help.
MRA Restoration
Some argue that the Mortgage and Rental Assistance (MRA) program was a
missing component in the menu of available help for disaster victims in the Katrina
response. The FHA and Fannie Mae examples (see pages 29 and 30) point to the
possible alternatives that would make the MRA provisions unnecessary. However,
these ad hoc responses were triggered by a major catastrophic event. It is unclear if
similar actions can be presumed for other presidentially declared disasters on a
smaller scale. Legislation has been introduced in the 110th Congress, S. 2386, that
would restore the program within the Stafford Act. If the program is restored, it
could be run cooperatively with FEMA by another department or agency with
expertise in this area, similar to the Department of Health and Human Services
involvement with the Crisis Counseling program or the Department of Labor’s
management of the Disaster Unemployment Assistance (DUA) program.
Regulatory Waivers
Congress could opt to provide expanded authority for agency heads to issue
automatic waivers following a catastrophic event. Such waivers of current
regulations could accelerate early response work and the eventual recovery
operations. This could involve automatic waivers or streamlining of regulations
regarding debris removal (on both public and private property), environmental and
historic preservation, and the waiver of cost-share commitments by affected state
governments.
Some of these waivers are currently employed during disasters by FEMA on
an ad hoc basis using its authority from the Stafford Act to waive certain
administrative conditions.120 The authority is used sparingly by FEMA. While this
process can be accelerated, it could be expedited if automatically triggered by a
catastrophic event. Also, the sooner regulatory waivers are decided, the faster
120 42 U.S.C. § 5141.

---

CRS-37
recovery activity can advance. However, it can be argued that an automatic trigger
also could represent a loss of program control and administrative judgment.
Cost-Share Waivers
Currently, Stafford Act Sections 406 and 407 of Public Assistance
(infrastructure repair and debris removal) can be adjusted from a 75% federal and
25% state and local cost share to a 90/10 cost-share for large-impact disasters.
These large disasters are identified by a per capita cost of over $117 per state resident
as of FY2007.121 Often, debris removal costs are waived for the opening days of a
disaster, generally for a 72 hour period chosen by the state. For Katrina, the debris
removal costs were waived indefinitely.
Congress might explore the implications of allowing Other Needs Assistance
(ONA) within Section 408 (and cost-shared by statute at 75/25) to be provided at the
same 90/10 percentage. Congress might also consider making ONA 100% federal
assistance when the actual spending for essential assistance involves many states
outside those affected by the event. Congress recently passed legislation (P.L. 110-
28), signed into law by President Bush, which accomplishes this waiver for the Gulf
Coast states affected by the Katrina disaster.122 Such changes might also be
considered for non-catastrophic disaster events.
Another possibility would be that since ONA spending is done in conjunction
with the state, the affected states and FEMA regions would continue to compile a list
of eligible items and costs that might be reimbursed through a block-grant program
administered by the state. The responsibility of administering the program could then
become the state contribution, assuming the state has retained the capacity to manage
it after a significant disaster event. This alternative might be applicable to non-
catastrophic events, too.
A cost-share serves not only as a necessary legal contribution from the state;
the investment it represents may also result in more discerning judgment and may
contribute to the quality and quantity of projects submitted for supplemental help.
The difficult challenge, under a generous cost-share, is to retain that leverage or
incentive for the responsible selection and prioritization of projects by the state to
ensure that federal objectives are achieved.
Administrative Responsibility
Another policy question is which federal agency should be primarily
responsible for catastrophic disaster housing. Should HUD run the longer term
housing/sheltering program through state and local housing authorities and non-
governmental organizations (NGOs) since it has experience with voucher programs
and ongoing relationships with those same metropolitan housing authorities and
related NGOs? While such an approach makes sense for large events spread out over
121 44 C.F.R. § 206.47.
122 P.L. 110-28, 121 Stat. 156.

---

CRS-38
many states and localities, some may contend that using the same approach on
smaller disasters may be problematic. In those instances, the management of housing
resources would be falling on the locality with the fewest resources and to the entity
(a unit of local government) that may, itself, be a disaster victim. Alternatively, HUD
does have the capacity to call on its relationships with PHAs around the country to
assist with unmet needs so a transition to HUD for the housing mission may be the
most effective approach.
On April 26, 2007, the Administration announced a plan in which FEMA and
HUD would collaborate to provide housing to Katrina victims for an additional 18
months beyond the current August 2007 deadline.123 This, coupled with previous
Katrina experience, may provide a test case for the efficacy of this approach.
Concluding Observations
The housing strategy employed following Hurricane Katrina was driven by
size, time and circumstance. While some decisions were forced by immediate needs,
others were choices made by FEMA, DHS, and the Administration. Still other
decisions were driven by choices not made, avenues not explored, perhaps due to
caution, or decisions postponed, which became tantamount to decisions themselves.
Since the Administration did not request expanded authorities, the traditional FEMA
housing programs for much smaller disasters became the default action plan of the
federal government for the largest natural disaster event in U.S. history. It can be
argued that parts of this plan worked very well, such as the rental housing provided
by hosting states. However, other parts, such as the dependence on mobile homes
and travel trailers, appear not as suitable to either the magnitude or location of this
catastrophic event.
What should disaster temporary housing be? Is it mainly a home-repair
option or a rental-assistance option (either with cash assistance or a voucher), or
should manufactured housing be presented as the only option? FEMA itself has had
a shifting emphasis over the years, much of it driven by the nature and location of
individual large disasters, which in turn has moved its policies and vehicles for
providing temporary housing on a large scale. That shifting emphasis is reflected in
the temporary housing response to Katrina. With the discovery of unsafe levels of
formaldehyde in trailers, FEMA may be shifting its approach once again. A more
definitive approach might be helpful to FEMA, its state partners, and the disaster
victims; flexibility, however, might also be needed.
Despite the very real problems encountered by victims, their communities and
their host communities, thousands of families and individuals have received a
significant amount of supplemental aid from the government for housing. At present,
the amount of funding spent on housing (both rental assistance and manufactured
123 Libby George, “Lawmakers Applaud White House Plan on Long-Term Housing Aid,”
C Q H o m e l a n d S e c u r i t y , A p r i l 2 6 , 2 0 0 7 , a t [ h t t p :
//homeland.cq.com/hs/display.do?docid=2499045&sourcetype=6&binderName=news-all].

---

CRS-39
housing) for the Gulf Coast hurricane season of 2005 stands at over $10 billion.124
FEMA and other staff at federal, state, local, and voluntary agencies struggled to
address an unprecedented event. There have been many challenges along the way,
perhaps most importantly, the difficulty in communicating complicated housing
policy decisions to a vast and dispersed population.
Many of the staff involved, both in the governmental and non-governmental
sectors, at all levels, provided assistance through the temporary housing programs
and administrative channels that existed. Those programs were severely challenged
by a disaster of unprecedented size, compounded by unique problems of devastation
and mass evacuations. New partnerships were established and a significant level of
federal resources were provided, if not always judiciously employed. Programs that
can work well for a “garden variety” disaster may not be appropriate for a
catastrophic event. Assumptions based on the average can be overwhelmed by the
exceptional. For an event such as Katrina, new approaches were apparently
considered but often rejected in favor of the familiar. This is understandable given
the propensity to avoid establishing precedent based on an outlier event, and the body
of law and regulations and policies supporting current housing practices. However,
effective leadership, and carefully drawn legislation, can help to distinguish between
the extraordinary and the common events and respond appropriately.
Even now, long after Katrina’s landfall in August of 2005, Congress
continues to debate long-term recovery roles among federal agencies and state
governments that are still uncertain but clearly consequential. Congress could opt
to consider the lessons of this disaster in terms not only of program adjustments and
corrections, but also the appropriate governmental role throughout the recovery
process for any possible future events of this magnitude.
124 U.S. Department of Homeland Security, Federal Emergency Management Agency,
Congressional Monthly Report, May 4, 2007, p. 10.

---

CRS-40
Appendix A. HUD and
Other Federal Housing Resources

While FEMA has the principal responsibility for temporary housing following
a Presidentially declared disaster, the Department of Housing and Urban
Development and other federal departments and agencies also played a prominent
role in the post-Katrina housing mission. Information about the involvement of HUD
and other federal partners in providing housing aid; along with the size and extent of
their mission in the disaster housing arena, follows.
KDHAP and HUD Assistance
This was the Katrina Disaster Housing Assistance Program paid for by FEMA
(from the Disaster Relief Fund) but managed by HUD through an inter-agency
agreement. Under this program, HUD assisted those citizens who had previously
received HUD housing assistance at the time of the disaster. The cooperation
between FEMA and HUD has been inconsistent throughout the process. As a result,
Congress eventually transferred the funding to HUD for this purpose. It was at this
point that HUD renamed the program the Disaster Voucher Program (DVP replacing
KDHAP). Regardless of the acronym employed, the HUD-assisted program appears
to have reached its targeted population.125 Further cooperation and information
sharing between FEMA and HUD (and other federal agencies) might contribute to
applicants being aware of all housing options and also lessen each program’s
susceptibility to fraud.
There have been frequent references to HUD Section 8 housing vouchers as
a solution for the Katrina evacuees. The response to the Northridge earthquake in
2004 is usually listed as a prime example of the efficiency of this approach.126
FEMA provided over $140 million in immediate housing help in the form of funds
for applicants to rent alternative living spaces (three months to homeowners and two
months to renters) to more than 47,000 households.127 One consideration is whether
such vouchers should be limited as disaster housing assistance is (generally 18
months), or if they should continue to be renewed in the manner of regular Section
8 vouchers.
For the Katrina disaster, unlike some other disasters, HUD’s help was focused
on assisting its own population of clients that had been displaced by the disaster. As
noted earlier, the Disaster Voucher Program is the successor to KDHAP (though,
unlike KDHAP it also provides help to Hurricane Rita victims, explaining the more
125 For more information, see CRS Report RS22358, The Role of HUD Housing Programs
in Response to Hurricane Katrina, by Maggie McCarty, Libby Perl, Bruce Foote, and
Eugene Boyd.
126 “Housing Katrina’s victims,” The International Herald Tribune, September 24, 2005, at
[http://www. Iht.com/articles/2005/09/23 opinion/edhouse.php].
127 Government Accountability Office (GAO) Report - Disaster Assistance - Guidance
Needed for FEMA’s Fast Track Housing Assistance Process, October, 1997, at
[http://www.gao.gov/archive/1998/rc98001.pdf].

---

CRS-41
generic title) and helps Hurricanes Katrina and Rita victims maintain housing over
a longer term. The DVP vouchers are administered by local Public Housing
Authorities (PHAs), which were granted a degree of discretion in their use and in
defining the coverage of expenses. Congress provided $390 million for this program;
it is projected to conclude on September 30, 2007.128 Given the announcement on
April 26, 2007, of a proposed extension of FEMA housing help and a transfer to
HUD, these dates may be adjusted depending on the reaction of Congress to that
plan.
The creation of the Disaster Housing Assistance Program (DHAP), which was
announced in April of 2007 and took effect in November of that year, constituted
HUD involvement in long-term disaster housing that had been urged by some from
the onset of the Katrina disaster. HUD assumed management of the housing rental
program, while FEMA maintained management of the manufactured housing
(trailers, mobile homes) program. When the program was announced, official
statements emphasized the assistance that would be available to bring closure to the
program. One of the actions detailed in the announcement of DHAP stated that
“Families and individuals in both the rental and trailer/mobile home programs will
be given complete information, supportive services, resources and ample time to
prepare themselves for the end of temporary, subsidized housing.”129 The DHAP
housing program is scheduled to end in March of 2009.
In addition to its other programs, HUD, along with other federal entities,
provided housing assistance in the form of their own inventories of housing stock.
In addition to HUD, other federal entities providing available housing included the
Department of Agriculture, the Department of Veterans Affairs, and Fannie Mae.
This assistance was also provided through inter-agency agreements. Some of the
houses made available were immediately helpful, while others were in areas too
remote to benefit the disaster victims. That is a central consideration when assessing
housing resources for disaster victims interested in being close to home or at least
close to new employment and educational opportunities. FEMA has been tasked by
P.L. 109-295 to convene a group to devise a National Housing Strategy. This will
include HUD and the other federal players, as well as other parties with experience
in the disaster housing arena.130 Congress still awaits that report.
While chartered by Congress, the Federal National Mortgage Association
(Fannie Mae) is a private, shareholder-owned company. Given that special status131
and a mission to increase the prospect of home ownership for low and moderate
income families, Fannie Mae’s contributions following Katrina have been significant.
128 For more information, see CRS Report RL33173, Hurricane Katrina: Questions
Regarding the Section 8 Housing Voucher Program, by Maggie McCarty.
129 Ibid.
130 120 Stat. 1446.
131 For a discussion of the “quasi-governmental” organizations, see CRS Report RL30533,
The Quasi Government: Hybrid Organizations with Both Government and Private Sector
Legal Characteristics, by Kevin R. Kosar.

---

CRS-42
The company made some of its properties available for rent-leasing for up to 18
months for Katrina victims. In all, Fannie Mae provided:
1,500 single-family properties from its inventory of Real Estate Owned
(REO) for temporary housing for individuals and families displaced by
hurricane Katrina. Nearly 4,600 evacuees have been provided temporary
housing at no cost through the company’s initiative. ... Today, Katrina
evacuees are living rent-free in Fannie Mae-owned properties in 20
different states. ...[Fannie Mae] is also making $15,000 available for down
payment and closing cost assistance for qualified evacuee families who
wish to purchase any Fannie Mae-owned home any time during their rent-
free lease period. To date, 80 families have taken advantage of the
assistance and purchased the Fannie Mae-owned properties.132
1 3 2 F a n n i e M a e N e w s R e l e a s e , M a y 3 , 2 0 0 7 , a t
[http://www.fanniemae.com/newsreleases/2007/3996.jhtml?p=Media&s=News+Releases]..

---

CRS-43
Appendix B. Victims Without Homes:
The Loma Prieta Earthquake and Hurricane Andrew
Loma Prieta Earthquake
Following the Loma Prieta earthquake in the autumn of 1989, FEMA
administered a large temporary housing program. FEMA asked for proof of
residency before providing assistance and required that an applicant live at least 30
days at one address to be eligible for assistance. Due to the unique nature of the Bay
Area’s low income population, many of the applicants had lived in Single Residency
Occupancy (SROs) apartments that were similar to YMCAs. Due to the force of the
earthquake, approximately 2,200 of these rooms had been lost. Oftentimes the
applicants had stayed in these rooms for fewer than 30 consecutive days. For this
reason, FEMA judged them to be ineligible for temporary housing assistance.

The Legal Aid Society of Alameda County sued FEMA over its interpretation
of eligibility and prevailed in court. The plaintiffs realized that temporary housing,
as defined under Section 408, would not help the applicants because they no longer
had SRO rooms available to them. They also realized that the private property owners
of the buildings might not be interested in remaining in the SRO business. Instead the
settlement was for financial resources to help restore that part of the housing stock.
The eventual settlement was for
$23 million to fund 2,200 SRO units. The settlement sum was arrived at by
multiplying the number of SRO units lost by a unit cost of about $10,500.
The flexibility of the final settlement was ideal from the point of view of
the local agencies, because the funds were provided in a block grant fashion
to the counties and as such allowed them the freedom to decide how to put
the money to best use, with very few restrictions. Overall, 1,200 to 1,500
units were actually rebuilt using lawsuit funds.133
Since FEMA funds could not be provided to private developers, the local
governments arranged for the sale of the buildings to non-profit groups, sometimes
using Community Development Block Grant funds to complete the projects.134
Hurricane Andrew
In the aftermath of Hurricane Andrew in 1992, FEMA had a very large
temporary housing program in south Florida. Here, too, many people in the area
when the hurricane struck were judged not to be eligible for FEMA temporary
housing assistance because they could not prove previous residency through rental
agreements. However, in this instance FEMA found a way to work with the local
community and contribute to the solutions.
133 Mary C. Comerio, Housing Repair and Reconstruction After Loma Prieta.
134 Ibid.

---

CRS-44
The [Dade]County Manager’s Office of Homelessness working “in
conjunction with Catholic Community Services first attacked the homeless
family problem by establishing a tent city. This comprehensive approach
included day care, job counseling, and mental health assistance.
Unfortunately, the tent city proved too vulnerable to bad weather and had
to be closed. Subsequently, through a coalition of homeless providers and
the County, a plan for expanding shelter bed availability was approved.
Local agencies involved in hurricane response have received FEMA funds
to continue their expanded services and to initiate new projects to address
post-Andrew needs.”135

135 Gigi Laudisio, “Disaster Aftermath: Redefining Response — Hurricane Andrew’s
Impact On I&R Switchboard of Miami, Florida,” at [http://www.airs.org/documents/AIRS-
Hurricane Andrew.doc].

---