Last batch of Katrina cottages up for sale in 9th Ward

20 new "For Sale" signs dot the Lower 9th Ward in New Orleans.

The homes up for grabs are Katrina cottages, manufactured with FEMA money. They're meant to house residents displaced by Hurricane Katrina. But in a joint investigation with our partners at The Lens, FOX 8 uncovered questions about why it's taken so many years to bring the homes to the city.

FEMA trailers were cramped, stuffy and, in some cases, toxic places to live. But tens of thousands of Louisiana residents called them home in the aftermath of Hurricane Katrina.

Then came a welcome alternative, even hailed by acclaimed urban planner Andres Duany -- Katrina cottages.

In March 2006, Duany praised the construction of the cottages, saying, "Everything you see here is concrete -- the exterior, interior and inside is solid insulation. There is nowhere for the water to go."

In 2006, FEMA awarded $74.5 million to Louisiana to build about 500 structures. Many of the pre-constructed homes were sent to Jackson Barracks. Some made their way to Baton Rouge, and others to Lake Charles. But the 9th Ward, an area hit extremely hard by the storm, didn't receive any until January 2012.

Milton Bailey is the former president of the Louisiana Housing Finance Agency, which originally oversaw this program back in 2006.  He explains, "A lot of ideas, while they may sound good at the higher level, when it comes down to really implementing them is when you find that there are some inherent difficulties with them."

While other states like Florida and Texas chose to use their FEMA money to build emergency shelters for displaced residents, Louisiana wanted to think long-term.

Patrick Forbes, director of the state's Disaster Recovery Unit, said, "The Louisiana model was always that the housing we would build would be permanent housing."

Contractors began building the homes off site. Forbes says the state worked with local non-profits to determine where to put the structures.

In 2008, roughly 20 units were built, intended for the 9th Ward. But then they sat on a construction lot, for years. A source with access to the homes says mold and mildew grew inside of them because they sat for so long.

Forbes commented, "Whenever you move a building, certain things happen. When it's stored, like you said, you can get mold.  It's not from design."

According to documents obtained by FOX 8 and our partners at The Lens, the homes had a great deal of work done to them, once they arrived in the 9th Ward. The floors had to be demolished.  Sheet rock and wall insulation had to be replaced.  And the homes had to be treated for mold and mildew.

"We did a cost analysis and we knew that we were going to spend a little extra money to bring these things back up to snuff," Forbes said.

That little extra money turned out to be quite a bit of money. Our documents show the repairs to all 22 homes amounted to more than $300,000. Then, the state had to approve extra FEMA money to accelerate the work, in order to meet a federal deadline.

In all, the project cost an extra $969,236.

"We did a cost analysis of whether it was better to store them inside or store them outside and do the repairs. It proved we would be better off if we stored them outside and then did the repairs that we knew would be part of that process," Forbes said.

Katrina cottages were meant to be an inexpensive permanent alternative to FEMA trailers. The original cost to build all 22 homes was just over $2.3 million. But after the repairs and speeding up the building process, the total bill came to $3.3 million.

Forbes says there was plenty of money left in the FEMA grant to pay for all the repairs. In fact, Forbes says his agency knew ahead of time that they'd probably have to re-do some structures. "We've had to make some adjustments in the budget to make sure that we had every single house in a good livable condition," Forbes said.

The director of the Disaster Recovery Unit does admit the repairs delayed the project, saying it "took longer than any of us thought it would. Certainly we would have liked to have had done them faster, but we'd much rather have them done well."

Forbes says the state met their goal: providing new homes to residents in the 9th Ward.

Jeffrey Hebert, director of the New Orleans Redevelopment Authority, says the need for housing is still strong. "There are many people who are still interested in coming home," Hebert said.

He says people interested in the cottages have to have low to moderate income, in order to qualify. The homes run between $70,000 and $120,000. And both Hebert and Forbes assure us, the increased cost of repairing the homes, will not be passed on to the home buyer.

But the question remains, if it cost nearly a million dollars more to fix the new structures, simply because they'd been left outdoors, what else might that money have paid for?

And if the homes had been built and placed in the 9th Ward sooner, how many more people might have been helped?

According to a spokesperson with the state, all of the money made from selling these 22 cottages goes back to the New Orleans Redevelopment Authority.

So far, two of the 22 units have been leased to purchase.