We completed an inspection of the State of Louisiana’s (State) Road Home Elevation Incentive (elevation grant) program funded by HUD Community Development Block Grant disaster recovery funds.  We wanted to know whether homeowners used the funds to elevate their homes as set forth in their grant agreements.  Our inspection covered 199 (about 10 percent) of the 1,906 property owners who received more than $44.4 million in elevation grants during the first round of State funding in 2006 and 2007.

Results of our inspections strongly suggest that the elevation grant program is at risk and could fail to achieve its intended goal of reducing homeowner flood risks from future hurricanes.  Most homeowners had not elevated their homes, even though they received grants of up to $30,000 in 2006 and 2007 to pay toward the construction costs.  Seventy-nine percent of the homes we inspected (158 of 199 properties) were not elevated.  These noncompliant homeowners received grant funds exceeding $3.8 million.  More than 29,000 homeowners have now received taxpayer funded checks totaling $845 million to leverage the cost of elevating their properties.

Robust State oversight and enforcement of grant terms are needed to increase and reduce the risk of program failure.  It is imperative that HUD and State officials work quickly and collaboratively to reduce the incidence of noncompliance in the program going forward.  The State must ensure that monitoring of the grant provides adequate coverage to specifically identify compliant and noncompliant recipients.  Elevation grant recipients that have yet to meet the terms of their grant agreements must be advised to either elevate the subject property or return the elevation grant funds to the State.  Furthermore, program remedies for noncompliance set out in the elevation grant agreements must be enforced starting with recovery, where warranted, of the $3.8 million in grant funds from the 158 noncompliant homeowners in our sample.