Discrimination Case Over Katrina Housing Settled

A discrimination lawsuit filed against the federal government and the state of Louisiana was settled this week in favor of homeowners who claimed that the way funds were distributed was biased against the poor.

To date, Louisiana's Road Home program has disbursed nearly $11 billion to people whose houses were destroyed during Hurricane Katrina. In 2008, two housing groups representing some 20,000 African-American homeowners filed a lawsuit, claiming that the program was discriminatory against people with low income.

Campbell Robertson of The New York Times reports:

"The program paid out grants to people based on either the pre-hurricane value of their homes or the estimated cost of rebuilding, whichever was less. Under that formula, the plaintiffs argued, a person who lived in a poorer area was likely to receive far less than someone with virtually the same house in a wealthier neighborhood, even though the cost of rebuilding would be the same."

The plaintiffs agreed to drop the lawsuit after the state announced a new "blight reduction grant adjustment" that provides $62 million in supplement grants to 1,400 eligible homeowners.

Full Story: Settlement Is Reached in Suit Over Katrina Grants

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