MAY 2008 HOT TOPIC

The RAND Gulf States Policy Institute: Building a Partnership To Meet the Region's Needs

The visible destruction caused by Hurricanes Katrina and Rita and the levee failures in New Orleans revealed many of the social, economic, and infrastructure problems that have plagued the Gulf States region for decades. On December 21, 2005, RAND and its university partners joined the region's recovery effort by announcing the formation of the RAND Gulf States Policy Institute (RGSPI). RGSPI is a collaboration between the RAND Corporation and seven Gulf States universities: Jackson State University, Tulane University, Tuskegee University, University of New Orleans, University of South Alabama, University of Southern Mississippi, and Xavier University.

RGSPI is dedicated not only to helping with the immediate needs of rebuilding but also to creating a long-term vision and strategy for a better future for the three states hardest hit by the storms and their aftermath: Louisiana, Mississippi, and Alabama. RGSPI provides evidence-based policy guidance that focuses on key areas, including public health, quality of urban life, education, housing, engineering, and coastal restoration.

To date, RGSPI has produced important studies on a number of issues. It is working with schools to identify traumatized children's mental health needs and the resources required to meet these needs. At the request of the Bring New Orleans Back Commission, RGSPI developed a now well-known methodology to forecast the city's population return. Other studies have focused on improving strategies for recruitment and retention in the New Orleans Police Department and working with the U.S. Army Corps of Engineers and the State of Louisiana to develop strategies for hurricane protection and coastal restoration.

Two recent studies on the critical issue of housing are briefly described below.

Louisiana Homeowners Face Long Waits for “Road Home” Grants

Congress provided more than $8.1 billion to Louisiana to help rebuild housing destroyed by wind and flood damage in the wake of Hurricanes Katrina and Rita. The state established the Road Home program to disburse these funds to eligible homeowners.

Homeowners who applied for Road Home grants faced long wait times. A recent RAND study found that only 31 percent of applicants had received grants by mid-December 2007 (the study's end date for data collection). Of those applicants who did receive grants, about half waited more than eight months. One-quarter waited at least 10 months, and others waited even longer. As of the study's conclusion, thousands of homeowners were still waiting, including some who had been among the earliest to apply.

The study found numerous sources of delay in the grantmaking process. The process itself had many stages, and almost every stage had the potential to contribute long delays. Many applications were sent back through individual stages of the process numerous times. Entire batches of applications were sent back for more work based on errors found in some samples, despite the fact that most of the applications sent back for rework had no errors.

Although there was an initial expectation that applications would be funded promptly, timeliness goals for the individual stages of grantmaking, and for the process overall, were never specified. Program metrics focused on the quantity of activities, not on processing speed. The result was that speed was never used as a measure of performance.

To expedite grantmaking for the many remaining applications, the RAND team recommended focusing on those applications that had become stuck (in some cases, for hundreds of days), establishing time goals for each stage in the process, and encouraging all companies and agencies participating in the grantmaking to work together to remove sources of delay.

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Mississippi Housing Recovery Will Take at Least Three More Years, with an Estimated Cost of $4 Billion

Immediately after Hurricane Katrina devastated the coastal region of Mississippi, Governor Haley Barbour appointed the Commission on Recovery, Rebuilding, and Renewal to determine the extent of the damage and recommend policies to aid recovery. RAND contributed a significant amount of research analysis to the commission, particularly on the issue of the recovery of affordable housing. Following the commission's report, there remained a need to more fully analyze the extent of the damage and the ongoing effects on the housing market, and RGSPI has continued this effort.

The research team found that, although recovery is proceeding, it has been uneven. Recovery has been especially slow in the affordable-housing market. For example, multifamily rentals were severely affected by wind, rain, and flood damage. Almost 80 percent of multifamily units were damaged, and one-third of such units suffered moderate or severe damage (repairs costing more than $50,000).

The storm damage compounded a preexisting shortage of affordable housing. Efforts are under way to expand the affordable housing supply, but the full effects of these measures have yet to be felt. In the meantime, the available supply remains limited—a factor that has likely slowed the overall pace of economic recovery.

Factors slowing the recovery include a slow start, insufficient construction capacity, and inadequate access to financing. Of these, inadequate access to financing is by far the most important. While many sources of financing exist, there are gaps in the funding that they provide. Such gaps are most pronounced for those who were uninsured or underinsured, those whose properties suffered major damage, and those who were landlords—especially those with large, multiunit rental properties.

The analysis indicates that, at the current rate, recovery will take at least another three years, with an estimated total cost of more than $4 billion. For the immediate future, filling gaps in access to financing would probably do more to speed recovery than any other policy action. However, the team also recommended attention to longer-term goals, including limiting damages from future storms through planning and re-zoning, enacting stronger building codes, and developing strategies for better and faster recovery after the next storm.

Read the Research Brief »

Read the Full Document »

The RAND Gulf States Policy Institute (RGSPI) was created to provide a long-term capacity to develop informed public policy in Louisiana, Mississippi, and Alabama. Access to all RGSPI research is available at www.rand.org/rgspi/.

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