Pact Disclosed on Funding for Quake-Damaged Housing

Lawyers for poor people in three counties displaced by last year’s earthquake said Thursday they had reached a final settlement with federal officials to provide nearly $25 million for 2,070 housing units.

A somewhat similar agreement announced last February was quickly disavowed by the Federal Emergency Management Agency, which rejected Legal Aid lawyers’ interpretation of the agency’s duty to build or renovate low-cost residential hotels. A federal judge sided with Legal Aid, but FEMA raised other objections and provided no funds.

On Thursday, lawyers for the low-income residents said a settlement was reached and approved by FEMA, high-level Justice Department officials and U.S. District Judge Eugene Lynch.

“We are confident they will not renege,” said Morgan Gilhuly, a volunteer San Francisco lawyer who joined Legal Aid attorneys at a news conference. “This is a good deal for FEMA and a good deal for people who lost their housing.”

Assistant U.S. Atty. George Stoll said the agreement was binding and should provide funding very quickly.

The settlement covers San Francisco, Santa Cruz and Alameda counties and is to be distributed according to each county’s proportionate losses in low-income housing units from the Oct. 17, 1989, quake: $5.5 million for San Francisco, $5.9 million for Santa Cruz County, and $11.6 million for Alameda County. FEMA has also agreed to pay almost $2 million for additional residential hotels in Alameda County, said Stephen Ronfeldt of the Legal Aid Society of Alameda County.

The money will be paid to the counties, which will decide how much to spend on residential hotels, shelters, service centers and rent-subsidy vouchers.

San Francisco planning official Carla Javits said the city would use most of its money to renovate two centers providing 425 beds and a variety of services to the homeless.

Alameda County, which lost more than 1,100 residential hotel units, will use some of its money for reconstruction and some for a newly designed housing voucher program, said Rae Mary of the county’s Office of Community Development. Santa Cruz County has similar plans, Ronfeldt said.

Ronfeldt said he could not estimate how many people had occupied the 2,070 lost housing units. He said some are still homeless, and the whereabouts of some are unknown. Those who were displaced will have first priority for the housing funds, he said.

FEMA is required to pay 75% of the settlement funds. Ronfeldt said the state is committed to paying the rest, but it also has asked the federal government for a waiver of its share, which would shift the cost to FEMA.

A Justice Department lawyer had estimated that the earlier settlement would cost FEMA $50 million, though no amount was specified in the settlement documents. Gilhuly said he believed the earlier agreement would have produced much less money than the settlement announced Thursday.