Consumer Action :: Discrimination charged in post-Katrina housing lawsuit

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Published: November 2008

Discrimination charged in post-Katrina housing lawsuit

Civil rights and fair housing groups filed a federal lawsuit against the U.S. Department of Housing & Urban Development and the Louisiana Recovery Authority alleging that the Road Home, Louisiana's Hurricane Katrina recovery program, discriminated against African-American homeowners in New Orleans.

Below is a summarized excerpt of a press release about the lawsuit:

The Road Home, an $11 billion federally-funded program, is the largest housing redevelopment program in U.S. history. The suit is being filed in the U.S. District Court for the District of Columbia on behalf of five individuals representing a class of more than 20,000 African-American homeowners and two fair housing organizations, the Greater New Orleans Fair Housing Action Center and the National Fair Housing Alliance.

"Forty years after the passage of the federal Fair Housing Act, residential segregation still permeates New Orleans," said James Perry, executive director of the Greater New Orleans Fair Housing Action Center. "Homes in communities of color still have lower values than those in white communities even when the condition, style and quality of the homes are comparable. Louisiana's program builds on this history of discrimination. Only when housing opportunities are created for all residents of New Orleans will our recovery truly be successful."

The discrimination, in this case, is the result of the formula used to determine Road Home grants. Grant awards are based on the lower of two-values: the pre-storm value of the home, or the cost of damage. Home values in most predominantly African-American neighborhoods are lower than the values of similar homes in white neighborhoods. As a result, the grants for African-American homeowners are more likely to be based upon the pre-storm value of their homes, leaving them without enough money to rebuild. In contrast, white homeowners are more likely to receive grants based on the actual cost of repairs.