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City Council urges state to reimburse Road Home recipients who paid grants back

The resolution is in response to a series of reports from WWL-TV, The Times-Picayune | The Advocate, Verite News and ProPublica.

David Hammer / WWL Louisiana Investigator, Richard A. Webster | Verite News

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Published: 4:23 PM CDT April 20, 2023
Updated: 6:08 PM CDT April 20, 2023

The New Orleans City Council voted unanimously Thursday to ask the state Legislature, now in session in Baton Rouge, to reimburse more than 400 families who paid back some or all of their Hurricane Katrina recovery grants to the state after facing legal action for allegedly misusing the money. The state recently forgave thousands of others who had not paid them back.

The resolution, sponsored by District D City Councilman Eugene Green, passed 6-0. It stemmed from a series of stories by WWL-TV, The Times-Picayune | The Advocate, Verite News and ProPublica that showed how the state — under pressure from the federal government, which funded Road Home — sued thousands of its own residents to recover allegedly misused money. 

The stories exposed how Road Home officials acknowledged that  $30,000 grants intended to be used for home elevation were not sufficient to raise houses off the ground on footings. In some cases, officials told the homeowners they could use the money to finish repairs. But residents who used the money that way were later accused of misspending the grants. 

State leaders said they never wanted to sue the residents in the first place, and in February, Gov. John Bel Edwards, flanked by local and federal officials, announced that a deal had been reached with the U.S. Department of Housing and Urban Development, which was demanding the state return misused grant funds to the federal government. The state would use money from a settlement with its third-party contractor and a legislative appropriation. And the suits, which had been widely criticized, would be dropped.

But the deal left out those who had already repaid or partially repaid the state, in some cases taking on barely affordable payment plans or cashing out savings. They would not get any money back.

“Since the money should have never been collected in the first place, it's only appropriate that the homeowners who paid back monies to avoid liens being placed on their homes be reimbursed,” Green said Thursday.

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