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Special Report: In Puerto Rico, a housing crisis U.S. storm aid won't solve

From Reuters - February 6, 2018

CANOVANAS, Puerto Rico (Reuters) - Among the countless Puerto Rico neighborhoods battered by Hurricane Maria is one named after another storm: Villa Hugo. The illegal shantytown emerged on a public wetland after 1989s Hurricane Hugo left thousands homeless.

About 6,000 squatters landed here, near the El Yunque National Forest, and built makeshift homes on 40 acres that span a low-lying valley and its adjacent mountainside. Wood and concrete dwellings, their facades scrawled with invented addresses, sit on cinder blocks. After Maria, many are missing roofs; some have collapsed altogether.

Amid the rubble, 59-year-old Joe Quirindongo sat in the sun one recent day on a wooden platform - the only remaining piece of his home. Soft-spoken with weathered skin and a buzzcut, Quirindongo pondered his limited options.

I know this isnt a good place for a house, said Quirindongo, who survives on U.S. government assistance. Sometimes I would like to go to another place, but I cant afford anything.

Villa Hugo reflects a much larger crisis in this impoverished U.S. territory, where so-called informal homes are estimated to house about half the population of 3.4 million. Some residents built on land they never owned. Others illegally subdivided properties, often so family members could build on their lots.

Most have no title to their homes, which are constructed without permits and usually not up to building codes. The houses range in quality and size, from one-room shacks to sizable family homes. Many have plumbing and power, though not always through official means.

(For a Wider Image photo essay on the island's post-Maria housing crisis, see: reut.rs/2EJmIq3 )

The concentration of illegal housing presents a vexing dilemma for local and federal authorities already overwhelmed by the task of rebuilding an economically depressed island after its worst natural disaster in nine decades.

Puerto Rico Governor Ricardo Rossell has stressed the need to build back better, a sentiment echoed by U.S. disaster relief and housing officials. But rebuilding to modern standards or relocating squatters to new homes would take an investment far beyond reimbursing residents for lost property value. Its an outlay Puerto Ricos government says it cant afford, and which U.S. officials say is beyond the scope of their funding and mission.

Yet the alternative - as Villa Hugo shows - is to encourage rebuilding of the kind of substandard housing that made the island so vulnerable to Maria in the first place.

Its definitely a housing crisis, said Fernando Gil, Puerto Ricos housing secretary. It was already out there before, and the hurricane exacerbates it.

In Puerto Rico, housing is by far the largest category of storm destruction, estimated by the island government at about $37 billion, with only a small portion covered by insurance. Thats more than twice the governments estimate for catastrophic electric grid damage, which was made far worse by the shoddy state of utility infrastructure before the storm.

Puerto Rico officials did not respond to questions about how the territory estimated the damage to illegally built homes.

Maria destroyed or significantly damaged more than a third of about 1.2 million occupied homes on the island, the government estimates. Most of those victims had no hazard insurance - which is only required for mortgage-holders in Puerto Rico - and no flood insurance. Just 344,000 homes on the island have mortgages, according U.S. Census Bureau data.

Officials at the U.S. Federal Emergency Management Agency (FEMA) and the Small Business Administration (SBA) acknowledged the unique challenges of delivering critical housing aid to Puerto Rico. Among them: calculating the damage to illegal, often substandard homes; persuading storm victims to follow through on application processes that have frustrated many into giving up; and allocating billions in disaster aid that still wont be nearly enough solve the islands housing crisis.

By far the most money for Puerto Rico housing aid is expected to come from the U.S. Department of Housing and Urban Development (HUD).

HUD spokeswoman Caitlin Thompson declined to comment on how the agency would spend billions of dollars in disaster relief funds to rebuild housing, or how it planned to help owners of informally built homes. Two HUD officials overseeing the agencys Puerto Rico relief efforts, Todd Richardson and Stan Gimont, also declined to comment.

But the disaster aid package currently under consideration by the U.S. Congress would provide far less housing aid than Puerto Rico officials say they need. Governor Rossell is seeking $46 billion in aid from HUD, an amount that dwarfs previous allocations for even the most destructive U.S. storms.

Thats nearly half the islands total relief request of $94 billion.

The U.S. House of Representatives instead passed a package of $81 billion, with $26 billion for HUD, that still needs Senate and White House approval. The money would be divided between regions struck by several 2017 hurricanes - including Maria, Harvey in Texas and Irma in Florida - as well as the recent California wildfires. Congress could also decide to approve additional aid later.

MY MOTHER IS SCARED

A generation ago, Maria Vega Lastra, now 61, was among the estimated 28,000 people displaced by Hurricane Hugo. Neighbors helped her build a new home in what would become Villa Hugo, in the town of Canvanas.

Her daughter, 34-year-old Amadaliz Diaz, still recalls her older brother grinning as he sawed wood for the frame of their self-built, one-floor house, with a porch and three bedrooms.

Now, Vega Lastras roof has holes in it, and her waterlogged wooden floorboards buckle with each step.

Vega Lastra has been staying with her daughter, who lives in Tampa, as the family waits on applications for FEMA aid. The agency initially denied her application in December, saying it could not contact her by phone, Diaz said.

Vega Lastra is returning to her home this week, uncertain if its condition has gotten worse. Her daughter bought her an air mattress to take with her.

My mother is scared, Diaz said. I hope the government helps her. I work, but I have three kids to take care of.

The islands housing crisis long predated the storm. According to Federal Housing Finance Agency data, Puerto Ricos index of new home prices fell 25 percent over the last decade, amid a severe recession that culminated last May in the largest government bankruptcy filing in U.S. history.

Legal home construction, meanwhile, plummeted from nearly 16,000 new units in 2004 to less than 2,500 last year, according to consultancy Estudios Tecnicos, an economic data firm.

A 2007 study by environmental consultant Interviron Services Inc, commissioned by the Puerto Rico Builders Association, found that 55 percent of residential and commercial construction was informal. That would work out to nearly 700,000 homes.

That figure might be high, said David Carrasquillo, president of the Puerto Rico Planning Society, a trade group representing community planners. But even a very conservative estimate would yield at least 260,000 illegally built houses, he said.

Generations of Puerto Rican governments never made serious efforts to enforce building codes to stop new illegal housing, current and former island officials said in interviews. Past administrations had little political or economic incentive to force people out of neighborhoods like Villa Hugo.

Former Governor Rafael Hernandez Colon, in office during Hurricane Hugo, said he tried to help informal homeowners without policing them. Our policy was not to relocate, but rather improve those places, Hernandez Colon said in an interview.

Subsequent administrations advocated similar policies; none made meaningful headway, partly because of Puerto Ricos constant political turnover.

RECOVERY DILEMMA

GIVING UP

330,000 VACANT HOMES

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