Policy Update
Hurricane Katrina Impact on Housing Industry
9/02/2005
Source: Housing Finance
After Hurricane Katrina: Apartment owners asked for help, offered resources. How can you help?
Provide housing: The National Multi Housing Council has guidance for apartment owners able to provide housing for displaced residents. Go to http://www.nmhc.org/Content/ServeContent.cfm?ContentItemID=3532
Can you house displaced seniors? Mississippi Methodist Senior Services has an immediate need to place about 60 seniors whose retirement buildings in Mississippi were damaged; the group has another 200 seniors who have already been evacuated but who need permanent or long-term housing. If you have vacant units and can help, contact Natalie Cochran at ncochran@umssm.org or 662-844-8977.
Donate: For a list of major relief organizations, see this Federal Emergency Management Agency list: http://www.fema.gov/press/2005/katrinadonations.shtm. Also see Habitat for Humanity's donation site at http://www.habitat.org/.
Share information: Tell us about relief efforts affecting multifamily owners, developers and managers; government or financing industry program assistance; and suggested ways to donate to the recovery. E-mail us at john@housingfinance.com.
Read the latest Hurricane Katrina news at http://www.housingfinance.com.
(Sept. 2, 2005) -- Housing finance organizations have begun announcing relief for areas hit by Hurricane Katrina this week. Details will be fleshed out and more assistance offered as the situation in the Gulf Coast develops, but owners can start to get a picture of options available to help them recover from this natural disaster.
The impact of Katrina has included the flooding of about 80% of New Orleans; the loss of hundreds of waterfront homes, businesses and condominiums in Mississippi; and the loss of power to millions of homes in Alabama, Louisiana, and Mississippi, according to various news reports. The death toll is at least 124, with predictions that it could reach thousands in New Orleans alone.
The evacuation of New Orleans continues, but has been plagued by violence. Tens of thousands of additional National Guard troops have been called up and have started moving into the city to assist in the evacuation and to restore civil order. At least two fires had broken out in the city as of Sept. 2, one in the railroad district and one in a downtown retail building.
The Federal Emergency Management Agency (FEMA) and the Department of Homeland Security have moved their housing clearinghouse to a larger Web site to accommodate the "overwhelming support" they have received so far, according to National Multi Housing Council President Doug Bibby. The site allows apartment owners and managers to post information on available units that can be rented to people displaced by Hurricane Katrina. Go to www.swern.gov.
The Wisconsin Housing and Economic Development Authority (WHEDA) issued a notice to the development community in its state asking for suggestions for how the federal government can help provide regulatory relief and funding for the states affected by Katrina. The WHEDA message noted that the National Council of State Housing Agencies is working with the federal government to ensure program assistance, so other housing finance agencies will likely be making similar appeals in coming days.
Here are some updates and resources for apartment professionals:
The Federal Home Loan Bank (FHLBank) of Dallas, whose territory includes Louisiana and Mississippi, announced special disaster relief funding. Funds for its Economic and Community Development Program will be priced 10 basis points below their regular rates. Income eligibility limits have been expanded to 165% of the area median income.
The FHLBank also is offering expanded hours of technical support. For more information, go to www.fhlb.com/whatsnew.html.
The Department of Housing and Urban Development (HUD) announced plans to find vacant multifamily housing, public housing and HUD-owned homes that could be used as temporary housing.
It also said that recipients of Community Development Block Grants, HOME, and Emergency Shelter Grants can apply to HUD to have those funds reprogrammed for disaster recovery activities. For the latest on HUD efforts, see www.hud.gov/news/katrina05response.cfm.
Some HUD offices were closed by the disaster. Check the following links for updates on the availability of HUD staff in its regional offices:
Alabama: www.hud.gov/local/index.cfm?state=al
Florida: www.hud.gov/local/index.cfm?state=fl
Louisiana: www.hud.gov/local/index.cfm?state=la
Mississippi: www.hud.gov/local/index.cfm?state=ms
In 2004, after four hurricanes struck Florida and the southern coasts of the United States within one month, HUD provided more than $200 million in housing and community development relief. The Florida Housing Finance Corp. responded by prioritizing projects in disaster-hit areas in its next round of federal low-income housing tax credits (LIHTC). Developers in areas hit by Katrina should watch their state housing finance agencies in coming months to see how much of their LIHTC allocations will be devoted to hurricane recovery and whether they will have special assistance programs.
The public finance group of Moody's Investors Service is reviewing the possible effects of the disaster. The company noted that there currently is "not enough information available to assess the ultimate impact and recovery period of the hurricane." But it said that past experience has demonstrated that the natural disaster in itself might not result in a decline in long-term credit quality of institutions.
Fannie Mae and Freddie Mac announced relief for borrowers of single-family mortgages in the states affected by the hurricane. Provisions include extending payments, holding off reporting delinquencies to credit bureaus, expediting the release of insurance proceeds, and more. The government-sponsored enterprises have not yet announced multifamily-specific relief provisions.
The Internal Revenue Service (IRS) has offered some relief in the form of extended filing deadlines for taxpayers in stricken areas. For more information, go to www.irs.gov/newsroom/article/0,,id=108362,00.html. The IRS also announced a telephone number for use by taxpayers affected by Hurricane Katrina who need help with tax matters: 866-562-5227.
The Louisiana Housing Finance Agency (LHFA) had closed its office in Baton Rouge on Wed., Aug. 31, but it opened again by Thursday, Sept. 1. LHFA customers should check its Web site (www.lhfa.state.la.us) for updates
Government, businesses, and individuals are still recovering from the ongoing emergency, so information about the status of conferences or other events scheduled to be held in New Orleans may not be readily available.
But if you are planning to attend an event there in the near future, you may want to keep checking the Web site of the event holder for updates in case of a cancellation, change of date, change of venue within the city, or a move to another city.
Rebuilding to take years
A large share of the more than 200,000 homes in the city of New Orleans may be damaged "beyond repair" due to their prolonged submersion in floodwaters, according to a new study by economists at the National Association of Home Builders.
The repair process is likely to absorb a lot of the construction labor near the affected area, and its impact on the availability and pricing of construction materials might be felt across the country, said NAHB. For example, a number of wood product facilities were damaged or destroyed by the storm.
Also, cement requires specialized import terminal facilities, and New Orleans and Mobile, Ala. -- both hit by Katrina -- are major ports for cement and other building materials. To learn the latest on conditions in the storm area, visit the Web site of FEMA (www.fema.gov/).