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Associated Press

Feud Brews Over Katrina Housing Funds

Sheila Byrd

JACKSON, Mississippi - A state agency wants to divert $600 million from a Hurricane Katrina housing program to a port restoration project, outraging advocacy groups who say the proposal shortchanges thousands of people still homeless on the Gulf Coast.

The Mississippi Development Authority has proposed taking the money from the $2.25 billion remaining in Gov. Haley Barbour's Homeowners Assistance Grant Program, which is funded by federal block grants. Part of that program is dedicated to low-income and working poor homeowners.0913 05

"It's just unfair," Reilly Morse of the Mississippi Center for Justice said Wednesday. "We've been told affordable housing was supposed to be a priority. Don't rob the displaced to build a port."

Agency officials said there would be enough money in the housing fund to cover about 30,000 homeowners applying for grants to restore or rebuild property destroyed by the storm.

The development authority chose to tap the Homeowner Assistance Grant Program because it had excess funding, Donna Sanford, director of MDA's disaster recovery division, said in an e-mail to The Associated Press.


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The proposal is open to public comment until Sept. 24, and organizations including Oxfam America and the Mississippi NAACP have said they will oppose it. The proposal needs approval from the U.S. Department of Housing and Urban Development.

The $600 million would be used to restore public infrastructure and publicly owned facilities at the State Port at Gulfport that were destroyed during the Aug. 29, 2005, hurricane. It would also improve the operating capacity at the port, Barbour said in a news release.

Barbour said the restoration is "crucial to the economy of our state and essential to the revitalization of the Gulf Coast region."

The port generates about 3,000 maritime jobs and is the third busiest container port in the Gulf of Mexico, said Don Allee, executive director of the Mississippi State Port Authority.

Thousands of families still live in FEMA trailers and affordable rental property is scarce. Roberta Avila of the Interfaith Disaster Task Force said many coast residents haven't recovered because they don't qualify for the governor's housing program.

© 2007 The Associated Press

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