Sheltering deprivations: FEMA, Section 408 housing, and procedural redesign.

• Author: Williams, Damian
• Position: Federal Emergency Management Agency

Having weathered nearly two years of unprecedented disasters and unrelenting public criticism, the Federal Emergency Management Agency (FEMA) is the most indispensable--and most distrusted--pillar of the nation's emergency management infrastructure. A constellation of well-documented failures, mostly in the wake of Hurricane Katrina, has created an image of an agency adrift. Yet FEMA's role in the Gulf Coast recovery effort has only intensified; the agency is now responsible for sheltering over a million disaster survivors.

Section 408 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act ("Stafford Act") (1) forms the core of the federal government's emergency housing regime. The provision guarantees up to eighteen months of housing benefits for all disaster survivors--regardless of their means--who can demonstrate substantial damage to their primary residence. (2) As the agency charged with administering this program, FEMA has earned stinging rebukes from survivors and lawmakers for erroneously denying thousands of meritorious housing requests while paying out millions of dollars in fraudulent claims. (3) FEMA's mistakes are in part the product of two mutually reinforcing factors. First, the agency's organizational structure relies heavily on a combination of contract and temporary employees to conduct housing inspections that determine benefit eligibility. (4) Second, with survivors scattered across the country and unable to attend FEMA inspections, many claimants have been forced to rely on FEMA's sometimes cursory, and potentially erroneous, ex parte conclusions.

FEMA has also proven incapable of communicating the reasons underlying its eligibility determinations. Unable to decipher the grounds for benefit denials, some hurricane survivors with valid claims have failed to take advantage of FEMA's appeals process. (5) And although a dedicated cadre of volunteer lawyers has helped survivors navigate the section 408 process, its ranks are limited and its time spread thinly among the myriad legal issues associated with Hurricane Katrina. (6)

FEMA's recent troubles foreshadow what will likely occur when future catastrophes, natural or man-made, stretch the agency's capacity and thrust countless citizens into the unfamiliar role of government dependents. In response, administrative law scholars should consider ways to insulate this unique class of beneficiaries from the consequences of agency failure.

After describing the section 408 program in Part I, this Comment offers two positive procedural reforms to reduce the incidence of erroneous emergency housing deprivations. The first proposal, outlined in Part II, calls on FEMA to grant an in-person hearing to any section 408 claimant who wishes to challenge the agency's eligibility determination. The second proposal, presented in Part III, seeks to make this adjudicatory process more effective and to further reduce agency error by awarding attorney's fees for successful section 408 appeals. I conclude by asking Congress--which is led by some of section 408's fiercest critics (7)--to amend the Stafford Act to incorporate these procedural redesign proposals.

1. THE MECHANICS OF SECTION 408 HOUSING

   Shuffled from makeshift camps to hotels and motels and finally to mobile homes and subsidized apartments, Katrina survivors have endured a long road toward normalcy--one made more difficult by FEMA's inadequate administration of section 408. This Part briefly describes the standard process used to determine emergency housing eligibility and the problems FEMA experienced in meeting its statutory mandate after Katrina.

   To qualify for section 408 assistance, an applicant must: (1) have incurred uninsured (or underinsured) damage in a federally declared disaster area; (2) be a citizen or legal resident of the United States; (3) have resided in the damaged home at the time of the disaster; and, most critically, (4) be unable to access or live in the home because of disaster damage. (8) Once an applicant contacts FEMA for assistance, the agency arranges for one of its contract or temporary employees (who often operate out of FEMA's Disaster Recovery Centers) to meet with the survivor at her home and to perform an inspection to determine the extent of damage, (9) If, after inspection, an applicant is accepted into the program, she receives a check from FEMA covering the cost of either an apartment or a mobile home. The agency also requires a beneficiary periodically to recertify her "continuing need" (10)--presumably an antifraud mechanism designed to ensure that disbursed funds are not being used for nonhousing expenditures. If rejected, an applicant must be told the grounds for the denial and can appeal the decision by writing a letter to the agency stating why she thinks the decision is incorrect. (11) FEMA then reconsiders the application before making a final determination.

   In the case of Hurricane Katrina, the application process was beset with severe confusion and repeated accusations of erroneous housing denials. (12) FEMA was twice haled into federal court for failing to provide adequate notice of the grounds for its housing determinations. (13) The agency also had considerable difficulty adjusting to the human displacement caused by the disaster. (14) Specifically, because Katrina scattered victims across the country, many applicants were unable to return to their homes to accompany FEMA employees during the inspection process. (15) Without the applicant or her designated agent present, FEMA could only inspect the exterior of the house, thus remaining ignorant of any interior damage. (16) While it is impossible to determine the precise rate of agency error, one report tracing FEMA's section 408 stewardship documented a 50% error rate in a sample of approximately 12,ooo housing denials. (17)

   Anecdotal evidence from section 408 claimants paints an equally sobering picture. Some survivors have complained that FEMA has cancelled scheduled inspections, adding to the time applicants must wait to transition into stable housing. (18) Others have noted FEMA's curious, but seemingly widespread, pattern of denying housing damage in areas that the agency's own geospatial mapping showed...