Katrina victims get more federal money for housing

Ending a bitter dispute over rebuilding priorities after Hurricane Katrina, Mississippi Gov. Haley Barbour and Housing and Urban Development Secretary Shaun Donovan announced Monday that they would make available $132 million in federal funds to help poor residents whose homes remained damaged.

The Mississippi Center for Justice, a housing advocacy group, estimates that there are still at least 5,000 storm-battered homes statewide, even though Mississippi, as of June, had spent about $3.5 billion of the $5.4 billion of the Katrina recovery money appropriated by Congress.

One problem is that residents had been prohibited from receiving rebuilding money if their homes were damaged by wind in the August 2005 storm, said Reilly Morse, a senior attorney for the advocacy group. Along the Mississippi Gulf Coast, he noted, many working-class people lived north of an east-west railroad bed that provided a kind of levee protection against the massive storm surge. But they were not spared by the wind.

Among other things, the effort will make wind-damaged homes eligible for up to $75,000 in repair money.

“Until now, those who suffered wind damage were left without any remedy,” lawyer Larry Schoen said. “They can now finally receive the funds they so desperately need.”

Schoen, with the Boston-based Mintz Levin law firm, and Morse were among attorneys who brought a 2008 federal lawsuit challenging another aspect of rebuilding policy: a decision by Barbour to use $570 million in recovery money to fund an expansion of the state port at Gulfport.

Mississippi officials said the expansion could help with post-storm recovery by creating 1,300 jobs. Critics, including then-HUD Secretary Alphonso Jackson, feared the state was overlooking what Jackson called “more pressing recovery needs.”

With Monday’s announcement of the new housing funds, the plaintiffs, including the state NAACP, have moved to dismiss the case, which is pending in federal appeals court in Washington.

The money for the initiative will come from reshuffling funds for other projects planned with federal recovery dollars, said Lee Youngblood, spokesman for the Mississippi Development Authority.

The $570 million in port expansion funds will remain intact, except for up to $40 million that might be used if an outreach effort across nine counties finds additional homes that require repair.

The money also will help some residents move into “Mississippi cottages” — tiny, prefabricated houses that were touted as a solution to the state’s post-storm housing crisis. (Efforts to place the cottages have been stymied by local zoning ordinances.) Other money will be used to help renters get into undamaged homes.

Morse said HUD helped broker the agreement among the parties.

Politics beyond Mississippi may have also played a role: On Saturday, the Jackson Clarion-Ledger, citing an interview with Barbour’s nephew, reported that the governor was giving “serious thought” to a White House bid in 2012.

richard.fausset@latimes.com