Housing RecoveRy
 

on tHe gulf coast
 

SUMMARY REPORT 

U.S. Department of Housing and Urban Development | Office of Policy Development and Research 
Housing Recovery on the Gulf Coast Summary

Summary

HouSinG ReCoveRy 


on tHe Gulf CoaSt
 

Congress frequently provides supplemental 

appropriations through the U.S. Department of 

Housing and Urban Development’s (HUD’s) 

Community Development Block Grant 

(CDBG) program to help communities recover from natural 

and manmade disasters. These Disaster Recovery Grants 

have been used to help New York City recover from the 

attack on the World Trade Center on September 11, 2001; 

to help towns in the upper Midwest recover from severe 

flooding in 1993, 1997, and 2008; and to help the Gulf 

Coast in the wake of Hurricanes Katrina and Rita in 2005. 

Recent research by Abt Associates Inc., under contract with 

HUD, examines how $19.7 billion in Disaster Recovery 

Grants were used in Louisiana, Mississippi, and Texas 

to help with recovery from those devastating hurricanes 

of 2005. 

The research had two key components: “windshield 

observations” of significantly damaged homes and 

neighborhoods and a survey of the owners of properties that 

were badly damaged. HUD has published two reports from 

this research: 

1. Housing Recovery in the Gulf Coast, Phase I: Results 

of Windshield Observations in Louisiana, Mississippi, 

and Texas. 

2. Housing Recovery on the Gulf Coast, Phase II: Results 

of Property Owner Survey in Louisiana, Mississippi, 

and Texas. 

This summary presents key findings from both reports and 

describes key policy issues surrounding the federal role in 

disaster recovery. 

Direct Observation of Housing and 

Neighborhood Conditions in 2010 

Based on windshield observations conducted in early 2010, 

74.6 percent of hurricane-affected properties on significantly 

affected blocks contained a residential structure with no 

substantial repair need—approximately three-fourths of all 

affected properties in the most damaged areas were in good 

condition. An additional 10.8 percent of sites did not contain a 

permanent residential structure; these homes were either 

destroyed by the hurricanes or had been demolished since then. 

The remaining 14.6 percent of hurricane-affected properties on 

significantly affected blocks contained a residential structure 

that still needed substantial repair. Some areas had much higher 

proportions of properties with no residential structure or with 

substantial repair needs. In Louisiana, the Lower Ninth Ward 

Planning District of New Orleans and adjoining St. Bernard 

Parish had the highest percentages of properties without a 

residential structure. In Mississippi, Hancock County, Biloxi, 

and Waveland/Bay St. Louis were the areas most likely to have 

empty lots. Overall, Mississippi had the highest percentage of 

properties without residential structures, but it had a relatively 

small share of structures with substantial repair needs. In 

contrast, Texas had a low percentage of properties with no 

residential structure, but about one-fourth of the existing 

structures had substantial repair needs. 

2
Housing Recovery on the Gulf Coast Summary

Based on the windshield observations combined with CDBG 

administrative records, the Phase I report found that CDBG 

played a key role in the rebuilding process. In Mississippi, 

properties that received CDBG assistance are almost 2.5 times 

as likely to have been rebuilt as properties that did not receive 

CDBG assistance. In Louisiana, some owners chose to sell their 

property to the Louisiana Land Trust (LLT) rather than rebuild. 

If these properties are excluded from the analysis, properties in 

Louisiana with CDBG assistance are almost twice as likely to 

have been rebuilt as properties that did not receive CDBG 

assistance. Both of these estimates of the effect of CDBG 

assistance are from statistical models that include other 

characteristics that influence rebuilding. 

Relocating or Rebuilding 

The second phase of the study included a survey of individuals 

who owned properties in 2005 that were damaged by 

Hurricanes Katrina and Rita. The purpose of this survey 

was to talk directly to affected households to find out about 

their experience trying to rebuild their homes and their lives. 

The survey found that CDBG funds reached the intended 

households. CDBG recipients had higher levels of assessed 

damage, had a higher prevalence of flood damage, were more 

likely to be part of minority racial and ethnic groups (African 

American and Hispanic), and were more likely to have lower 

valued homes. They also had fewer resources from other (nonCDBG) sources. 

The first step in rebuilding is to return home and commit to 

staying, so the first step in this study is to understand who 

returned home and who chose to relocate. Among pre-storm 

property owners, 18 percent no longer owned the property at 

the time of survey (early 2011). An additional 7 percent still 

owned the property but were living elsewhere. According to 

the 2007 American Housing Survey, among all owner occupant 

households nationwide, 7.64 percent moved during the 

previous 1 year. In comparison, 25 percent of households in the 

study had moved over the 5 years since the storms, suggesting 

a fairly low level of turnover and a strong desire to return and 

rebuild. However, it is also important to note that those who 

did move appear to be satisfied with their decision; 66 percent 

reported that they are not interested in moving back to their 

old neighborhood. Movers are also significantly more likely 

than those who stayed to report being very satisfied with their 

current (as of 2011) neighborhood (70 percent and 48 percent, 

respectively). 

For the people who continue to own the same home that was 

damaged by the storms, the survey asked about their rebuilding 

efforts and about the current condition of the home. Among 

these continuing owners, 75 percent rate the current condition 

of their home as good or excellent, which the study uses as a 

proxy for “rebuilt” in subsequent analyses. The study includes 

multivariate analysis of factors that influenced the likelihood of 

rebuilding. Insurance is estimated to have a large and highly 

significant relationship with rebuilding; insured properties are 

37 percent more likely to have been rebuilt than uninsured 

properties. Flood-damaged properties are 16 percent less likely 

to have been rebuilt than properties that did not sustain flood 

damage, possibly because flood damage tends to be more 

pervasive and costly to repair. Properties that are categorized as 

being leveled, demolished, or condemned are 39 percent less 

likely to have been rebuilt. When holding neighborhood home 

value constant, the value of a particular home is negatively 

correlated with the likelihood of rebuilding, suggesting that 

within a particular neighborhood the higher valued homes are 

less likely to be rebuilt than the lower valued homes. One 

possible explanation for this is that the owners of the higher 

valued homes in a neighborhood have the greatest ability to 

rebuild their lives elsewhere and are skeptical of the 

neighborhood’s ability to rebound. 

3
Housing Recovery on the Gulf Coast Summary

Timing of Recovery 

The property owner survey reveals some interesting findings 

about the speed of recovery. Property owners affected by the 

storm largely resolved their situation in the 3 years following 

the storm. Among those who sold their property, 89 percent 

did so in 2008 or before. Among those continuing owners who 

have successfully completed rebuilding, 89 percent did so in 

2008 or before. More than one-half of continuing owners who 

successfully completed rebuilding did so in 2005 or 2006. 

Models for Homeowner Assistance 

The second phase of this research also examines two different 

models for providing homeowner assistance. Texas implemented 

a traditional home repair and rehabilitation model, in which 

housing assistance was directly tied to the home for the exclusive 

purpose of rebuilding, and the state managed the process of hiring 

and managing contractors. This program served roughly 1,000 

households. However, Mississippi and Louisiana, confronted by 

a more widespread disaster, had to operate at much larger scale, 

serving approximately 28,000 and 129,000 households, respectively. 

As a result, these states received a waiver enabling them to provide 

homeowner assistance in the form of a “compensation” grant 

to individual homeowners, which did not necessarily have to 

be used for rebuilding. The waiver was granted to distribute the 

administrative burden and allow for faster recovery. Homeowners 

could hire their own contractor and get started immediately. It is 

unclear whether this strategy was successful. The average length of 

time from the start of construction to the end of construction was 

only 8.1 months in Texas, compared with 10 months in Mississippi 

and 13.9 months in Louisiana. It seems that Texas—with a relatively 

small program and abundant contractor capacity—was able to 

carry out its program effectively once the program was developed. 

However, if measuring from the date of the storms to the end of 

construction, rebuilding in Texas took considerably longer than it 

did in Louisiana and Mississippi. Given the size of the programs 

in Louisiana and Mississippi, this suggests that the compensation 

model did enable rebuilding in Louisiana and Mississippi to start 

sooner than it would have with a standard rehabilitation model. 

Conclusion 

This research has important implications for how to prepare 

for disasters and how to recover from them. The research 

shows that the presence of insurance before the hurricanes was 

a strong predictor of rebuilding. This finding emphasizes the 

importance of homeowner’s insurance and flood insurance, 

particularly for households in disaster-prone areas. 

The research has several implications for disaster recovery. 

Affected households that moved reported higher neighborhood 

satisfaction than those that stayed, suggesting that a model that 

allows for relocation may serve the affected households better 

than a rebuild-only model. 

The research also finds that the extent of damage and the 

presence of flood damage have a significant and substantial 

negative effect on the likelihood of a unit being rebuilt. 

Neighborhoods that suffer widespread, significant flood damage 

are less likely to be successfully rebuilt, suggesting that those 

neighborhoods either should not be rebuilt or would require 

substantially more resources per unit to be rebuilt. 

Finally, the study finds strengths and weaknesses in both 

the rehabilitation model and the compensation model. The 

compensation model does appear to have been successful in 

responding to the scale of the problem in Mississippi and 

Louisiana. As of 2011, the rebuilding rates are comparable 

across the three states, despite the fact that Mississippi 

and Louisiana served approximately 28,000 and 129,000 

households, respectively, compared to only 1,000 in Texas. 

The rehabilitation model, on the other hand, resulted in 

more complete application of funds to rebuilding; 16 percent 

of households in Mississippi and 6 percent of households in 

Louisiana did not use any of their grant funds for rebuilding. 

Although the rehabilitation model may be difficult to scale 

up there is some evidence that it is an appropriate strategy 

for situations in which the priority is to rebuild and adequate 

capacity exists among building contractors. The rehabilitation 

model also enables the government to supervise how rebuilding 

occurs. The organization managing the program can ensure 

compliance with building standards (such as elevation 

requirements) and incorporate other improvements (such as 

energy efficiency upgrades). A homeowner-driven rebuilding 

model runs the risk that assisted households may not pursue 

these important goals. 

Ultimately, the most appropriate rebuilding strategy depends on 

the scope of the damage and the community’s plan for recovery. 

The federal government plays an important role in response 

to, and recovery from, natural disasters. HUD hopes that this 

research helps to inform that role and to help disaster-affected 

communities recover faster and more fully. 

4