[StBernard] LRA Buy-Outs

[Westley Annis]

	The one thing that will stop people from moving more aggressively to
tear down those houses is probably the LRA program.  The LRA will not give
you any more for a slab than it will for an ungutted, abandoned house.
(Grants are based on the lower of pre-storm value or cost to repair, and for
most, the LRA figures pre-storm value to be much less than cost to repair.)
In other words, people who are going to sell to the LRA have no financial
incentive to tear down their houses.  And once the LRA buys these
properties, I suspect that it will be a long time before anything is done
with them.  Unfortunate, but true.  If the neighborhood is not already on
its way back, the LRA program may, in fact, delay any progress in rebuilding
that neighborhood.  

	As to the decision whether to sell to the LRA or to hold out in the
hopes of a higher price on the open market (see Craig's comments), the
uncertainty of the future housing market in St. Bernard is going to
encourage many to take the buy-out.  No one knows if prices will go up, and
there is a very real possibility that prices may go down, especially in
those areas (oil spill and north of Judge Perez) that are not already on
their way back.  I am concerned that LRA buy-outs may, in fact, depress
prices in those neighborhoods, especially if the LRA is going to sit on
those properties for a while or if the LRA will, at some point, turn around
and sell those properties to developers for very low prices.  Faced with
that risk, an LRA buy-out (a "bird in the hand") will seem attractive to
many, especially to those who were uninsured or underinsured, as their LRA
buy-out grant will be higher.  I suspect that is why many from St. Bernard
have bought homes on the Northshore -- these homes are in more stable
neighborhoods, and there is less of a risk that house values will drop
significantly in the next several years.  To some, it just seems like a
safer investment.  

CK