Revised damage estimates OK'd

That means the federal government does not seem likely to challenge, at least for now, the city's revision of damage estimates that can have a huge impact on whether a homeowner chooses to rebuild.

The agency's assertion comes just weeks after some officials with the Federal Emergency Management Agency said they had concerns about how the city was changing damage assessments for individual homes based, in many cases, on the owners' preference.

Carl Watts, a FEMA specialist assigned to Louisiana, said Monday that agency officials have since visited New Orleans and now think city officials have acted appropriately in adjusting the damage figures. Typically, homeowners must bring photos and sometimes other evidence, such as appraisals and bids from contractors, to appeal their initial damage estimate. Those materials then become part of the record.

"Homeowners always have the option of appealing their community's (initial) decision," Watts said. "The specialist in charge of compliance visited with (Safety and Permits Director) Mike Centineo, and he seems to be very comfortable with the way the city is doing it."

Crucial to rebuilding

The assessments, expressed as a percentage of damage to the property, can in many ways determine whether a home's owner will have enough money to rebuild it.

If inspectors judge a house "substantially" damaged -- in other words, fixing it will cost more than 50 percent of its pre-Katrina market value -- the home must be raised to the base flood elevation defined by the federal government in order to qualify for flood insurance. Raising a house, particularly one built on a slab, can cost $100,000 or more, making it an unattractive option for many homeowners.

But if the magic damage assessment figure is less than 50 percent, a homeowner may rebuild without raising the house and will be "grandfathered" into the flood insurance program.

The city has issued more than 6,000 residential building permits since the storm, mostly in flood-ravaged areas. In many cases, homeowners have successfully petitioned to have their damage assessments revised downward so they can rebuild at the existing elevation. In far fewer cases, owners of property initially judged to have sustained less than 50 percent damage have sought an upward revision, because FEMA offers grants of up to $30,000 to raise a substantially damaged home above base flood elevation.

City officials said publicly last month that they are trying to help homeowners by being flexible with the numbers, within reason.

"If it is a 'gray zone' call, virtually 100 percent of the time we're going to go in the direction of where the resident wants us to go," Chief Technology Officer Greg Meffert, who oversees permitting, said at the time.

Tinkering feared

The Times-Picayune recently reported on a number of cases in which damage appeared to be well above the 50 percent threshold, but homeowners who appealed were able to secure building permits anyway. FEMA officials told the newspaper then that they had concerns about city officials' eagerness to tinker with the numbers.

"I've never heard of an instance where the officials have indicated up front that they will, in effect, ignore the regulations," said Ed Pasterick, a FEMA official in Washington. "They know full well that the damage was worse than that."

Pasterick said the city could be dropped from the FEMA-administered National Flood Insurance Program if officials fail to enforce the program's regulations. In another unappealing scenario, he said properties with improperly reduced damage assessments could be treated by FEMA as new properties, which in turn could mean much higher insurance rates for those homeowners.

City officials defended their revisions at the time, saying the initial damage assessments -- performed by a private firm, The Shaw Group -- were often inaccurate. They also noted that, in their view, homeowners should be given the benefit of the doubt because the widespread flooding after Katrina was caused not by the low elevation of homes in the city but by the failure of the levee system.

But Monday's statement from FEMA suggests that the agency's worries have been allayed, at least for the time being. Watts said FEMA officials "will continue to visit with the city" to make sure the program's regulations are being met.

FEMA spokesman James McIntyre said the agency sent a team to City Hall that "reviewed records and checked the processes" used to revise individual damage estimates.

The group looked at a number of specific cases to determine whether changing the damage assessments was justified. Team members also did "tagalongs," in which they watched homeowners make their case to a city building official, McIntyre said.

New Orleans Repairs to Damaged Property Update