NYT Editorial: More Housing Woes in Mississippi

September 27, 2007

As the poorest state in the country, Mississippi should have no trouble finding low- and moderate-income homeowners to share in the more than $5 billion in emergency federal aid funneled into the state after Hurricane Katrina.

But a startling new analysis by a coalition of state and national housing advocates accuses Mississippi of using loopholes in the law to spend far too much on middle- and upper-income households and far too little on those most in need of help.


The Department of Housing and Urban Development, which oversees the program, needs to take a close look at how Mississippi is spending that money.

The aid was channeled through the Community Development Block Grant program, which was set up by Congress in the 1970s to improve housing for the poor and provide a better quality of life and more economic opportunities. The law requires states and localities to spend 70 percent of the money they receive on projects that will clearly benefit low- and moderate-income people.

After Katrina, Congress lowered that requirement to 50 percent for the Gulf Coast states, partly because people at all income levels had lost their homes. That seemed reasonable, given the nature of the emergency.

Low-income housing advocates were rightly uneasy about a second provision that allowed the Gulf Coast states to waive the income test altogether for some projects. They feared that the states would use waivers to reward cronies and boost pet projects. Indeed, Mississippi’s critics now claim that only about 20 percent of the money spent so far has gone to help low- and moderate-income families.

Now Mississippi has floated a proposal that would divert $600 million from the housing recovery effort to a plan to rebuild the port at Gulfport. State boosters want to redevelop the area as a hub for casinos and cruise ships.

The state sees this as economic development. Housing advocates see it as an attempt to hijack money that should rightly be going to build and repair housing for displaced, low-income Mississippians. They also charge that the state has written the rules for its housing aid program in a way that denies help to large numbers of low-income homeowners, who would clearly be eligible under the same post-Katrina program in neighboring Louisiana.

Congress must revisit the waiver process to make sure that states aren’t using it to evade the income restrictions clearly laid out in federal law. And HUD needs to take a hard look at all aspects of the Mississippi program, and make sure that the remainder of the emergency aid money gets to the low-income families who are legally entitled to it and desperately need the help.

The New York Times published this editorial on September 27, 2007.

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