What's next with Harvey? "Housing" says ex-FEMA head Craig Fugate

Craig Fugate led FEMA, the Federal Emergency Management Agency, for eight years under both President Bush and President Obama. He offered some insight into the response to Hurricane Harvey in an interview with CBS News, in the wake of the deadly storm that has left huge swaths of southeast Texas under water since first making landfall Friday night.

Fugate would not criticize the response to Harvey, saying "every disaster is different." While some have questioned the decision not to order evacuations in Houston, Fugate refused to second-guess such tough calls.

"The problem with inland flooding due to rainfall is there is no way to know where rain will fall. You have to ask yourself, if I start moving these people am I moving them into a greater risk? You may end up with a whole lot of people on a road that is becoming deadly," he said.

Fugate said if it had been a storm surge situation it would have been easier to prepare for, by planning evacuations and predicting how many people would need housing. But he said because it was rainfall it's very difficult to know in advance which areas will get hit hardest. That's because they have maps that identify storm surge areas, but we don't yet have the skills to accurately predict rainfall floods. So Fugate said this may be a "skill" that needs to be developed to meet the need. 

And he added, "If you're not evacuating in sunshine, it's too late."

Fugate also addressed reports that people in shelters did not have enough cots and whether that meant supplies were not positioned well.

"There are never enough cots in shelters. Very rarely do you have more cots than people," Fugate said. He explained the number one purpose of shelters is to provide a safe place, then everything else can be brought in. If you knew where it was going to flood then you would know how many cots to provide. Of course, now it's hard to move supplies physically into the shelters because roads are blocked.

If Fugate were running FEMA today, he said "housing" would be the top priority.

"The primary largest impact on the region will be housing. This could be the largest housing mission FEMA has ever faced," he told CBS News. 

He said if you characterized the lasting impact of the storm, "This will be a housing disaster." 

He likens it to flooding that happened in Baton Rouge last year, but on a larger scale. He also compared it to Superstorm Sandy. "In Sandy we spent a billion dollars in the first 33 days ... in Louisiana we spent a billion dollars in 30 days."

"The grim reality is what is next for these people, the ones who don't have flood insurance. That's like waking up one morning and finding your whole bank account is wiped out and you have no recourse even though you still have a mortgage, still have credit card debt." And he said while many will look to FEMA to fix it, he cautioned that "Congress didn't design FEMA to do it all."

"When the sun shines and people call their insurance agents to file a claim and realize they did not have flood insurance they will realize they are staring into a financial abyss," he said.

Fugate mentioned that those who do not have flood insurance can register for FEMA assistance. FEMA programs can provide a grant for a family up to $34,000, but the average in Louisiana in last year's flooding was between $6,000 and $7,000. "It won't make you whole," Fugate said.

Funds for a hotel/shelter and ultimately a manufactured housing unit (MHU) for temporary housing are not capped. If a family has the financial ability to take out a loan then they can get one from the Small Business Administration very quickly, Fugate said. (The Small Business Administration has a loan program for homeowners and renters in declared disaster areas, even if they're not business owners.)

Fugate mentioned that banks usually do not forgive mortgages — even to those who have lost their home.

"Banks won't forgive loans," Fugate said. "They will extend grace periods, but it's a case by case decision. And sometimes the banks have sold off the mortgage to someone else who's not sensitive to the situation."

Fugate said that there are MHU's for people who lost their homes available through the U.S. Department of Housing and Urban Development. These are larger than the Katrina trailers and meant to be more substantial. They can provide shelter up to a year or more.

Fugate mentioned that since MHU's are larger than the FEMA mobile trailers used after Katrina, that means they are less likely to fit in people's yards. Fugate said FEMA depleted their housing stockpile last year during the Louisiana floods and would need to build back their inventory.

"Sticker shock will kick in," Fugate said referring to the burden on taxpapers once lawmakers know the full cost of buying, setting up, maintaining and disposing of an MHU (which would be $100,000). 

He said one of the things they realized is that spending $25,000 to do relatively minor, quick repairs to get someone back into their house was a better use of taxpayer money and more efficient than spending $100,000 on a MHU. But he said the federal regulations are not set up that way. He said they have done some "expedient repairs" but the regulations are not designed for that.

Overall, Fugate said he estimates the recovery effort in the Houston area could last "years, if not a decade."

"It's not about boats anymore, it's now about mucking out houses," he said.