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Tenants feel pinch in shift from FEMA

Section: Business

David Hammer

For months, the federal housing agency has promised a "seamless transition" in taking over a post-Katrina rental assistance program from FEMA, saying it has the housing experts and the authority to extend aid until March 2009.

The transfer from FEMA to the U.S. Department of Housing and Urban Development officially takes place today. But HUD never expected two rough spots in the transfer: Faulty data has prevented the housing agency from finding about a quarter of the tenants in Orleans and St. Bernard parishes, and some landlords who participated in the FEMA program don't want to work with HUD, with some of those not letting their tenants out of existing leases.

Housing advocates and landlord groups wanted HUD to take over administration of the program quickly after the storm, and many expect the HUD-run, FEMA-paid effort to manage tenants' cases better. FEMA had already extended its management of the program several times. The HUD program is also designed to return the tenants to self-sufficiency; starting in March 2008, they will be responsible for $50 of the monthly rent, increasing by $50 a month until assistance stops a year later.

The FEMA rental assistance program began shortly after the storm with 250,000 families and has whittled down to 28,572 displaced by Hurricanes Katrina and Rita, most of whom are now staying in east Texas. HUD says about 6,400 families are receiving the FEMA assistance in Orleans, Jefferson and St. Bernard parishes.

There are 1,246 landlords in New Orleans who participated in the FEMA program and will continue under HUD. But 73 have decided to opt out, said HUD spokeswoman Donna White.

Data exchange

The management transfer from FEMA to HUD's Disaster Housing Assistance Program, or D-HAP, requires a massive exchange of data so local housing authorities and their contracted case workers can meet with every assisted family. But the D-HAP case managers haven't been able to find 1,500 of the New Orleans-area tenants, said Kenneth Bibbins, director of a case-management team at Odyssey House.

"We're trying to put cement in cracks," Bibbins said.

Of 4,300 current FEMA tenants in Orleans and St. Bernard parishes, D-HAP officials couldn't find more than 1,000 last month, according to HUD data. Odyssey House case workers have been able to pare that to more than 800, using a team of 70 case managers going door-to-door, caseworkers said.

Of the 2,200 families receiving FEMA rental assistance in Jefferson Parish, 700 hadn't been found by this week, White said.

HUD acknowledges that part of the problem stemmed from problems in the tenant data it got from FEMA, but White wouldn't go into specifics.

"It's the data we have, and that's what we're working with," she said, simply.

Landlord resistance

Odyssey House is also struggling to deal with tenants suddenly put out by landlords who participated in the FEMA program but don't want HUD's rules.

"They're concerned, because they have to sign an addendum to the lease saying that they won't put out tenants if they don't pay their portion," Bibbins said.

One tenant, an elderly woman, was notified on Nov. 14 that she had to be out by Dec. 1 because her landlord didn't want to participate in D-HAP. FEMA's contracted manager, Corporate Lodging Consultants Inc., is going to make the bridge payment to her landlord for December, he said, but she will have to move by Jan. 1.

The HUD contract with landlords supersedes tenants' leases and gives D-HAP inspectors the right to check on the properties.

That was too onerous for Michael Myer, who rented six apartments Uptown to families in the FEMA-Corporate Lodging program.

"I don't understand why they changed it to HUD," he said. "Under Corporate Lodging, all I needed to do was report my earnings to the IRS. They sent me a check every month and it worked great."

But FEMA and Corporate Lodging didn't do spot inspections or require owners to provide specific maintenance and utilities service, as HUD does. And for Myer, the new HUD contract looked too much like HUD's Section 8 housing agreement, which he said he tried two decades ago and didn't like.

Donald Vallee, president of the New Orleans Landlord Association, a group of 3,600 Section 8 landlords, said his group's members don't want to deal with another government program.

"The market itself has so much demand in it that the landlords don't have to deal with the federal bureaucracy, oversight and regulations," Vallee said.

HUD regulations

The losers are the tenants who had been promised that the transfer wouldn't hurt them. Bernice Kettenring, 83, is trying to rebuild her home in New Orleans while getting rental assistance to cover her $850-a-month rent at Gatehouse Apartments in Metairie.

FEMA, and later Corporate Lodging, have taken care of Kettenring's rent so far, and she has enjoyed her time at Gatehouse, said Kettenring's daughter, Denise Smith.

"These elderly people don't want to move again; they've been through enough," Smith said. "And the landlords don't need to let them out of their leases; HUD should be paying their rent, period."

Gatehouse was prepared to transfer about 20 families participating in the FEMA program into the HUD program; the tenants even met with HUD case-workers.

But then, Smith said, Gatehouse officials read the new contract with HUD, which requires compliance with HUD's Housing Quality Standards and forbids eviction of the tenants if HUD withholds rent payments for violations of the standards. Gatehouse sent a letter to the tenants notifying them that it wouldn't participate in the program once HUD takes over, but their existing leases would remain in force.

Kettenring's lease runs through March. Luckily, she can afford it with her fixed income and she doesn't want to move, Smith said.

Milan Ozdinec, HUD deputy assistant secretary for public housing and voucher programs, said he hopes landlords who opt out of the program won't penalize tenants if they want to break their leases so they can find a landlord who will accept the HUD assistance.

Gatehouse management referred questions to Mike Campbell, who did not return calls seeking comment.

Laura Tuggle, managing attorney of the housing law unit at New Orleans Legal Assistance, which is advocating for tenants under D-HAP, said HUD is only seeking basic, safe accommodations, and landlords who opt out are being unreasonable.

"They don't want any inspections, and some of them don't want to deal with the HUD paperwork," Tuggle said. "It was so easy to get that Corporate Lodging money because nobody checked up on anything."

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