Advocacy groups including the Greater New Orleans Fair Housing Action Center, the NAACP Legal Defense and Educational Fund, and the National Fair Housing Alliance, as well as five African-American homeowners in New Orleans, filed a class action lawsuit Wednesday against the U.S. Department of Housing and Urban Development (HUD) and the Louisiana Recovery Authority (LRA).The suit charges that the LRA's Road Home program discriminates against African-American homeowners in New Orleans.

The discrimination is due to the formula used to determine Road Home grants. Grant awards are based on the lower of two values: the pre-storm value of the home, or the cost of damage (the maximum grant is $150,000). Home values in most predominantly African-American neighborhoods are lower than the values of similar homes in white neighborhoods. In essence, Road Home links the grants to the depressed values of African Americans' pre-storm segregated housing rather than to the cost of reconstruction. As a result, the grants for African Americans end up leaving them without enough money to rebuild. In contrast, white homeowners are more likely to receive grants based on the actual cost of repairs.

"African Americans are facing huge gaps between the amount of their Road Home grant awards versus the cost to rebuild their homes when compared to their white counterparts," John Payton, LDF President and Director-Counsel, said in a press release. The plaintiffs want HUD and the LRA to recalculate homeowner grants using a non-discriminatory formula.