Topics GeographyHeadlinesInfrastructureKatrinaNeighborhoodsPeopleRecreation
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HR-4100 was proposed before the CDBG grants were authorized. It achieved the same goals by setting up a recovery corporation to use proceeds from
Treasury Bond sales to purchase properties in New Orleans neighborhoods
affected by the storm. Homeowners will have the option to participate
or not. Once purchased for some amount (current negotiation suggests
the homeowner will get their mortgage value plus some percentage, say
60%, of any equity they may have had at pre-Katrina valuation) the home
becomes the property of the corporation but the homeowner retains an
option to repurchase the property in the future (first right of
refusal? time limit? amount?)
Baker set the tone and initial design for the use of CDBG money that the state ultimately received.
Ultimately the plan is likely to expose the federal government no more
than $10-20 billion (est. 150,000 homes at $150,000 each) and cost no
more than $1 billion per year to purchase
large swaths of New Orleans. This land will have significant commercial
value
but is not suitable for low density residential housing because of risk
of flooding. With its existing commitment to levees, the government
ought to be able to recover much of this cost in sale of the real
estate for other purposes within just a decade or two.
Why do it? First there is a fairness issue stemming from the idea that
New Orleans would not be in this fix had the federal levees not failed.
This idea gets tied up with a negligence and liability argument as
well. Second there are mortgage banking problems from the foreclosures
that are likely with no bailout.
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