NCPA - National Center for Policy Analysis


August 27, 2008

The Federal Emergency Management Agency (FEMA) has paid nearly $3 billion in hotel bills and rental assistance for the victims of Hurricanes Katrina and Rita - by far the costliest emergency housing effort in the nation's history.  On the cusp of the storms' three-year anniversaries, more than 14,000 families remain in FEMA-funded apartments across the Gulf Coast and as far away as Alaska, says USA Today.

The spending continues today because three years of labor and planning across the Gulf Coast has not replaced enough of the homes and apartments the storms destroyed.  The price tag far outdistances housing costs after any other U.S. disaster, FEMA statistics show:

  • The agency spent less than $250 million on housing for the previous six hurricanes combined, according to the U.S. Government Accountability Office.
  • These two hurricanes have caused more than $150 billion in damage and have pushed FEMA to provide temporary housing.
  • The government's total hotel bill for theses storm victims stands at $402 million; the largest hotel bills came in 2006, when FEMA paid $208 million, and this year, with FEMA paying $15 million so far.
  • The agency has spent an additional $2.5 billion on apartments where victims stayed while waiting for their homes to be rebuilt.

The next question for the Gulf Coast is what happens when federal aid runs out?  That's schedule to happen in March, and housing advocates say they fear most of those who depend on federal help will not have anywhere to go.

Source: Rick Jervis and Brad Heath, "FEMA spends almost $3B on emergency housing," USA Today, August 25, 2008.

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