Millington Mayor Richard Hodges, left, talks with U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan this week.
Photo: Bill Dries

Before the floodwaters of May 1 rose in Shelby County, some homes in the Memphis area were already underwater.

The effects of the recession, including homeowners who owe more than their houses are worth, have complicated what is expected to be a long-term recovery from this month’s floods.

Before the natural disaster came the “man-made” one, U.S. Housing and Urban Development Secretary Shaun Donovan said this week as he and U.S. Commerce Secretary Gary Locke looked at flood damage in the Memphis area.

“A key part of the work that we’ve been doing in the administration is to stabilize the housing market,” Donovan said. “As I think the president often says, we have to be able to walk and chew gum at the same time.”

Donovan announced a 90-day moratorium by all Federal Housing Administration lenders on foreclosures in the flooded areas.

For a more immediate start to the rebuilding process, up to $15 million in federal Community Development Block Grants (CDBG) in the Memphis area may be redirected to relief efforts.

Bartlett Mayor Keith McDonald cautioned Donovan about some long-term fears homeowners have about the funding.

“They were afraid that somehow this was a loan against their house,” McDonald said. “I just hope that as we … deal with those recipients that we do a really good job of explaining that this is not just a way for us to get a lien against your house and then force you out.”

Donovan pledged the Obama administration would work for more flexibility in the use of the CDBG funds and to inform those getting the money that they are grants for as long as the homeowners stay in the houses.

“It wasn’t designed as a program for long-term recovery,” Donovan said. “It needs to be more flexible. I think part of it is history. I think part of it is the program doesn’t have the flexibility it needs to be able to reach folks in ways that makes them confident. That is part of what we’re working on.”

Because the CDBG money has already been awarded to local governments for other projects, it would change some long-term plans by local governments.

“It’s a local community’s decision about what is the critical priority given the disaster that is being faced,” Donovan said. “If Congress determines that it makes sense to appropriate CDBG funding, that would effectively come in and replace the redirected funding going forward.”

Locke, who is a former governor of Washington, recalled dealing with natural disasters. He said flooding was the most difficult type to recover from because of the long-term damage it does.

“We are here for the long haul until all of Tennessee fully recovers,” Locke said, noting that approvals of disaster assistance have been made “in a matter of days” and checks cut for the money in the same period.

As Locke and Donovan made stops at the Ed Rice Community Center, where about 150 of those left homeless by the flooding have been living, it rained for the first time since the flooding. The cabinet members also toured the Memphis Mobile City development that was heavily damaged in the flooding.

Local Homeland Security director Bob Nations briefed Donovan and Locke, conceding the water receded so quickly that at first glance some may wonder what the big deal is. The term among disaster responders is an “elusive natural disaster.”

Big Creek, which runs through Millington, didn’t break through a levee near Naval Support Activity Mid-South base. The high water came over the top in two places. After Big Creek flooded, the Loosahatchie River followed suit.

In the week since the flooding, more than $28 million in disaster assistance for temporary housing, home repairs and other short-term needs has been approved for 42 counties in Tennessee including Shelby, Tipton and Fayette.

Almost 18,000 Tennesseans have registered for assistance.