Questions for Road Home Program Administrators
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A Citizens' Road Home Action Team (CHAT) publication. 9/27/2006
[edit] Valuation
[edit] Questions
- Have there been changes in the formulas for determining compensation without public feedback from the neighborhood groups or affected homeowners?
- It is our understanding, based upon reports from Road Home Program (RHP) interviewees, the Road Home Program Advisor's binder, and the Road Home website, that the amount received by the homeowner will be the lesser of either an evaluation of pre-Katrina costs or costs to rebuild to undefined modest liveable standards as determined by the RHP with no specific formula.
- Estimated Pre-Storm Value
- Determined by appraisal completed no more than two years prior to the storm. If an appraisal is not available, then they will use an Automated Valuation Method (AVM) which incorporates real estate information such as comparable sales, property characteristics, tax assessments, and price trends to provide an estimate of value for a given property. If the AVM is not available a Broker Price Opinion (BPO) determines the value. If the BPO is not available, the RHP will conduct an appraisal to determine the estimated pre-storm value. Therefore, appraisals older than 2 years are not accepted. Nor are any post-Katrina assessments that many homeowners got and paid for independently in conformance with the previously posted guidelines for RHP.
- Estimated Cost to Repair/Replace
- Based on the physical evaluation of your home by the RHP. This amount may be different than the amount your insurance company used and the amount you have spent or plan to spend. A Road Home assessor will go to your home (which may have already been demolished and, if not was probably so badly damaged as to give no reflection of its pre-Katrina worth, and decide in consultation with other RHP personnel what they think it should cost to bring your home to modest livable standards within the Energy Star compliant level. No information is given about what will be used to come up with the figure.
- Was there adequate notice of the compensation forumla changes?
- Is there justification and authority to permit the change?
- Why is the lesser of the two values used?
- What was wrong with the old formula?
- (Appraised value x % damage less FEMA and insurance payments. If a home has more than 50% damage according to the City or if FEMA paid its max – the home was considered a total loss. Road Home Grants of up to a max of $150K.)
- What is the modest liveable standard? Are appliances included in this standard?
- There is an apparent contradiction on this matter in the Road Home Evaluator's handbook.
- Why aren't people allowed to submit post-Katrina appraisals done by licensed real estate agents and brokers using pre-Katrina comparables?
- Are pre-Katrina comparables no longer relevant to determining a home's value?
- Could a substantial amount of valuation information be developed from existing data available from pre-Katrina real estate sales?
[edit] CHAT Recommendations
- Homeowners choose one of three formulas:
- a valid appraisal that is less than three years old
- real estate comparables
- minimum (but current) rebuild cost based on an explicit publicized living-area square footage calculation
[edit] Delays in Administration
The LRA is required by state law to carry out its functions to support the most efficient and effective use of resources for the recovery. [http://www.legis.state.la.us/billdata/streamdocument.asp?did=336597 House Bill No. 59, 220.4
[edit] Questions
- Why is the contractor (ICF) requiring interviews with applicants that will cause delays in the distribution of program funds?
- The interviews so far are taking an average of two hours. With up to 120,000 people eligible, that could mean 60,000 eight-hour days' worth of interviews.
- Why are people being subjected to requirements to obtain these needed funds when no such requirements exist for them to file their Federal Income Taxes or SSN Benefits, a much more permanent and constitutionally protected program?
- How many employees will the contractor hire for this work?
- How much training will interviewers receive?
- How much time will this add to the distribution process for payout?
- How was this policy adopted?
- Was there input from neighborhood groups or citizens before the policy was adopted?
- Could applicants present their documents without the necessity of an interview?
- Legal verification could be provided by giving your social security number as well as the documents required for the Road Home Program: Proof of title, mortgage documents, real estate property tax bill, FEMA Claim Number and assistance documents, Insurance policies and payments made for storm damage, SBA loan papers, building permits you may have already secured to repair your home.
- Why is a visit by an estimator required in all cases?
- This may take another two hours per home on average, with additional time required for travel to the site, even if the home was demolished.
- What training and/or qualifications will estimators have?
- How many estimators will be hired?
- What will the estimator add to this process that makes these visits necessary in every case?
[edit] CHAT Recommendation
Interviews with Road Home consultants should be optional, by applicant request. What are the prices like now in New Orleans, in the areas where it did not flood?
