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Introduction

• We need to recommend approaches that would not only restore what was lost but make New Orleans “better than ever.”
  
  
• Merely identifying the problems and suggesting solutions is not enough.
  
  
• Name the problems but also suggest paths of implementation and accountability. Alongside each resource to be tapped are individuals or organizations that should be held responsible for achieving the goals.
  
  
• We would find it unconscionable if our hopes are unrealized because our leaders failed to make the hard choices and commit the full resources necessary to move from great ideas to meaningful action.
  
  
• Everything is connected. An emergency like Hurricane Katrina peels away delusions of independence.
  
  
• It’s time for collaboration and, where practical, consolidation of services.
  
  
• Thanks to this aid package, homeowners who qualify will have the money to rebuild. Schools will have money for operations during a period of lower ad valorem taxes. Infrastructure needs, including roads, hospitals, and sewer systems can be addressed.
  
  
• We have learned through this ordeal that we have friends everywhere. But their empathy and even their aid are not enough. Ultimately, we must rescue ourselves.
  
  
• We have the resources we need within our grasp – or within reach, with help from allies in the nonprofit, government, and private sectors. The question is: Do we have the will?
  
  

Policy Recommendations

• Guiding Principles for Rebuilding New Orleans
  
  
  • Future City Planning – Town centers, neighborhoods, and the streets that connect them should encourage walking and should provide essential services (food stores, pharmacies, entertainment, schools, and public services) within a five-minute walking distance.
    
    
  • Economic Vitality – Actions should reflect the need to rebuild and sustain a diverse, vibrant economy. As with all principles, building a strong economy should complement, rather than contradict others listed below.
    
    
  • Protect Environmental Quality - Disaster-recovery policies and reconstruction practices should respect how decisions enhance or degrade environmental quality. Preserving natural systems, such as wetlands and barrier islands, which are often located in known high-hazard areas, provides an additional benefit of protecting adjacent property from flooding and coastal storm surge.

Like it or not, New Orleans is closer to the Gulf of Mexico than it used to be. We must rebuild the natural defenses that nature gave us and take advantage of those created by man that may have been overlooked.

• Promote Social and Intergenerational Equity – Improve social conditions to include assisting the most socially vulnerable populations and taking actions that enable future generations to live, work, and play in a place that is better than the conditions of the past.
  
  
• Maintain and Enhance a High Quality of Life – Recovery and reconstruction activities should improve the way in which people live, work, and play. Specific factors include: enhanced recreational, health care, educational, and employment opportunities.
  
  
• Institutionalizing Hazard Resilience – Identify and implement a comprehensive strategy that protects lives and property from the damaging effects of natural hazards. Actions may include land use, codes, public education, and the hardening, retrofitting, or relocation of at-risk structures.
  
  
• Aesthetics and Historic Preservation – Encourage the preservation of historic structures and sites as practical and consider the reconstruction of structures in a way that captures the historic vernacular and local community aesthetic.
  
  
• Public Participation – Incorporate public participation practices into recovery decision-making processes. Participatory actions may include, but are not limited to, public education, participatory planning, notifying people of relevant issues, policies and funding opportunities, referenda, representative policymaking, open meetings, and hearings.
  
  

Beginning a Comeback

• The most important step in reducing the “FUD Factor” (Fear, Uncertainty and Doubt) among the investment community is restarting tourism with a successful Mardi Gras and Jazz Fest.
  
  
• Principles to guide tourism’s future:
  
  
  • Maintain a sense of place – based on natural, cultural, and historic factors contributing to a sense of place – local and regional cuisine, music and art, festivals and lifestyle.
    
    
  • Share the Katrina Experience – for the next year or two, “voluntourists” coming to New Orleans to aid the recovery will also be a major source of tourism.
    
    
  • Historic/Cultural Preservation – the initial inventory indicates that more than 1,000 historic structures – both publicly and privately owned – were damaged or destroyed by the storm. Due to lack of funds to rebuild and protracted insurance negotiations, many of the damaged historical and cultural structures are standing unattended. This must not continue.
    

Affordable Housing

• Recommendation 1: Modular-Permanent Housing Pilot on a Site Currently Being Used for Transitional Housing.
  

This pilot involves the development of modular, permanent housing on a site that is currently being used for temporary housing. It serves two purposes, the first of which is to identify transitional housing sites that may be appropriate for permanent affordable housing. Given that money is being spent to lay infrastructure in these transitional sites, it seems wasteful to just remove it when the transitional housing is no longer needed. Along these lines, the pilot would be used to help identify appropriate criteria for identifying candidate sites and develop processes for making the transition from temporary to permanent housing, with set-asides for affordable housing. The other purpose of the pilot would be to show how modular housing technologies can be used to develop affordable, attractive, and efficient housing.

• Recommendation 2: Modular Housing Codes
  

New modular and panelized housing technologies can be used to create homes that are attractive, safe, and affordable. To leverage these potential advantages, cities and parishes should consider reviewing their building codes to make sure these technologies are permissible within their jurisdictions. It also may be appropriate to reduce permitting and inspection fees for such housing, since the burden on inspectors should be substantially less. Note that this may present an opportunity for economic development, since modular housing factories could be created in any community that requires significant levels of rebuilding. Cities and parishes should be responsible for this action. State level entities or nonprofit organizations concerned with affordable and efficient housing, may be able to provide assistance with sample code structures that serve this end.

Implementation should occur in the near term, ideally within three to six months, such that developers can consider modular housing among the possible options as they begin to rebuild. This recommendation will result in small administrative costs on the part of cities and parishes as they take time to research and update their codes.

• Recommendation 3: Hurricane Stress Mortgages
  

Existing mortgage programs will serve some, but not all, residents. Insurance settlements can be held pending FEMA resolutions, which have taken as long as 36 months in past disasters, and SBA programs may not cover the full replacement or repair costs. Consequently, it will be important to develop programs which address population segments with known difficulties in recovering their pre-Katrina housing situation: elderly homeowners that experienced severe loss, homeowners with mortgages whose settlements and current income do not leave them with enough resources to rebuild without filing bankruptcy, and individuals whose credit is too poor to allow them to qualify for SBA funding.

Many low-income homeowners are likely to be uninsured or underinsured, while renters generally have limited cash for down payments. In addition, borrowers will face difficulty meeting traditional mortgage criteria due to hurricane-related issues such as unsettled insurance claims on existing mortgages or late payments due to income disruption. Even people with strong credit may lose their homes due to the inability simultaneously to pay for an existing mortgage on a damaged property, for temporary housing, and for rebuilding costs to either replace or repair damaged property. The flooding caused by the hurricanes in non-flood zones, where flood insurance was almost nonexistent, has only exacerbated problems. Non-predatory mortgage products with flexible underwriting features, which take into account a borrower’s pre-hurricane credit history and factor in other effects of the disaster, will be needed to ensure that low-income individuals and families participate in the long-term recovery of their communities. These products could be used by those facing mortgage defaults or foreclosure, or by those who have no other means to purchase a home.

For this recommendation, we need to establish a mortgage program that works with local banks, mortgage companies and brokers. The mortgage products provide flexibility for residents displaced by Katrina. As additional flexibility is needed, the state along with other housing agencies should work together to suggest changes to the secondary markets. If necessary, the state may offer to act as an additional guarantor for such mortgages. This recommendation should be implemented within 6 to 12 months to assist residents as they transition from temporary to permanent housing. There is very little cost associated with this proposal, primarily administrative costs on the part of lending institutions. The most important factor is the willingness of mortgage brokers to revisit their risk analysis accounting procedures to consider extenuating circumstances in the aftermath of Hurricane Katrina.

• Recommendation 4: Section 8 Voucher Opportunities
  

Using FEMA payments combined with HUD rental vouchers and other subsidy funds, Hurricane Katrina has provided an opportunity for Section 8 voucher holders to become homeowners. Steps should be taken by local housing authorities, acting in concert with “New Statewide Community Development Entity,” to explain the process of qualifying for a mortgage loan to their voucher holders. Those who qualify would be able to purchase a home with minimal down payment and in many cases could own a home for the same monthly cost as their rental payment.

• Recommendation 5: Employer-based Housing Assistance
  

Though employers do not have legal responsibility to assist their employees with affordable housing options, in many circumstances it may be in their best interest to do so. This is especially true for post-Katrina New Orleans, where lack of affordable housing may severely curtail the available labor pool as businesses attempt to rebuild. Per this recommendation, the state should (a) help educate businesses on the advantages of providing financial assistance to support affordable housing, and (b) create the appropriate institutional mechanisms to funnel corporate housing assistance in the most efficient manner.

• Recommendation 6: Community Land Trusts
  

This recommendation involves the use of public and private funds to create nonprofit community land trusts (CLTs) that would maintain land for affordable housing. A CLT is a nonprofit entity that would own the land but not the buildings on the land. Individual residents own the buildings, have a long-term lease on the land, and act as members of the trust. The compelling advantage for CLTs is to ensure that even if surrounding land values rise, homes within the trust will remain affordable. This can be achieved, for example, by structuring the charter of the CLT such that the appreciation of individual home values cannot exceed the rate of inflation. Possible mechanisms for assembling CLTs would include land purchases, transferable development rights, land swaps, or eminent domain. The Commission makes a similar recommendation in the section on Land Use. Local governments would work with housing advocacy groups to set up nonprofit community land trust entities. If necessary, the state could provide enabling legislation to govern various facets of the CLT institutional structure. This recommendation should be pursued in three to six months such that development decisions and land assembly activities can commence. Assembling land trusts will be relatively costly. Likely funding sources include federal agencies such as HUD, the state, local governments, NGOs, developers, and local businesses interested in assisting with housing for their low-income work force.

• Recommendation 7: Create a Combined Fannie Mae Mortgage Product
  

Fannie Mae currently offers energy-efficient mortgages under one program, and location-efficient mortgages under a separate trial program. Location-efficient mortgages are based on the idea that if one lives within a walkable neighborhood, or close to transit, then one does not necessarily need a car and can afford to spend a higher portion of income on housing. We request that Fannie Mae combine these mortgage programs, along with a housing durability component, into a single housing efficiency mortgage product. Based on reducing the overall lifecycle cost of a home, this program could be designated as an experimental Katrina Recovery Mortgage. If a home is built to enhanced standards of durability, energy efficiency, water efficiency, and location efficiency, then homeowners would qualify for this product. Additionally, in contrast to Fannie Mae’s existing products, this program should qualify homeowners for a lower interest rate, as opposed to a larger loan.

• Recommendation 8: Innovative Insurance Programs
  

As insurance companies take stock of their operations in New Orleans, they should be encouraged to reduce their risk premiums for housing that exceeds basic water and wind safety codes. To the extent that additional safety measures reduce the risk of damage in the case of severe weather events, those savings should be passed along to homeowners. This, too, should help make housing more affordable and create greater incentives for developers to exceed basic codes. The federal flood insurance program already includes reductions for basic safety features, but perhaps the insurance premium reductions should be even larger to provide more incentives for additional safety strategies.

• Recommendation 9: Future Property Tax Rebates for Efficient Housing
  

With location- and resource-efficient housing, local governments over time will spend less on utilities and infrastructure such as roads or sewer lines. For this reason, they should be able to offer reduced property taxes on unites that are located in high-density mixed-use neighborhoods, are located near transit, or use energy and water at high levels of efficiency. Unfortunately, with the existing loss of the property tax base, there is no reasonable way for local governments to offer such tax breaks at the present time. On the other hand, as rebuilding occurs and the local tax bases are restored, it should be possible to offer future tax breaks, perhaps after 2008. Local governments should offer lower property tax rates after 2008 for all homes that reduce their needs for infrastructure.

• Recommendation 10: Direct Public Subsidies
  

The state and/or federal government also should consider directly subsidizing housing improvements designed to make affordable homes even more affordable by reducing energy and water expenses, maintenance costs, and transportation costs. The government could pay the difference in the cost for homes that are built to higher standards, for example, or offer no-interest loans for the upgraded portion of the housing price. Federal agencies such as HUD, EPA, or DOE and/or state agencies would need to establish this program within six months so that they could influence building design decisions as they are made. The costs likely would be high, and would be borne by federal or state agencies responsible for the programs.

• Recommendation 11: Enhanced Building Inspections Capacity
  

Because the number of housing units that need to be rebuilt over a short time span far exceeds the prior level of construction efforts within the city, it will be necessary to create an improved capacity for building code officials in New Orleans. Possible responses include the creation of a “lend an official” program over the short term along with securing funding to hire and train new officials over the longer term. These steps may require efforts on the part of the state as well as local governments. Federal agencies such as HUD or FEMA, as well as CDBG funds, may provide funding assistance, while the National Institute of Standards and Technology is a likely source for technical assistance.

These efforts should be ramped up within three to six months so as to keep pace with rebuilding requirements. It will require a moderate level of funding. Considering the decimated state of local government budgets, state or federal agencies appear to be the most likely source of needed funds.

• Recommendation 12: New Greater New Orleans Parishes Regional Planning Agency
  

To ensure planning issues associated with housing, transportation and other infrastructure are considered jointly, the Governor’s Commission advocates the creation of a regional planning authority spanning the parishes most affected by Katrina. This could be formed in one of two ways. First, the existing Regional Planning Commission (RPC) could be expanded to include housing and other infrastructure in addition to transportation and to cover all parishes. Second, a new regional planning authority could be created and subsume the current role of RPC. The planning agency would be created by the state, working in concert with the city and parish governments in the affected area. While this recommendation is not as urgent as others, it should be addressed within 12 to 18 months. The state must determine the long-term source of funding for the organization. Possible sources include federal funds, state funds, or specially earmarked local sales taxes.

Disaster Planning

• Plan should include the following:
  
  
  • A Unified Communications System – This would connect all health care providers, state and local agencies, the law enforcement community, first responders, and NGOs who commit to the investment.
    
    
  • Special Needs Shelters – When a disaster is imminent, special needs shelters for oxygen-dependent, dialysis, and non-hospitalized patients who require ongoing care should be identified in every parish. A written plan for these shelters should specify locations, management, staffing, security, and eligibility. The plan also should specifically address shelters for mental health patients who are being treated in outpatient programs.
    
    
  • Non-Governmental Organizations
    
    
    • Recommendations:
      
      
      • Greater Representation in Recovery Planning – Without a donors’ forum, local NGOs find it difficult to have a common voice and, therefore, have not been fully integrated in recovery discussions. The Commission recommends that the governor or other designated state or local official appoint a member of the nonprofit community to serve on future committees or commissions tasked with long-term recovery.
        
        
      • A Nonprofit Clearinghouse – The entity, the New Orleans Non-Profit Clearinghouse, should be the cornerstone institution providing business and professional development and key links with national organizations, such as the National Center for Philanthropy, for grant research. The Clearinghouse should be the central communications point among NGOs during disasters and an information clearinghouse in recovery. The entity also may provide grant search resources and temporary working office space for NGOs.
        
        

Conclusion

• Undoubtedly, the havoc and destruction wrought by Hurricane Katrina are unlike anything heretofore seen in American history. Solutions and the recommendations therefore must be on a like scale. Some of the recommendations contained here are innovative, but we believe that to truly have a New Orleans that is stronger than before will require that new ground be broken and new thinking employed to create new housing solutions that recognize and address the importance of housing to the economy of South Louisiana and the state.

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