Houston’s Tropical Storm Allison home repair debacle provides warning regarding Hurricane Ike funds

The State of Texas is considering turning over administrative responsibility for $1.3 billion in Hurricane Ike rebuilding funds to local governments. A story in today’s Houston Chronicle offers an especially important warning of potential problems with the past administration of these type of funds by the local government positioned to receive the largest share of Hurricane Ike rebuilding dollars.

Reporter Mike Snyder tells the story of Marsha Farmer, a Houston woman who is disabled. Her home was damaged in flooding by Tropical Storm Allison in June 2001. She applied for help making repairs from a program administered by the City of Houston through a third party contractor. After waiting seventeen months for the repairs to begin she finally received paperwork providing a cost estimate for the repairs the City of Houston had committed to pay for.  What she saw in those papers shocked her.

Quoting Snyder’s story…

The estimate called for enough plywood and shingles to replace her roof twice. She thought this must be a typo, but as she read further, she saw more errors and prices that seemed unreasonably high. Her background as a bookkeeper, along with her childhood work helping her father build barns and stores, prepared her to notice discrepancies others might have missed.

Farmer began asking questions. The answers helped trigger an investigation of overpayments and shoddy work in the federally funded home repair program, and ultimately of the city’s other housing services. The case continues to affect local taxpayers to this day.

Documents Farmer obtained through open records laws and a lawsuit showed that contractors in the home repair program routinely billed the city for excessive materials and for work that wasn’t performed or was done poorly. The documents raise new questions about whether those responsible have been held accountable.

The City Council agreed in November to repay $15.5 million in misspent funds to the U.S. Department of Housing and Urban Development. The city also agreed to reinspect and fix previously repaired houses at an estimated cost of $6.1 million in local funds. …

Two months after Farmer filed her lawsuit, HUD shut down Houston’s home repair program. The agency cited evidence of poor workmanship and “huge differences between the estimates of materials needed and the actual units of materials applied” — the same problem Farmer had noticed in the estimate for her house.

HUD allowed the program to resume the following year, subject to the city’s agreement to reinspect and, where necessary, repair 2,214 previously repaired houses by July 31, 2010. Farmer’s review of 530 reinspection reports — about one-fourth of the total to be performed — identified $717,000 in overcharges.

Eight and one half years after the flood her house still hasn’t been fixed.

The story offers an important insight into the validity of the recent claims by local officials regarding their ability to better administer a program to help survivors of Hurricane Ike rebuild their homes. Before the State of Texas and HUD hand over the $1.3 billion in federal disaster assistance to local governments to administer, Governor Perry and incoming HUD Secretary Shaun Donovan should consider the experience of Marsha Farmer.