ZXF Adam-MSTR Louisiana’s Case for Additional $4.2 billion in CDBG Funds March 9, 2006

1 FUNDS REQUIRED TO MEET THESE OBJECTIVES IS $12.1 BILLION Provide for owner occupied housing needs Provide for rebuilding of affordable workforce rental housing Provide for critical state and local infrastructure needs Provide for economic development programs to spur job growth Cost $ Billions Objective

2 Louisiana has a large unmet need for housing assistance and recovery. Safety is the highest priority of Louisiana’s housing recovery. The $4.2B is imperative to build back safely and responsibly. Total housing need is $7.5B (current $3.3B + $4.2B gap)

3 Program element Uninsured with major/severe flood damage Homes COST TO RETURN HOMEOWNERS SAFELY TO HOMES IS $7.5 BILLION Cost Estimate Source: FEMA, SBA, NFIP Cost/ Home Major damage; no mitigation required (10% of major)1.4k$0.1B$76k Damage plus build-in-place mitigation ($40k) not to exceed pre-storm home value (60% of major) 8.3k$0.9B$116k Buy-out at pre-storm home value (100% of severe, 30% of major) 25.2k$3.6B$144k Insured with major/severe flood damage Allowance for mitigation (60% of major)16.0k$0.9B$55k Allowance for buy-out (30% of major)8.0k$0.3B$19k Allowance for buy-out (100% of severe)40.1k$1.3B$32k 34.8k$4.6B$135k 66.8k$2.5B$37k 101.6k$7.5B$74k Owner-Occupied Housing Program Damage only (10% of major)2.7k$0.0B$15k Support and Admin Costs (Intake & counseling, design & construction fees, survey & appraisal, Title transfer and other fees) 101.6k$0.4B$5k

4 SUPPLEMENTAL $4.2 B IS NECESSARY TO REPAIR/ REBUILD SAFELY TO PREVENT FUTURE DAMAGE Safety is critical to rebuilding so as not to put people back in harm’s way LRA mandates that federally-funded recovery programs must follow safety requirements including: The latest FEMA Base Flood Elevation Advisory Guidance, before they are official and approved New state home construction codes (in compliance to the International Building Code) Risk-reduction spend may include elevations, buyouts, cost to build to new safety codes, hurricane shutters, clips and other risk-reducing measures Costs for buyouts for safety purposes are estimated at $1.8 B to prevent future loss of life and property Risk reduction costs for safety under the Repair and Rebuild programs are estimated at $2.4 B

5 The Road Home Housing Program Options for Dealing With a Damaged Home Buyout/Relocate LA Contributes 100% of Pre-Storm Value to Cost of An Equivalent House In Designated Area; Affordable Loans for gaps Sell LA Offers 60% of Pre-Storm Value to those who Choose Not to Repair, Rebuild or Relocate in LA Rebuild LA Contributes Pre-Storm Value to Cost of An Equivalent House on Same Property; Affordable Loan Covers Any Any Gap Repair LA Contributes Up To Pre-Storm Value; Affordable Loan Covers Any Gap In all cases, assistance will be capped at $150,000, and will be decreased by insurance and FEMA repair aid. The assistance (based on total needs) will further be reduced if the original property should have carried insurance and did not.

6 Over ¾ of the Major and Severe Flood Damage Occurred in Louisiana Over half of Louisiana’s major damage and severe/destroyed is categorized as severe or destroyed (52%) – This is more than double the rate of severe/destroyed of any other state. In addition to the higher number of units… the average cost of repair will be higher. 1%2%77%20%0%

7 Louisiana had more than 5x the destroyed owner occupied and rental housing units Louisiana had well over 5 times the severe / destroyed housing units of Alabama, Florida, Mississippi and Texas combined Severe / Destroyed is most costly requiring a rebuild or buyout

8 Hurricane Impact on Housing – By the Numbers  Louisiana had over twice the major and severe damage to housing stock than Alabama, Mississippi, Florida and Texas combined  Louisiana had more than 3 times the major and severe damage to housing stock than Mississippi  Where the other states had anywhere from 6 to 25% of their major and severe damage categorized as severe / destroyed; in Louisiana, over half of the major and severe damage in Louisiana is categorized as severe / destroyed  In the three hurricanes, the Gentilly neighborhood in New Orleans had more housing damage than the entire State of Texas; the New Orleans neighborhood of Lakeview had more than twice the damage of the entire State of Alabama  In the rural, Southwest Parish of Cameron, where the eye of hurricane Rita made Landfall, 46% of the housing units in that Parish were categorized as severe / destroyed. Another 26% had major damage

9 Need for Workforce Housing Assistance Is Significant More than half (51%) of all rental unit damage from hurricanes Katrina, Rita and Wilma occurred in Louisiana– more than Alabama, Florida, Mississippi, and Texas combined. Rental units were a major source of housing in Orleans Parish, with over 53% of the population living in rental units: 1/3 of units were single family homes 1/3 of units were located in structures with two to four units 1/3 were located in traditional multifamily housing. Orleans Parish Pre-Katrina Rental Units, by Type Pre-Katrina Units Single Family33,000 Doubles19, , ,000 Misc.4,000 Total Occupied100,400 Total Damaged70,000

10 85,000 LOWER-WAGE JOBS HAVE BEEN LOST… WILL NEED WORKFORCE HOUSING TO REPLACE THEM 83, ,100 Lower- wage industries Higher- wage industries Lower-wage Industry Annual wage (2004) Labor shortfall (Dec. ’05) Building construction$23k3,800 F&B (retail)$22k6,300 Health & Personal$16k1,800 Gasoline (retail)$17k500 General merchandise$22k2,900 Admin & support$32k11,300 Nursing/residential care $33k11,100 Social assistance$35k7,500 Entertainment$15k3,900 Accommodation$16k13,100 Food service$15k21,400 83,600 Share of job losses by wage level December 05 vs. 04 Source: Louisiana Department of Labor

11 Number of residents employed (Thousands) 1,696 1,670 10/ % 1,936 08/0509/05 Source:The Brookings Institution, Katrina Index (Dec 2005) MORE THAN 5x AS MANY LOUISIANANS LOST THEIR JOBS 1, % 10/05 1,091 09/05 1,084 08/05 Louisiana has 5x the increase in unemploy- ment experienced in Mississippi LAMS 236k increase in unemployment 46k increase in unemp- loyment Metro New Orleans experienced 207k of statewide increase (34% of area employment)

12 Total businesses affected by Katrina or Rita 1, ,752 LA 1, ,912 MS TX AL Limited Moderate Extensive Catastrophic TEN TIMES AS MANY BUSINESSES WERE DESTROYED IN LOUISIANA THAN IN ANY OTHER STATE 20,544 4,793 Source:Census website; Census approximations based upon FEMA affected areas xN/A

13 Summary of $12.1 billion program needs The supplemental $4.2B is essential for the restoration of housing in Louisiana in a safe and secure way Louisiana’s unique post-hurricane challenge is rebuilding where levees failed Unprecedented amount and severity of destruction in Louisiana compared to other Gulf states We need housing to bring our people back and support our industries both as workers and as customers. Louisiana can not implement a viable housing plan without adequate, equitable funding Without the ability to provide housing, community redevelopment, and jobs for its citizens, Louisiana cannot recover