Page 1 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

United States Government Accountability Office

Washington, DC 20548 

June 29, 2007 

The Honorable Joseph I. Lieberman 

Chairman 

The Honorable Susan M. Collins 

Ranking Member 

Committee on Homeland Security and Governmental Affairs 

United States Senate 

Subject: Preliminary Information on Rebuilding Efforts in the Gulf Coast 

The size and scope of the devastation caused by the 2005 Gulf Coast hurricanes 

presents the nation with unprecedented rebuilding challenges.1

 These storms 

destroyed wide swaths of housing, infrastructure, and businesses and displaced 

hundreds of thousands of people from their homes. Today, nearly two years since 

these hurricanes made landfall, rebuilding efforts are at a critical turning point. The 

Gulf Coast and the nation are facing the daunting challenges of rebuilding. Our recent 

work in southern Louisiana and New Orleans confirms that some communities are 

still without basic needs, such as schools, hospitals, and other infrastructure, while 

the doors of many businesses remain closed. 

Over the coming years, perhaps decades, many neighborhoods and communities will 

need to be rebuilt—some from the ground up. At the same time, major decisions will 

need to be made regarding a wide range of issues including coastal restoration, levee 

protection, infrastructure, land use, and economic recovery. Agreeing on what 

rebuilding will be done, where, how, and—particularly important—who will bear the 

costs will be key to moving forward with the rebuilding process. 

To assist you in your oversight responsibilities, we briefed your staff on several 

occasions during the past few months on the results of our preliminary work in 

Louisiana and Mississippi—the two states most directly affected by the 2005 Gulf 

 

1

In this report, unless otherwise noted, we refer to Hurricanes Katrina, Rita, and Wilma collectively as 

the Gulf Coast hurricanes. 
Page 2 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

 

Coast hurricanes.2 This letter transmits information provided during those briefings 

(see enc. I). Specifically, these slides (1) place the federal assistance provided to date 

in the context of the resources likely needed to rebuild the Gulf Coast; (2) discuss 

two key federal programs that provide rebuilding assistance to the Gulf Coast states, 

with an emphasis on the Community Development Block Grant (CDBG) program; (3) 

describe differences in Louisiana’s and Mississippi’s approach to using CDBG funds; 

and (4) provide some observations on planning activities in Louisiana and Mississippi 

and the role of the federal government in coordinating Gulf Coast rebuilding efforts. 

We also raise a number of questions that the committee may wish to consider in 

carrying out its oversight function in reviewing rebuilding efforts in the Gulf Coast. 

We have since updated some of the information in enclosure I, using new 

information, which became available after the briefings. 

In 2005, Hurricanes Katrina, Rita, and Wilma battered the Gulf Coast region, 

devastating whole communities and neighborhoods, leaving hundreds of thousands 

of people without shelter and employment. Hurricane Katrina—the first of these 

storms—made landfall in Mississippi and Louisiana in August 2005 and alone caused 

more damage than any other single natural disaster in the history of the United 

States. Katrina destroyed over 300,000 homes—nearly ten times the number of homes 

destroyed by Hurricanes Camille and Andrew combined—and affected approximately 

90,000 square miles—an area larger than the size of Great Britain.3

 Hurricane Rita 

followed shortly in September 2005, making landfall in Texas and Louisiana. 

Hurricane Wilma was the last of these disasters to strike the region, making landfall 

in southern Florida in October 2005 and inflicting widespread damage across the 

state. 

Our work largely focused on rebuilding efforts in Louisiana and Mississippi—the two 

states most directly affected by the 2005 Gulf Coast hurricanes. In conducting our 

work, we toured affected parishes in southern Louisiana and several affected cities 

along the coast of Mississippi. Further, we interviewed officials from the Department 

of Homeland Security’s (DHS) Office of the Federal Coordinator for Gulf Coast 

Rebuilding and from the Federal Emergency Management Agency (FEMA). We also 

met with a range of state and local officials in these states and representatives from 

private and nongovernment organizations. 

In addition, to place the federal assistance provided to date in the context of the 

resources likely needed to rebuild the Gulf Coast, we reviewed the funds designated 

for hurricane relief and rebuilding in the four emergency supplemental 

appropriations acts enacted between September 2005 and June 2006. We also drew 

on our previous work that examined federal funding for the 2005 Gulf Coast 

2

 We also testified before your Subcommittee on Disaster Recovery on April 12, 2007, about a number 

of issues resulting from our preliminary work in the Gulf Coast. For additional information, see Gulf 

Coast Rebuilding: Preliminary Observations on Progress to Date and Challenges for the Future, 

GAO-07-574T (Washington D.C.: April 12, 2006). 

3

Hurricane Camille—a category 5 hurricane—struck the Gulf Coast of Louisiana and Mississippi in 

1969. Hurricane Andrew—a category 5 hurricane—made landfall along the coast of Florida in 1992. 
Page 3 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

 

hurricanes.4 Further, we reviewed two studies on the estimated costs of the impacts 

of the 2005 hurricanes.5

 Although we found no study that comprehensively estimated 

costs, these studies—which estimated selected categories of losses—were generally 

the broadest in scope based on our search of readily available studies. We did not 

independently verify the accuracy of information included in these studies. 

To discuss two key federal programs that provide rebuilding assistance to the Gulf 

Coast states, we reviewed federal statutes and HUD regulations governing the CDBG 

program and FEMA written policies and procedures for disbursing funds to public 

assistance grantees. We also obtained data from FEMA on the amount of Public 

Assistance funds obligated to Louisiana and Mississippi and reviewed state 

documentation from Louisiana and Mississippi related to each state’s use or planned 

use of CDBG funding. To describe differences in Louisiana’s and Mississippi’s 

approach to using CDBG funds, we analyzed key documentation from Louisiana and 

Mississippi regarding each state’s homeowner assistance programs and criteria for 

disbursing CDBG funding. We focused on the states’ homeowner assistance 

programs, given that Louisiana and Mississippi allocated the vast majority of their 

share of CDBG funding to homeowner assistance. 

To provide observations on planning activities in Louisiana and Mississippi, we 

reviewed state and local planning documents on long- and short-term planning 

rebuilding activities in each state and met with a range of representatives from 

nonprofit and private agencies involved in various planning efforts across the state. 

Further, in Louisiana, we observed local planning meetings in Orleans Parish, while in 

Mississippi, we observed planning activities in the city of Biloxi. 

We conducted our work between July 2006 and June 2007 in accordance with 

generally accepted government auditing standards. 

Summary 

While the federal government has provided billions of dollars in assistance to the Gulf 

Coast, a substantial portion of this aid was directed to short-term needs, leaving a 

smaller portion for long-term rebuilding. It may be useful to view this assistance in 

the context of the costs of damages incurred by the region and the resources that 

may be needed to rebuild. While there are no definitive or comprehensive estimates 

of costs, the various estimates of aspects of these costs offer a sense of their 

4

See GAO, Disaster Relief: Governmentwide Framework Needed to Collect and Consolidate 

Information to Report on Billions in Federal Funding for the 2005 Gulf Coast Hurricanes, GAO-06-

834 (Washington, D.C.: Sept. 6, 2006). 

5

For additional information see, Macroeconomic and Budgetary Effects of Hurricanes Katrina and 

Rita, Statement of Douglas Holtz-Eakin, Director, Congressional Budget Office, before the Committee 

on the Budget, U.S. House of Representatives, Oct. 6, 2005, and Mark L. Burton and Michael J. Hicks, 

Hurricane Katrina: Preliminary Estimates of Commercial and Public Sector Damages (Huntington, 

W.Va.: Marshall University, September 2005). 
Page 4 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

 

magnitude. For example, estimates from the Congressional Budget Office (CBO) put 

capital losses resulting from Hurricanes Katrina and Rita in the range of $70 billion to 

$130 billion6

 while another estimate from the Center for Business and Economic 

Research at Marshall University put losses solely from Hurricane Katrina—including 

capital losses—at over $150 billion.7

 In addition, the State of Louisiana estimates that 

the economic impact on its state alone could reach $200 billion. Such estimates raise 

important questions regarding additional assistance that will be needed to help the 

Gulf Coast rebuild—including how the assistance will be provided and by whom. 

To date, the federal government has provided most long-term rebuilding assistance to 

the Gulf Coast states through two key programs, which follow different funding 

models. Specifically, FEMA’s Public Assistance program provides funding primarily 

to state and local governments to repair and rebuild damaged public infrastructure 

for specific projects that meet program eligibility requirements, as defined by the 

Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act).8

 The 

Housing and Urban Development’s (HUD) CDBG program, on the other hand, 

provides funding for neighborhood revitalization and housing rehabilitation activities, 

affording states broad discretion and flexibility in deciding how to allocate these 

funds and for what purposes. To date, the affected states have received $16.7 billion 

in CDBG funding from supplemental appropriations--—so far, the largest share of 

funding specifically targeted to long-term rebuilding.9

With the vast number of homes that sustained damage in Louisiana and Mississippi, 

both of these states allocated the bulk of their CDBG funds to homeowner 

assistance.10 Specifically, each state developed an assistance program to compensate 

homeowners whose homes were damaged or destroyed by the 2005 hurricanes. With 

many of its residents living in other states and debating whether to return to 

Louisiana, Louisiana’s Road Home program aims to encourage homeowners to return 

6

According to CBO, capital losses include housing, consumer durable goods, and energy, other privatesector and government losses. For more information see, Macroeconomic and Budgetary Effects of 

Hurricanes Katrina and Rita, Statement of Douglas Holtz-Eakin, Director, Congressional Budget 

Office, before the Committee on the Budget, U.S. House of Representatives, Oct. 6, 2005. 

7

This estimate includes damages only to commercial structures and equipment, residential structures 

and contents, electrical utilities, highways, sewer systems, and commercial revenue losses. For more 

information see, Mark L. Burton and Michael J. Hicks, Hurricane Katrina: Preliminary Estimates of 

Commercial and Public Sector Damages (Huntington, W.Va.: Marshall University, September 2005). 

8

The Stafford Act, as amended, establishes the primary programs and processes for the federal 

government to provide major disaster and emergency assistance to states, local governments, tribal 

nations, individuals, and qualified private nonprofit organizations. 42 U.S.C. §§ 5121-5207. 

9

Pub. L. No. 109-148, 119 Stat. 2680, 2779-80 (Dec. 30, 2005); Pub. L. No. 109-234, 120 Stat. 418, 472-73 

(June 15, 2006). 

10A portion of these allocations also was directed to other housing programs such as rental housing and 

public housing, as well as to projects intended to alleviate expenses associated with housing, such as 

utility and insurance costs. 
Page 5 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

 

to the state and begin rebuilding.11 Mississippi’s homeowner assistance program—

administered in two phases—aims to compensate homeowners who suffered losses 

due to Katrina’s storm surge. Phase I is targeted to homeowners located outside 

FEMA’s designated flood plain who were otherwise insured, while Phase II is 

targeted to uninsured or underinsured homeowners located in or outside the flood 

plain. As of May 30, 2007, Louisiana has received 141,235 applications and awarded 

23,043 grants to eligible homeowners. For Phase I of its program, Mississippi has 

received 18,965 applications and awarded payments to 12,950 eligible homeowners. 

Mississippi has received 11,529 applications for Phase II of its program and awarded 

28 grants to eligible homeowners. 

Restoration of the region’s housing and infrastructure is taking place in the context of 

broader planning and coordination activities. In Louisiana and Mississippi, state and 

local governments are engaged in both short- and long-term planning efforts. For 

example, the Louisiana Recovery Authority has coordinated a statewide rebuilding 

planning effort and has developed a comprehensive rebuilding plan that will help 

direct rebuilding policy and Louisiana’s long-term spending over the next 50 years. 

Mississippi created an overall plan to serve as a framework for subsequent planning 

efforts in affected areas of the state, based on the work of the Governor’s 

Commission on Recovery, Rebuilding, and Renewal.12 Moreover, the President 

established the position of Coordinator of Federal Support for the Recovery and 

Rebuilding of the Gulf Coast Region within the Department of Homeland Security 

(DHS) to coordinate and support the rebuilding activities at the federal, state, and 

local levels. 

As states and localities begin to develop plans for rebuilding, there are difficult policy 

decisions Congress will need to make about the federal government‘s contribution to 

the rebuilding effort and the role the federal government might play over the longterm in an era of competing priorities. Based on our preliminary work, we raise a 

number of questions the Committee may wish to consider in carrying out its oversight 

of Gulf Coast rebuilding efforts, to include the following: 

• How much will it cost to rebuild the Gulf Coast and how much of this cost 

should the federal government bear? 

• How effective are current funding delivery mechanisms—such as Public 

Assistance and CDBG—and should they be modified or supplemented by other 

mechanisms? 

11Although not discussed in this report, the Road Home program also provides assistance for rental 

property owners and renters to address housing needs of low- to moderate-income individuals in the 

most heavily damaged areas. The objectives of the rental assistance component of the program include 

providing capital to owners of small rental properties to repair and reconstruct damaged units, 

providing affordable rents for working families, and supporting redevelopment in impacted 

communities. 

12 The commission’s work culminated in 238 recommendations that were included in a final report 

entitled After Katrina: Building Back Better Than Ever (Dec. 31, 2005). 
Page 6 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

• How can the federal government further partner with state and local 

governments and the nonprofit and private sectors to leverage the public 

investment in rebuilding? 

We provided the Secretary of DHS with a draft of this report on May 11, 2007. In its 

oral response, DHS informed us that it had no formal comments on the report. We 

also provided Louisiana and Mississippi officials an opportunity to review relevant 

aspects of this report. Any technical or clarifying comments that they provided as 

part of that review have been incorporated where appropriate. 

We are sending copies of this report to the Chairman and Ranking Member of the 

Subcommittee on Disaster Recovery, the Secretary of the Department of Homeland 

Security, the Federal Coordinator for Gulf Coast Rebuilding, and interested 

congressional committees. We will make copies to others on request. In addition, the 

report will be available on GAO’s Web site at http://www.gao.gov. 

If you or your staff have questions regarding this report, please contact me at (202) 

512-6806 or by email at czerwinskis@gao.gov. Individuals making key contributions to 

this report include Charlesetta Bailey, Dean Campbell, Roshni Davé, Peter Del Toro, 

Laura Kunz, Brenda Rabinowitz, Michael Springer, and Diana Zinkl. 

Stanley J. Czerwinski 

Director, Strategic Issues 

 

Enclosure 
Enclosure 

Page 7 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

Preliminary Information

on Gulf Coast Rebuilding
Enclosure 

Page 8 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

2

Objectives

As agreed, our objectives were to: 

(1) place the federal assistance provided to date in the context of the 

resources likely needed to rebuild the Gulf Coast;

(2) identify the key federal programs that provide rebuilding assistance to

the Gulf Coast states, with an emphasis on the Community Development Block Grant (CDBG) program; 

(3) describe differences in Louisiana’s and Mississippi’s approach to

using CDBG funds; and

(4) provide some observations on planning activities in Louisiana and 

Mississippi and the role of the federal government in coordinating Gulf Coast rebuilding efforts. 

In addition, we raise a number of questions that Congress may wish to

consider in carrying out its oversight of the Gulf Coast.
Enclosure 

Page 9 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

3

Scope and Methodology

• For this work, we:

• Interviewed federal, state, and local officials in Louisiana, Mississippi, and Washington, D.C. 

• Observed local recovery planning meetings in New Orleans, 

Louisiana, and Biloxi, Mississippi.

• Reviewed and analyzed federal, state, and local documentation on a 

range of issues related to Gulf Coast rebuilding efforts, such as 

CDBG funding allocations, state homeowner assistance programs, and state and local planning efforts. 

• Reviewed selected studies related to the budgetary and economic

impacts of Hurricanes Rita and Katrina.
Enclosure 

Page 10 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

4

Camille (Cat 5) 1969 

$ Damage

(2005 Dollars)

# Evacuated

(prior to impact)

# Displaced

(after impact)

# Homes Destroyed

150,000

300,000

# Homes Damaged

2,000,000

1,000,000

2,000,000

1,000,000

Casualties

500

1500

1000

400,000

100,000

300,000

200,000

$150 B

$75 B

250

Background: The Impact of Hurricane Camille

Source: DHS.
Enclosure 

Page 11 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

5

Andrew (Cat 5) 1992

$ Damage

(2005 Dollars)

# Evacuated

(prior to impact)

# Displaced

(after impact)

# Homes Destroyed

150,000

300,000

# Homes Damaged

2,000,000

1,000,000

2,000,000

1,000,000

# Casualties

500

1500

1000

400,000

100,000

300,000

200,000

$150 B

$75 B

250

Background: The Impact of Hurricane Andrew

Source: DHS.
Enclosure 

Page 12 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

6

Camille (Cat 5) 1969 

Andrew (Cat 5) 1992

Katrina (Cat 3) 2005

(with New Orleans & Levee

Breaks)

Katrina with New Orleans and Levee Breaks

Background: The Impact of Hurricanes Camille and

Andrew Compared to Hurricane Katrina

Source: DHS.

$ Damage (2005 Dollars)

# Evacuated

(prior to impact)

# Displaced

(after impact)

# Homes

Destroyed

150,000

300,000

# Homes

Damaged

2,000,000

1,000,000

2,000,000

1,000,000

# Casualties

500

1500

1000

400,000

100,000

300,000

200,000

$150 B

$75 B

250

D R A F T
Enclosure 

Page 13 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

7

A Relatively Small Portion of Federal Assistance Targeted 

to Long-Term Rebuilding, While Loss Estimates Suggest

Great Need

• To respond to the Gulf Coast devastation, the federal government

committed over $110 billion in resources through grants, loan subsidies, 

and tax relief and incentives. 

• The bulk of this assistance was provided to 23 agencies through four 

emergency supplemental appropriations totaling $88 billion.1 

P.L. 109-61 P.L. 109-62 P.L. 109-148 P.L.109-234

September 2, 2005 September 8, 2005 December 30, 2005 June 15, 2006

1Besides these four main supplemental appropriations acts, a number of authorizations and programs provided the remaining assistance. Congress increased the borrowing authority of the National Flood Insurance Program to cover the large number of hurricane-related claims and passed the Gulf Opportunity Zone Act to provide tax relief benefits and incentives to affected entities.
Enclosure 

Page 14 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

8

A Relatively Small Portion of Federal Assistance Targeted 

to Long-Term Rebuilding, While Loss Estimates Suggest

Great Need

• A substantial portion of this assistance was directed to

emergency and short-term needs, such as relocation 

assistance, emergency housing, immediate levee repair, and 

debris removal. 

• Consequently, a relatively small portion of federal assistance

provided thus far is available for longer-term rebuilding 

activities, such as the restoration of the region’s housing and 

infrastructure. 
Enclosure 

Page 15 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

9

A Relatively Small Portion of Federal Assistance Targeted 

to Long-Term Rebuilding, While Loss Estimates Suggest

Great Need

• Moreover, it may be useful to view this assistance in the context of the 

costs of damages incurred by the region and the resources needed to 

rebuild.

• Early damage estimates from the Congressional Budget Office (CBO) 

put capital losses (to include housing, consumer durable good, and 

energy and other private sector and government losses) from

Hurricanes Rita and Katrina at a range of $70 billion to $130 billion.2 

• Another estimate from the Center for Business and Economic

Research at Marshall University put losses solely from Hurricane

Katrina—to include capital losses—at over $150 billion. This estimate

was limited to damages affecting commercial structures and 

equipment, residential structures and contents, electrical utilities, 

highways, sewer systems, and commercial revenue losses.3 

• Further, the state of Louisiana estimates that the economic impact on its 

state alone could reach $200 billion.

2 For additional information see, Macroeconomic and Budgetary Effects of Hurricanes Katrina and Rita, Statement of Douglas Holtz-Eakin, Director, Congressional Budget Office, before the Committee on the Budget, U.S. House of Representatives, Oct. 6, 2005.

3 For additional information see, Mark L. Burton and Michael J. Hicks, Hurricane Katrina: Preliminary Estimates of Commercial and Public

Sector Damages (Huntington, W.Va.: Marshall University, September 2005).
Enclosure 

Page 16 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

10

A Relatively Small Portion of Federal Assistance Targeted 

to Long-Term Rebuilding, While Loss Estimates Suggest

Great Need

• While the exact costs of damages and rebuilding the Gulf Coast may never 

be known, they will likely surpass those from the three costliest disasters in

recent history—Hurricane Andrew, the September 2001 terrorist attacks, 

and the 1994 Northridge earthquake.

C $38.5 ategory 5 hurricane

Hurricane Andrew

(1992)

Acts of terrorism $87.0

September 11

attacks

(2001)

$48.7

Earthquake measuring 

6.7 on the Richter scale

Northridge 

earthquake

(1994)

Cost in billions

(2005 dollars)

Disaster Type of disaster

Source: CBO.
Enclosure 

Page 17 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

11

Two Key Federal Programs That Provide Long-Term

Rebuilding Assistance Use Different Approaches

• The federal government has provided long-term rebuilding assistance to

the Gulf Coast states through 2 key programs—FEMA’s Public Assistance 

and HUD’s CDBG programs. Each of these programs follow different

funding models. 

Public Assistance

• Project-based grants that provide assistance primarily to state and

local governments to repair and rebuild damaged public infrastructure 

and includes activities such as removing debris, repairing roads, and

reconstructing government buildings, and utilities.

• Pursuant to the Robert T. Stafford Disaster Relief and Emergency

Assistance Act (Stafford Act),4 and FEMA regulations, this assistance

is limited to either a fixed-dollar amount or a percentage of eligible

costs for restoring damaged facilities or other eligible projects. 

4 The Stafford Act, as amended, establishes the primary programs and processes for the federal government to provide major disaster and emergency assistance to states, local governments, tribal nations, individuals, and qualified private nonprofit organizations. 42 

U.S.C. §§ 5121-5207.
Enclosure 

Page 18 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

12

Two Key Federal Programs That Provide Long-Term

Rebuilding Assistance Use Different Approaches

• To receive public assistance, applicants must submit requests for work

which are then considered for eligibility, based on criteria under the 

Stafford Act and FEMA regulations. Specifically,

• Proposed work is considered for eligibility through “project 

worksheets”—applications for specific funding amounts to complete 

discrete work segments. Among other things, project worksheets 

document the scope of the work, cost estimates, damage descriptions 

and dimensions, and special considerations for each work segment. 

• FEMA obligates funds for approved projects, providing specific 

amounts to complete discrete work segments on large projects. States

reimburse applicants for costs that meet the Stafford Act’s public

assistance eligibility criteria and FEMA reimburses the states for the 

federal share.

• As of June 15, 2007, FEMA has obligated over $4.6 billion to Louisiana and

over $2 billion to Mississippi through its public assistance program.5

5 In both states, a substantial portion of this assistance was obligated to emergency and response items, such as debris removal.
Enclosure 

Page 19 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

13

Two Key Federal Programs That Provide Long-Term

Rebuilding Assistance Use Different Approaches

Community Development Block Grant 

• Formula-based grants that afford states and local governments a great 

deal of discretion in designing directed neighborhood revitalization, 

housing rehabilitation, and economic development activities. 

• During disasters, such as the Gulf Coast hurricanes, Congress has 

provided even greater flexibility when allocating additional CDBG

funds to affected communities and states. 

• Other examples of CDBG funds supporting recovery efforts during 

disasters include: in New York City following the terrorist attacks of 

September 11, 2001; in Oklahoma City following the bombing of 

the Alfred Murrah Building in 1995; and in the city and county of 

Los Angeles following the riots of 1992. 
Enclosure 

Page 20 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

14

Two Key Federal Programs That Provide Long-Term

Rebuilding Assistance Use Different Approaches

• To date, the affected states have received $16.7 billion in CDBG funding from

the supplemental appropriations—which is, so far, the largest share of funding 

specifically targeted to rebuilding.

6

• Louisiana and Mississippi were allocated the largest shares of CDBG 

appropriations, with $10.4 billion allocated to Louisiana, and another $5.5 billion 

allocated to Mississippi. Florida, Alabama, and Texas received the remaining

share of funds.

7

6 Pub. L. No. 109-148, 119 Stat. 2680, 2779-80 (Dec. 30, 2005); Pub. L. No. 109-234, 120 Stat. 418, 472-73 (June 15, 2006).

7 Texas received over $503 million, Florida received about $183 million, and Alabama received nearly $96 million.
Enclosure 

Page 21 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

15

Two Key Federal Programs That Provide Long-Term

Rebuilding Assistance Use Different Approaches

• To receive CDBG funds, HUD required that each state submit an action

plan describing how the funds would be used, including how the funds

would address long-term “recovery and restoration of infrastructure.” This 

process afforded each state broad discretion in deciding how to allocate its 

share of CDBG funding and for what purposes. Specifically,

• Louisiana developed its action plans through the Louisiana Recovery

Authority (LRA)—the state agency created at the direction of Governor

Blanco and charged with coordinating and overseeing the state’s 

rebuilding efforts—and through the state’s Office of Community 

Development.8 These action plans were subject to the approval of

Louisiana’s state legislature.

8 The LRA was created at the direction of Governor Blanco by executive order in October of 2005 and subsequently authorized by the state legislature in early 2006.
Enclosure 

Page 22 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

16

Two Key Federal Programs That Provide Long-Term

Rebuilding Assistance Use Different Approaches

• Mississippi developed its action plans through the Mississippi

Development Authority (MDA)—the state’s lead economic and 

community development agency—and the Governor’s Office of 

Recovery and Renewal. In contrast to Louisiana, Mississippi’s state 

legislature was not involved in the approval process for these state 

funding decisions.

• Consistent with HUD requirements, both Louisiana and Mississippi

have published plans soliciting public input within their state regarding 

the planned use of CDBG funds. 
Enclosure 

Page 23 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

17

Two Key Federal Programs That Provide Long-Term

Rebuilding Assistance Use Different Approaches

Both Louisiana and Mississippi allocated the majority of their share of 

CDBG funding to housing priorities. The remaining funds were allocated

primarily to economic development and infrastructure. 

aIn Mississippi, “other” refers to wind insurance mitigation and funds not yet programmed by the state. In Louisiana, “other” refers to funding

for planning and administrative activities.
Enclosure 

Page 24 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

18

Louisiana and Mississippi Target the Majority of Their 

CDBG Funds to Homeowners, but Differ in Their Policies

• Both Louisiana and Mississippi directed the vast majority of their CDBG

housing allocations to homeowners—tailoring their programs to address 

the particular conditions within their state. A portion of these allocations 

also was directed to other housing programs such as rental housing and

public housing, as well as to projects that will alleviate costs associated 

with housing, such as utility and insurance costs. 

• Louisiana and Mississippi homeowner assistance programs are similar in

that each is designed to compensate homeowners whose homes were 

damaged or destroyed by the storms. Under each program, the amount of

compensation that homeowners receive depends on the value of their 

homes before the storms and the amount of damage that was not covered 

by insurance or other forms of assistance. 

• These programs, however, differ in their policies and eligibility 

requirements.
Enclosure 

Page 25 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

19

Louisiana and Mississippi Target the Majority of Their 

CDBG Funds to Homeowners, but Differ in Their Policies

Louisiana’s Homeowner Assistance Program Aims to Restore a 

Displaced Population

• Louisiana witnessed a significant population loss in the wake of the

Gulf Coast hurricanes, with many residents living in other states and

debating whether to return to Louisiana. 

• The Louisiana Recovery Authority, in close consultation with state and 

federal agencies, developed a program to restore the housing infrastructure in Louisiana, using CDBG funds from the supplemental 

appropriations described earlier. 

• Referred to as the Road Home, this program is designed to encourage

homeowners to return to Louisiana and begin rebuilding.
Enclosure 

Page 26 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

20

Louisiana and Mississippi Target the Majority of Their 

CDBG Funds to Homeowners, but Differ in Their Policies

• Under this program, homeowners who decide to stay in the state and 

rebuild in Louisiana are eligible for the full amount of grant

assistance—up to $150,000—while those leaving the state will receive

a lesser share. 

• Except for the elderly, residents who choose to sell their homes

and leave the state will have their grant awards reduced by 40

percent. 

• Residents who did not have insurance at the time of the 

hurricanes will have their grant awards reduced by 30 percent. 

• Further, to receive compensation, homeowners must comply with

applicable code and zoning requirements and FEMA advisory base 

flood elevations when rebuilding and agree to use their home as a 

primary residence at some point during a 3-year period after closing. 
Enclosure 

Page 27 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

21

Louisiana and Mississippi Target the Majority of Their 

CDBG Funds to Homeowners, but Differ in Their Policies

• The Road Home Program began accepting applications on August 29,

2006.

• As of May 30, 2007, the Road Home program has received 141,235 

applications, of which 84,136 have been verified and an award amount

had been calculated. 

• As of this date, 42,342 applicants have notified the program and

decided on a course of action (for example, whether to rebuild or sell).

• The program has awarded payments to 23,043 homeowners with an

average award amount of $74,514. 
Enclosure 

Page 28 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

22

Louisiana and Mississippi Target the Majority of Their 

CDBG Funds to Homeowners, but Differ in Their Policies

Mississippi’s Homeowner Assistance Program Aims to Compensate Homeowners

for Losses

• In Mississippi, Katrina’s storm surge destroyed tens of thousands of homes, many of

which were located outside FEMA’s designated flood plain and not covered by flood

insurance. Mississippi developed a two-phase program to target homeowners who

suffered losses due to the storm surge. Specifically,

• Phase I is designed to compensate homeowners whose properties were located

outside the floodplain and had maintained hazard insurance at a minimum.

• Eligible for up to $150,000 in compensation, homeowners are not subject to a 

requirement to rebuild.

• To receive an award, eligible applicants must place a covenant on their property, providing that flood insurance will be maintained in perpetuity, the home will be 

rebuilt or repaired to local building codes, and if rebuilt, the home will be

elevated to FEMA elevation standards.
Enclosure 

Page 29 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

23

Louisiana and Mississippi Target the Majority of Their 

CDBG Funds to Homeowners, but Differ in Their Policies

• Phase II provides assistance to homeowners who received flood surge

damage, regardless of whether they lived inside or outside the flood zone or

had maintained insurance on their homes. Eligible applicants must have an

annual income at or below 120 percent of the Area Median Income (which

varies by county).

• Eligible for up to $100,000 in grant awards, homeowners are not subject to

a requirement to rebuild.

• To receive an award, eligible applicants—like those in Phase I—must

place a covenant on their property, providing that flood insurance will be

maintained in perpetuity, the home will be rebuilt or repaired to local

building codes, and if rebuilt, the home will be elevated to FEMA elevation 

standards. 

• Homeowners who did not maintain insurance at the time of the storm will

have their grant reduced by 30 percent, although this penalty does not 

apply to the “special needs” populations as defined by the state (i.e., elderly, disabled, and low income.)
Enclosure 

Page 30 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

24

Louisiana and Mississippi Target the Majority of Their 

CDBG Funds to Homeowners, but Differ in Their Policies

• Mississippi’s Homeowner Assistance Program began accepting 

applications in April 2006.

• As of May 30, 2007, Mississippi had received 18,965 applications for 

Phase I of its program, of which 14,381 were determined eligible for 

consideration. Of those, Mississippi awarded payments to 12,950

homeowners, while 863 applications were still being processed. The 

average grant awarded was $69,669. 

• As of this date, Mississippi has received 11,529 applications for Phase 

II of its program, of which 4,130 were rolled over from the Phase I

program.9 Mississippi has awarded payments to 28 eligible

homeowners. 

9 The 4,130 applicants include: (1) homeowners who have been determined ineligible for the Phase I program and (2) homeowners who have been determined eligible for the Phase I program and have received assistance, but still have an uncompensated loss. These applicants can be considered for additional assistance under the Phase II program, although the total amount of assistance between the two programs is limited to $150,000.
Enclosure 

Page 31 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

25

Louisiana and Mississippi Are Engaged in Planning 

Activities, While the Federal Government Has Assumed a 

Coordination Role

In Louisiana, state and local governments are engaged in short- and

long-term planning activities

• At the state level, the LRA is coordinating a number of initiatives to 

support redevelopment through a multifaceted planning process that

combines the efforts of federal, state, and local partners, experts and 

citizens. 

• Referred to as Louisiana Speaks, the planning process is led by a

team of professional planners and architects who have been retained 

to develop plans and resources for individual homeowners and 

businesses, communities and parishes, and the region.
Enclosure 

Page 32 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

26

Louisiana and Mississippi Are Engaged in Planning 

Activities, While the Federal Government Has Assumed a 

Coordination Role

• Through Louisiana Speaks:

• an architectural planning tool (referred to as a “pattern book”) has 

been developed and distributed for homeowners, architects, and

permitting officials about how to redesign and rebuild commercial and 

residential buildings. 

• local design workshops—called “charrettes”—have been developed to

guide neighborhood planning efforts in the impacted areas. 

• teams of professional planners, FEMA and LRA officials and 

representatives have worked with impacted parishes to develop longterm recovery plans.
Enclosure 

Page 33 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

27

Louisiana and Mississippi Are Engaged in Planning 

Activities, While the Federal Government Has Assumed a 

Coordination Role

• In addition, through public input, Louisiana Speaks also developed a 

regional plan for Southern Louisiana, focusing on a number of critical

challenges for the state’s redevelopment. 

• The regional plan evaluates economic, environmental, and social

issues that affect Southern Louisiana and explores alternative ways

that growth and development can be accommodated in the context of

varying environmental, economic, and cultural changes. The state of 

Louisiana will use the regional plan to help direct rebuilding policy and 

Louisiana’s long-term spending over the next 50 years. 
Enclosure 

Page 34 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

28

Louisiana and Mississippi Are Engaged in Planning 

Activities, While the Federal Government Has Assumed a 

Coordination Role

Source: Louisiana Speaks.

Illustration of Louisiana’s Planning Process

Pattern books assist home and 

business owners with rebuilding 

commercial and residential 

buildings.

Teams (planners, LRA, and FEMA officials)

assist city and parish officials in developing 

long-term plans in impacted areas.

A South Louisiana regional plan will

provide a framework for Louisiana 

policy and spending over 50 years.

Neighborhood

City/Parish

Home/

Business

Region/State

Local design workshops guide

neighborhood planning efforts.
Enclosure 

Page 35 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

29

Louisiana and Mississippi Are Engaged in Planning 

Activities, While the Federal Government Has Assumed a 

Coordination Role

Highlights of planning efforts in New Orleans

• After a number of attempts to develop a rebuilding plan for New Orleans—

including the Bring New Orleans Back Commission, efforts initiated by the 

city council, Urban Land Institute, and others—in August 2006, New 

Orleans embarked on a comprehensive rebuilding planning process, which 

continues to date. Referred to as the Unified New Orleans Plan (UNOP), this effort was designed as a grassroots approach to planning.

• UNOP’s objective is to incorporate the vision of neighborhoods and 

districts into multiple district-level plans and one citywide plan that

establishes goals and priorities for rebuilding the city. 

• UNOP’s final citywide plan—approved by the city’s planning

commission in May 2007 and approved by the City Council in June

2007—includes priority programs and projects for repairing and 

rebuilding the city over a 5- to 10-year period and will help to inform

critical funding and resource allocation decisions by state and federal

agencies.
Enclosure 

Page 36 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

30

Louisiana and Mississippi Are Engaged in Planning 

Activities, While the Federal Government Has Assumed a 

Coordination Role

In Mississippi, state and local governments are engaged in short- and

long-term planning activities

• At the state level, Governor Barbour created the Governor’s

Commission on Recovery, Rebuilding and Renewal in September 

2005 to identify rebuilding and redevelopment options for the state.

• Comprised of over 20 committees—including both private and 

public involvement, the Commission held numerous public forums

across multiple counties in an effort to solicit input and participation 

from residents throughout the state.

• In December 2005, the commission’s work culminated in a final 

report containing 238 policy recommendations aimed at addressing

a range of rebuilding issues and concerns across the state, from

infrastructure and economic development to human services and 

finance.10

10 Entitled After Katrina: Building Back Better Than Ever (December 31, 2005).This report included recommendations to the Governor’s Office and a range of federal, state, and local stakeholders involved in the state’s rebuilding efforts.
Enclosure 

Page 37 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

31

Louisiana and Mississippi Are Engaged in Planning 

Activities, While the Federal Government Has Assumed a 

Coordination Role

• The report also addressed potential financing mechanisms, identifying

state, local, private, and federal sources. Further, the 

recommendations identified parties responsible for implementing the 

recommendations, including the creation of new state and regional

entities to oversee selected recommendations. 

• In addition, Governor Barbour created the Office of Recovery and

Renewal to oversee and coordinate implementation of these 

recommendations. Also charged with identifying funding for rebuilding 

projects, the office continues to work with public and private entities as

well as state and local governments.
Enclosure 

Page 38 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

32

Louisiana and Mississippi Are Engaged in Planning 

Activities, While the Federal Government Has Assumed a 

Coordination Role

• Further, local governments in south Mississippi are also engaged in

rebuilding planning activities. 

• For example, the city of Biloxi established a volunteer steering

committee—modeled after the Governor’s Commission on Renewal 

and Recovery—to develop a rebuilding plan for the city. Biloxi’s final 

rebuilding plan resulted in 162 recommendations to address core 

issues affecting the city, such as infrastructure, economic 

development, human services, and finance. In addition, the steering

committee commissioned a separate rebuilding plan for East Biloxi—a 

low-lying area that had been heavily damaged by Hurricane Katrina—

that included 27 recommendations for addressing this area of the city. 

• A number of other impacted communities in south Mississippi have

undertaken planning initiatives as well.
Enclosure 

Page 39 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

33

Louisiana and Mississippi Are Engaged in Planning 

Activities, While the Federal Government Has Assumed a 

Coordination Role

The administration established a mechanism to coordinate with—and 

support rebuilding activities at—the federal, state, and local levels

• In November 2005, the President issued executive orders establishing

two new entities to help provide a governmentwide response to federal

rebuilding efforts. 

• The first order created the position of Coordinator of Federal Support for the Recovery and Rebuilding of the Gulf Coast Region within the

Department of Homeland Security.11 Accordingly, the Federal 

Coordinator is responsible for developing principles and goals, leading the development of federal recovery activities, and monitoring the 

implementation of designated federal support. The Coordinator also 

serves as the administration’s focal point for managing information 

flow, requests for actions, and discussions with Congress, state, and

local governments, the private sector, and community leaders.

11 “Establishment of a Coordinator of Federal Support for the Recovery and Rebuilding of the Gulf Coast Region,” Exec. Order No. 13,390, 70 Fed. Reg. 67,327 (Nov. 1, 2005).
Enclosure 

Page 40 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

34

Louisiana and Mississippi Are Engaged in Planning 

Activities, While the Federal Government Has Assumed a 

Coordination Role

• Our discussions with state and local officials in Louisiana revealed a 

largely positive disposition towards the Federal Coordinator and his

role in support of the Gulf Coast. During our field work, for example, Louisiana state and local officials said the Coordinator had played an 

integral role in helping to identify and negotiate an appropriate level of 

CDBG funding for the state.

• The second executive order established a Gulf Coast Recovery and

Rebuilding Council within the Executive Office of the President for a

period of 3 years.12 Chaired by the Assistant to the President for 

Economic Policy, the council includes most members of the Cabinet 

and is charged with examining issues related to the furtherance of the

President’s policy on recovery and rebuilding of the Gulf Coast.

12 “Creation of the Gulf Coast Recovery and Rebuilding Council,” Exec. Order 13,389, 70 Fed. Reg. 67,325 (Nov. 1, 2005).
Enclosure 

Page 41 GAO-07-809R Preliminary Information on Gulf Coast Rebuilding 

35

Selected Questions for Congressional Oversight of Gulf

Coast Rebuilding

• As states and localities begin to assume responsibility for developing plans 

for rebuilding, there are difficult policy decisions Congress will need to

make about the federal government‘s contribution to the rebuilding effort 

and the role it might play over the long-term in an era of competing priorities. Based on our preliminary work and the issues raised in this

report, Congress may wish to consider the following questions as it

continues to carry out its critical oversight function in reviewing rebuilding efforts on the Gulf Coast:

• How much will it cost to rebuild the Gulf Coast and how much of this

cost should the federal government bear?

• How effective are current funding delivery mechanisms—such as 

Public Assistance and CDBG—and should they be modified or 

supplemented by other mechanisms?

• How can the federal government further partner with state and local 

governments and the nonprofit and private sectors to leverage the

public investment in rebuilding? 

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