U. S. Department of Housing and Urban Development 

Office of Inspector General for Investigation 

Inspections and Evaluations Division 

Inspection of the State of Louisiana’s 

Road Home Elevation Incentive Program 

Homeowner Compliance 

March 2010 

IED-09-002
ii 

Executive Summary 

The Office of Inspector General, Inspections and Evaluations Division, conducts independent, 

objective examinations of U.S. Department of Housing and Urban Development (HUD) 

activities, programs, operations, and organizational issues. 

We completed an inspection of homeowner compliance with the State of Louisiana’s (State) 

Road Home Elevation Incentive (elevation grant) program.1 We wanted to know whether 

homeowners used funds to elevate their homes as set out in their grant agreements. 

Our inspection covered 199 (about 10 percent) of the 1,906 property owners who received more 

than $44.4 million in elevation grants during the first round of State funding in 2006 and 2007. 

We selected the properties from the first State survey of 684 of the 1,906 elevation grant 

recipients.2 In this survey, 190 homeowners (28 percent) responded that they had elevated their 

properties and provided supporting documentation. We inspected properties of nonresponders to 

this survey and responders who claimed on the questionnaire that they had elevated but did not 

provide supporting documentation. The properties inspected were primarily located in four New 

Orleans metropolitan area parishes—Orleans, Jefferson, St. Bernard, and St. Tammany.3

 

Results of our inspections strongly suggest that the elevation grant program is at risk and could 

fail to achieve its intended goal of reducing homeowner flood risks from future hurricanes. Most 

homeowners had not elevated their homes, even though they received grants of up to $30,000 in 

2006 and 2007 to pay toward the construction costs. Seventy-nine percent of the inspected 

homes (158 of 199 properties) were not elevated. These noncompliant homeowners received 

grant funds exceeding $3.8 million. Interviews with homeowners who had not elevated their 

homes revealed a lack of understanding about the obligations set out in the grant agreements. 

Noncompliance in the elevation grant program can only be reversed through strong enforcement 

and a robust recovery program. The second round of grant funding is now complete, with an 

additional 27,291 eligible homeowners receiving elevation grants totaling approximately $800.6 

million. As of early December 2009, the State had disbursed more than $845 million in 

elevation grants to more than 29,000 homeowners to leverage the cost of elevating their homes. 

The level of risk exposure is substantial and demands greater homeowner compliance for 

program success. 

State officials have begun several initiatives designed to increase homeowner compliance. 

Among them, staff is currently implementing a program, funded through the Federal Emergency 

Management Agency that will reimburse Road Home recipients up to $100,000 in elevation 

costs. The State has designed a survey instrument to monitor compliance and has proposed ways 

to increase outreach to homeowners. It has also drafted an enforcement policy. However, it 

should now be moving from policy development to enforcement and recovery while there is still 

time to turn the noncompliance around. 

 

1

 The State program is funded by HUD Community Development Block Grant disaster recovery funds. 

2

 The first State survey was conducted by contractor ICF International during 2008 and completed in January 2009. 

3 Homeowners in these four parishes have received more than 72 percent of the State-awarded elevation grants. 
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We provided a draft copy of our report to the Assistant Secretary, Office of Community Planning 

and Development, and the Executive Director, State of Louisiana, Office of Community 

Development, Disaster Recovery Unit, on February 23, 2010. HUD and the State agreed with 

the recommendations in this report. We received HUD’s written response on March 10, 2010, 

and the State’s written response on March 12, 2010. OIG considers HUD’s and the State’s 

planned corrective actions sufficient to close recommendation 1. However, recommendations 2, 

3, and 4 remain open. The complete text of HUD’s and the State’s comments are included in 

appendixes A and B, respectively. 
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Table of Contents

Introduction ......................................................................................................................................5 

Scope and Methodology ..................................................................................................................6 

Observation – Road Home Elevation Incentive Program Is at Risk ................................................6 

Recommendations ..........................................................................................................................13 

Comments and OIG Response .......................................................................................................14 

Appendix A – HUD’s Office of Community Planning and Development’s Comments ...............15 

Appendix B – State of Louisiana’s Office of Community Development’s Comments .................19
5 

Introduction 

The State of Louisiana’s (State) Office of Community Development and the Louisiana Recovery 

Authority, an advisory board, developed the Road Home program in 2006 to assist homeowners 

with the costs of repairing properties damaged by Hurricanes Katrina and Rita. The homeowner 

assistance program was designed to compensate property owners for repair costs not covered by 

homeowners or flood insurance. It offered an eligible applicant Community Development Block 

Grant (CDBG) disaster recovery-funded grants in return for an agreement to repair and reoccupy 

the property he or she lived in before and at the time of the storms and use it as a primary 

residence within 3 years of closing. Depending on the compensation option selected,4

 three 

forms of grant assistance were available to eligible applicants: (1) a compensation grant, (2) an 

elevation incentive (elevation grant), and (3) an additional compensation grant. Combined, the 

overall grant amount to an eligible homeowner cannot exceed the maximum assistance cap of 

$150,000. 

Elevation Grant Eligibility 

To qualify for an elevation grant under the Road Home Elevation Incentive program, an 

applicant had to own and occupy a property located in a floodplain based on the advisory base 

flood elevation (ABFE)5

 or base flood elevation (BFE) established by the Federal Emergency 

Management Agency (FEMA). Approved applicants signed an elevation incentive agreement 

(grant agreement) with the State promising to elevate their homes to the minimum ABFE 

requirements for a particular parish or the BFE in effect on August 26, 2006. In May 2008, 

elevation allowances were set at a flat rate of $20,000 for owners of manufactured (mobile) 

homes and $30,000 for owners of site-built homes, subject to the $150,000 maximum assistance 

cap. Homeowners were required to fulfill the terms of their grant within 3 years of the date of 

the agreement. For those who failed to comply or return the grant funds, program remedies were 

written into the grant agreement to recover the funds through the State’s debt collection 

processes. 

Elevation Spending 

As of early December 2009, the State had disbursed more than $845 million in elevation grants 

to more than 29,000 homeowners. The initial awards began in November 2006 and continued 

through April 2007. However, payments were suspended because officials were concerned 

about a possible budget shortfall involving the entire Road Home program. When the payments 

were suspended, the State had disbursed approximately $44.4 million to 1,906 homeowners. In 

early 2008, having received additional CDBG disaster recovery funding, the State resumed 

elevation grant disbursements. Between March 2008 and early December 2009, an additional 

27,291 eligible homeowners received elevation grants totaling approximately $800.6 million. 

 

4

 Under the homeowner assistance program, homeowners have three compensation options: (1) stay in their home, 

(2) purchase another home in Louisiana, or (3) sell their home and choose not to remain a homeowner in the State. 

5

 An ABFE becomes a BFE upon adoption by the respective municipality. 
6 

New Funding Sources 

As the CDBG-funded elevation grants have been exhausted, the State has sought other Federal 

sources to continue its program. State officials recently rolled out FEMA’s Hazard Mitigation 

Grant Program, publicly inviting Louisiana residents to take advantage of this new funding 

opportunity. More than 16,000 applicants have expressed interest in participating in this 

program, which reimburses eligible Road Home applicants for costs of up to $100,000 incurred 

in elevating existing or reconstructed homes. 

Grant Performance Monitoring 

State officials monitor the elevation grant agreements and homeowner performance through 

participant surveys. Survey questionnaires are mailed to grant recipients selected using a 

statistical sample. Responses are supplemented by follow-up telephone calls, requests to local 

units of government regarding building permits and inspections, and selected on-site inspections. 

State contractors, ICF International in 2008 and Hammer and Gaines in 2009, performed two 

surveys of the 2006 and 2007 elevation grant recipients, sampling more than 600 homeowners 

each time. Also, in early 2009, the State surveyed approximately 1,000 homeowners who 

received elevation grants in 2008. Each of the three surveys reported a high incidence of 

nonresponders and indicated low compliance rates. 

Scope and Methodology 

We inspected 199 (about 10 percent) of the 1,906 properties, the owners of which received more 

than $44.4 million in elevation grants in 2006 and 2007. The inspections were performed with 

the professional assistance of an Office of Inspector General (OIG) licensed appraiser. The 

properties inspected were primarily located in four New Orleans metropolitan area parishes—

Orleans, Jefferson, St. Bernard, and St. Tammany. Homeowners in these four parishes received 

more than 72 percent of the State-awarded elevation grants. Properties were primarily selected 

based on the first State survey of early elevation grantees. In particular, we focused on 

nonresponders to this survey and to responders who claimed on the questionnaire that they had 

elevated but did not provide supporting documentation. 

We interviewed 24 owners of inspected properties to obtain their comments concerning why they 

had or had not elevated their homes. We also interviewed disaster recovery officials from the 

State’s Office of Community Development and staff from HUD’s Office of Community 

Planning and Development, Disaster Recovery and Special Issues Division, regarding the status 

of the Road Home Elevation Incentive program. 

We conducted the evaluation in accordance with the Quality Standards for Inspections issued by 

the President’s Council on Integrity and Efficiency. 

Observation – Road Home Elevation Incentive Program Is at Risk 

Inspection of 199 properties owned by elevation grant recipients and located in the New Orleans 

metropolitan area revealed that most homeowners had not elevated their homes. Seventy-nine 

percent of the inspected homes (158 of 199 properties) were not elevated, even though 100 
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percent of the homeowners received grants of up to $30,000 in 2006 and 2007 to pay toward the 

elevation construction costs. As a consequence, there is a significant risk that the Road Home 

Elevation Incentive program, currently funded at $845 million through CDBG disaster recovery 

funds, could fail to achieve its intended goal of reducing homeowner flood risks and the costs of 

repairing damage from future hurricanes. 

Selection of Properties 

We selected our inspection sample of 199 properties using the results of the first State survey 

sent to 684 of the 1,906 early elevation grantees who received grant funds during the first round 

of State funding in 2006 and 2007. Survey results were divided into five compliance categories. 

 

State of Louisiana Road Home compliance survey results

           Category Results

1 Owners in compliance 190 28%

2 Claimed elevation but missing documentation 91 13%

3 Claimed elevation in progress 64 9%

4 Claimed elevation not yet started 179 26%

5 No response 160 24%

Total 684 100%

We focused the inspection efforts on properties from categories 2, 4, and 5. Category 2 

properties were inspected to determine whether homeowner responses should be considered 

reliable. Category 4 properties were inspected to determine the percentage of homeowners that 

had elevated their homes after they responded to the State survey. Properties of category 5 

homeowners were inspected to determine the elevation status of this large group of “no 

response” grantees. 

Results of Property Inspections 

Our property inspections disclosed significant levels of homeowner noncompliance. Seventynine percent of property owners in our sample (158 of 199 properties) received grant funds but 

had not elevated their homes as evidenced by our inspections. The cost to the taxpayer because 

of this level of homeowner noncompliance exceeds $3.8 million. 

OIG inspection results

Category Inspected Elevated Not elevated

2 37 6 16% 31 84%

4 41 5 12% 36 88%

5 121 30 25% 91 75%

Total 199 41 21% 158 79%

Category 2

Many of the State-surveyed homeowners who claimed to have elevated their homes (but did not 

submit supporting documentation) had not done so. We inspected 37 (40 percent) of the 91 
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category 2 properties from the State survey. Only six of these properties were elevated (16 

percent). 

Category 4

We inspected 41 (22 percent) of the 179 category 4 properties from the State survey for which 

homeowners reported that they had not yet elevated their properties. Only five (12 percent) of 

these homeowners had elevated their homes between the time they responded to the State survey 

in late 2008 and our inspection in August 2009. 

Category 5

We inspected 121 (75 percent) of the 160 category 5 properties of homeowners who did not 

respond to the State’s survey. Only 30 properties were elevated (about 25 percent). 

The inspection results indicate that most of the 1,906 homeowners who received first-round 

elevation grants have likely not elevated their properties. Only 28 percent of homeowners that 

responded to the State’s survey were reported as being in full compliance with elevation 

requirements at the end of 2008. Another 13 percent responded that they had elevated but did 

not provide documentation. Our inspections determined that a significant number of these 

homeowners had not elevated their properties. 

Elevation Compliance Varied by Neighborhood 

Analysis of inspection results indicates that compliance with elevation grant agreements varied 

among the four New Orleans parishes surveyed. We noted that of the 35 homes that we 

inspected in the West Bank area of Orleans and Jefferson Parishes, none had been elevated. This 

area did not experience widespread flooding from Hurricanes Katrina and Rita. The following 

map shows the locations of three properties presented as examples. 
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The West Bank 

As illustrated in the following example, the $30,000 homeowner grant is probably not sufficient 

to pay for elevating this West Bank home. The home is a large, site-built structure fixed to a 

concrete slab. Although it is possible to detach the home from the foundation and elevate it, 

2310 Beck Street, City of New Orleans (West Bank) 

the costs of doing so could be prohibitive. New flooring must be constructed and inserted into 

the first level. Garages that have to be elevated may no longer be usable for their original 

purpose. Moreover, this New Orleans neighborhood was not heavily flooded. 

Our drive-through inspection of the adjoining neighborhood found little evidence of elevation 

activity. Nevertheless, in Jefferson Parish alone, the State awarded and had disbursed more than 

$112 million in elevation incentive grants to 3,770 homeowners in neighborhoods such as 

Gretna, Harvey, Marrero, and Terrytown as of the end of August 2009. In the Orleans Parish 

portion of the West Bank, 937 homeowners received more than $27 million in elevation grants. 

Lower Ninth Ward

We inspected 13 properties in the Lower Ninth Ward. Only two homes had been elevated. This 

section of New Orleans was heavily flooded. Homes were destroyed and razed. The area is now 

populated by numerous vacant lots. Five of the properties in our Lower Ninth Ward sample 

were vacant lots. Other homes were boarded and empty or occupied by the homeowners and 

grant recipients but had not been elevated. 

The next example is typical of the occupied homes in the area. The wood frame house was 

originally built on piers sunk into the ground. To elevate to FEMA standards, as required by the 

grant agreement, the house would have to be jacked and new higher piers sunk for support. 
10 

5445 Urquhart Street, City of New Orleans (Lower Ninth Ward) 

East Bank Neighborhood (Lakeview District) 

We inspected 10 properties in the Lakeview District, which unlike the West Bank District, was 

heavily flooded. It was in this neighborhood that we found a somewhat higher incidence of 

elevated properties. The example below shows a newly constructed house built on pilings, an 

elevated lot with a retaining wall, and an elevated concrete foundation. 

6628 General Diaz Street, New Orleans, LA (East Bank, Lakeview District)
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The owner told us that the State elevation grant covered only a small fraction of the actual cost to 

elevate this home. 

Homeowner Comments 

Interviews with 18 homeowners that had not elevated their properties elicited responses that 

indicated a lack of understanding about the grant program and the obligations set out in the grant 

agreements. 

Homeowners explained that they were not fully aware of their obligations and the penalties for 

failing to elevate their properties. However, terms of their covenants with the State 

unequivocally obligated grant recipients to pay back the funds for noncompliance. Section 4c of 

the elevation incentive agreement reads: 

c. Obligation to Return Elevation Incentive for Failure to Comply : 

If the home on the Property does not meet or exceed the applicable ABFE’s or BFE’s by 

three years from the date of this Elevation Incentive Agreement, the entire amount of my 

Elevation Incentive must be repaid to the State of Louisiana. 

Four of the eighteen denied that they had applied for and received elevation funding. Four others 

told us that they were not sure whether they had received the money. Another four homeowners 

told us that they believed they were not necessarily required to elevate their homes under the 

terms of the elevation grant agreement. Other homeowners told that us they had spent all of the 

money received from the Road Home program, including elevation money, in repairing and 

reoccupying their homes. Although the 3-year compliance period for the early grant recipients 

had not expired at the time of our inspections, most will expire before mid-year 2010. 

HUD Program Manager Comments 

The Director of the Disaster Recovery and Special Issues Division explained that the division 

had been working through the monitoring process to ensure that Louisiana’s Road Home 

program is successful in achieving its objectives. However, HUD staff had not specifically 

monitored compliance with elevation grant program requirements. The Director emphasized that 

the State, ultimately, is responsible for designing and implementing its CDBG disaster recoveryfunded programs. The division can monitor and provide suggestions for changes that staff 

believe will lead to better outcomes, but it cannot direct that program changes be made unless the 

State’s program violates Federal laws or regulations. 

The level of noncompliance observed during our inspection warrants, at a minimum, closer HUD 

scrutiny and collaboration with the State to encourage homeowners to elevate their properties or 

return the grant funds. 

 
12 

State Program Managers’ Comments 

State Office of Community Development officials acknowledged the difficulty of ensuring that 

homeowners meet the intent of the elevation grant program by using the awards to elevate their 

properties. According to staff, the State had originally envisioned an elevation grant program 

that would provide reimbursement to homeowners based on documented costs of construction. 

Instead, HUD directed the office to change the program design and disburse the grant funds to 

homeowners up front as “disaster compensation” but with an enforceable obligation to use the 

funds for home elevation. However, once the funds were disbursed, the State lost effective 

control of the funds. 

New Funding as a Solution

State officials see FEMA’s Hazard Mitigation Grant program (HMGP) as a partial solution to the 

lack of homeowner compliance in the CDBG disaster recovery-funded Road Home Elevation 

Incentive program. The HMGP, which has been recently promoted to Louisiana homeowners, 

reimburses eligible Road Home applicants for costs up to $100,000 incurred in elevating existing 

or reconstructed homes. As designed, FEMA would pay for elevation costs that exceed grant 

amounts awarded to homeowners under the $30,000 Road Home Elevation Incentive program. 

HMGP will be limited to eligible Road Home applicants, and because it is a reimbursement 

program, staff believes that the program will give the State far greater assurance that elevation is 

completed. In spring 2008, the State notified all eligible Road Home applicants of elevation 

funding availability and requested that interested homeowners return forms indicating their 

desire for HMGP funding. Apparently due to the limited initial response to this request, the State 

increased the cap on HMGP funding in April 2009 from $30,000 to $100,000 per grantee. 

According to officials, the State is working with more than 16,000 applicants who have 

expressed interest in participating in HGMP. 

Outreach and Monitoring

State officials acknowledged a need to provide more outreach to participating homeowners, 

including education with regard to their obligations under elevation grant agreements and 

technical assistance with regard to contracting and property rehabilitation. According to State 

officials, the budget for HMGP provides funding for such outreach. 

State officials developed a revised Road Home Covenant Compliance Monitoring Plan in 

December 2008 that includes compliance monitoring of the elevation grant agreements. The 

plan provides for monitoring a sample of elevation incentive grant recipients through mailed 

surveys. The surveys are to be supplemented by information and data collected from local parish 

jurisdictions including ABFE maps and requirements related to building code compliance, such 

as required permits, inspections, etc. Recipients who return the survey questionnaire with 

documentation showing that they have elevated and obtained flood insurance, if required (e.g., 

copies final inspection, elevation certificate, and flood insurance policy), or they are in the 

process of elevating (e.g., building permit) are considered in compliance. Recipients who 

respond that they have not yet elevated before the expiration of the 3-year compliance period are 

sent a follow-up questionnaire together with a letter reminding the recipient that the deadline for 

completing elevation is approaching. 

 
13 

Enforcement

State officials explained that, when the monitoring process determines that a recipient is out of 

compliance with the elevation agreement and the 3-year performance period has expired, the 

recipient’s grant will be considered repayable to the State. These recipients will be informed that 

they must reimburse the State for the amount of the elevation grant or immediately take steps to 

comply with their obligations. Enforcement actions could include denial of future State benefits 

or possible legal action through the State attorney general’s office. Homeowners not identified 

through the monitoring process will also be subject to enforcement actions if information comes 

to the attention of the State Office of Community Development. 

Recommendations 

The Road Home Elevation Incentive program carries unique risk factors. The program design 

allowed the awarding and disbursing of funds to homeowners based on a contractual promise to 

elevate their properties. Our property inspections of early program participants disclosed a 

potential high risk of default on those promises. Noncompliance in the elevation grant program 

can only be reversed through strong enforcement and a robust recovery program. And given that 

$845 million in Federal funds has been disbursed, involving more than 29,000 Louisiana 

homeowners, it is imperative that HUD and State officials work quickly and collaboratively to 

improve program compliance going forward. 

We recommend that HUD’s Office of Community Planning and Development require the State 

to 

1. Coordinate efforts with HUD to address and reduce the incidence of noncompliance in the 

Road Home Elevation Incentive program. 

2. Ensure that monitoring of the elevation grants provides adequate coverage to specifically 

identify compliant and noncompliant recipients. (The State’s present sampling method 

provides the ability to determine with confidence what percentage of homeowners have not 

elevated, but it will not identify them individually.) 

3. Identify and advise all elevation grant recipients who have yet to meet the terms of their grant 

agreements of their obligation to either elevate the subject property or return the elevation 

grant funds to the State. 

4. Enforce the program remedies for noncompliance as set out in the elevation grant agreements 

starting with recovery, where warranted, of the $3.8 million in grant funds from the 158 

noncompliant homeowners in our sample. 

 
14 

Comments and OIG Response 

We discussed the observations with HUD and the State during the inspection and provided a 

copy of the draft report to the Assistant Secretary, Office of Community Planning and 

Development, and the Executive Director, State of Louisiana, Office of Community 

Development, Disaster Recovery Unit, on February 23, 2010. HUD and the State agree with the 

recommendations in this report and are in the process of taking corrective actions to increase 

homeowner compliance (see appendixes A and B). 

 

OIG considers the planned corrective actions sufficient to close recommendation 1. However, 

recommendations 2, 3, and 4 remain open. There is a high risk of continued noncompliance 

based on our inspection observations, as the compliance periods for many of the elevation grant 

recipients expire in the coming 18 months. HUD and the State’s corrective actions will require 

follow-up to ensure compliance rates increase and program goals are met. We also strongly 

believe that aggressive enforcement to recover grant funds, where warranted, must be an integral 

part of the State’s strategy to “encourage the homeowner to become compliant.” 

OIG will revisit the Road Home Elevation Incentive program at a future date to review the level 

of the State’s success in reducing the noncompliance, achieving intended program goals, and 

enforcing funds recovery. 
15 

Appendix A - HUD’s Office of Community Planning and Development’s Comments 
16 
17 
18 
19 

Appendix B - State of Louisiana’s Office of Community Development’s Comments 
20 

 
21 

 
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