Louisiana governor unveils reconstruction plans

LAKE CHARLES, La. — Gov. Kathleen Blanco outlined a $7.5 billion rebuilding, relocation and buyout plan Monday for thousands of residents whose homes remain damaged or destroyed after last year's hurricanes.

It is Louisiana's first comprehensive housing proposal since Hurricane Katrina devastated the Gulf Coast in August, followed a month later by Hurricane Rita.

"In the not-too-distant future, I predict the sounds of hammers and saws will be ringing through all of our communities as our homes are rebuilt," Blanco said.

Assistance would be capped at a maximum of $150,000 per homeowner under the proposal. But direct relief is still months away, and homeowners receiving the aid could be taking on more debt to rebuild.

The draft faces scrutiny from local officials, state lawmakers and the affected residents; and it depends in large part on federal dollars awaiting congressional approval.

But the plan represents a significant step in using billions of already available federal recovery dollars.

About $4.2 billion of the money proposed for the program has been recommended by the White House but hasn't yet been approved by Congress. Any plans for spending the federal aid that Louisiana has received — and any additional housing money appropriated by Congress — would require approval from the Legislature and federal officials.

About 128,000 owner-occupied homes had major damage from the storms and 210,000 more received minor damage, according to Blanco's Louisiana Recovery Authority (LRA).

The Blanco administration plan would provide money to repair or rebuild damaged homes and to relocate people who want to build elsewhere in Louisiana.

For those who don't want to relocate or rebuild in Louisiana, the plan would buy them out at 60 percent of the pre-storm home value.

The program would use a mix of direct grants and home loans, in some cases with no interest and no payments due until the homes are sold or transferred to new owners.

"The priority is to help people return to their way of life, to return to their homes and their communities," said Walter Leger, an LRA board member.