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| Louisiana Recovery Corporation
Legislation by Louisiana Congressman Richard Baker to offer financial stability to property owners and to facilitate community rebuilding
Click here to listen to Congressman Baker discuss LRC on NPR and WWL radio.
Read below to learn more about why the LRC is needed, who it helps, how it works:
Why it’s needed
Following hurricanes Katrina and Rita, tens of thousands of property owners in Louisiana face fear and uncertainty about whether they can or should rebuild. For those with mortgages, beginning about December 1st, the 90-day forbearance period most banks granted borrowers before requiring loan payments again will give out, creating additional financial stress. Those who own their property outright also confront realities that insurance and other payments will be insufficient to rebuild, as well as uncertainty over what rights they will retain should their property be condemned.
All seek answers and assurance about what to do. Assisting them will require significant resources, while at present no system is in place to help.
How the Louisiana Recovery Corporation (LRC) will help
On a purely voluntary basis, the LRC will purchase the property from willing sellers, who will receive compensation on their equity, and, if they have one, have their entire loan obligation settled so that they have financial stability to be better able to plan for the future. Moreover, sellers will be provided options for how to rebuild in or return to the neighborhood they call home.
The LRC would then pay for the reconditioning of land and provide the infrastructure improvements necessary for it to be redeveloped, and facilitate the rebuilding of communities by contracts granted through a competitive bidding process.
Who does it help
Whether you live in Lakeview or the Lower 9th Ward, Gentilly or New Orleans East, St. Bernard or St. Tammany parishes, whether you own your home or have a mortgage, the LRC will help set you on your feet again financially as well as offer you the opportunity to be part of your neighborhood again. Protections, options, and opportunities include:
- The legislation will state clearly that the LRC shall have no powers of “eminent domain.”
- For a property owner, if you do not want to talk to the LRC, don’t – nothing will happen to you.
- If you want to sell your property to the LRC, you may.
- If you wish to retain a special option, or “first right of refusal,” to repurchase in your neighborhood, you will have it.
- If you want to be a partner with the LRC in the rebuilding of your property, that’s an option, too.
- All options are determined by the property owner, not the LRC.
- The master plan for how communities are to be rebuilt will be developed through the guidance of state and local officials and the residents themselves, not by the LRC.
How redevelopment will work
Working in concert with state and local officials, the LRC will establish a competitive bidding process that will place a premium on proposals incorporating: (1) use of local suppliers and contractors, and job creation for Louisiana workers, (2) a community-based collaborative planning process, (3) effective land use management, including mixed-use development and historic preservation, (4) commitment of leveraging all pertinent resources and programs to enable broad homeownership opportunity, and (5) commitment of private capital.
The LRC as implementer of Louisiana’s plans
While the LRC itself contains a strong emphasis on urban planning in its structure and its redevelopment process, it is specifically designed not to compete with the urban planning teams assembled by state and local leaders or to make plans itself, but, just the opposite; its purpose will be to use the consensus vision created by state and local planners as a blueprint to pursue a plan crafted by Louisianians themselves. In the end, however, there will still need to be a way by which we bring those plans into reality, and the LRC, then, would serve as a essential funding and implementation mechanism to keep the collaborative process moving forward and make feasible our goals not only to rebuild, but to “rebuild better.”
Funding for LRC responsive to taxpayers
Accomplishing its mission will require the LRC to bring to bear significant investment in Louisiana. However, once enacted into law, the LRC will require no subsequent Congressional appropriations. Instead, the LRC will be funded by bonds of the U.S. Treasury, issued at the discretion of the Secretary of the Treasury. Through the sale of property for redevelopment, the LRC would then utilize the proceeds of private investment toward paying back the bonds.
At present, no other recovery plan exists for channeling the tremendous amount of investment that will be needed to address the issues of destroyed property and community rebuilding. More importantly, no other plan exists that would provide such a level of fiscal accountability and responsibility, through a structure that would go some way toward paying for itself, repaying the American taxpayer, and requiring no “match” from the taxpayers of Louisiana.
How the LRC will be structured
The LRC will establish its headquarters in Louisiana and exist for a ten-year period. It will be governed by a seven-member board of pertinent background and expertise appointed by the President, two of whom will be nominated by recommendation of the Governor of Louisiana.
What you can do
To view the legislation, visit Congressman Baker’s website at www.baker.house.gov -- and if you have questions, suggestions, or wish to express your support for the plan, please contact the Congressman’s office at 225-929-7711 or 202-225-3901. Because time is of the essence, Congressman Baker plans to begin moving the bill through the legislative process quickly with action in the House Financial Services Committee, of which he is a senior member and Chairman of the Subcommittee on Capital Markets, Insurance, and Government-Sponsored Enterprises.
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