updated 4/26/2007 1:48:44 PM ET 2007-04-26T17:48:44

The Bush administration announced a $1 billion plan Thursday to extend housing aid for people displaced by Hurricanes Katrina and Rita until March 2009.

Federal housing aid for Katrina evacuees had been schedule to end Aug. 31.

Under the new plan, those people deemed capable of paying rent on their federally funded mobile home or rental apartment will be required to begin doing so in March 2008. Those unable to pay yet will get a waiver.

More than 100,000 households on the Gulf Coast rely on the federal government for housing, nearly 20 months since Katrina struck. About 87,000 households are living in mobile homes and travel trailers, while 33,000 are in federally subsidized rental apartments in New Orleans and out-of-state.

“Many of the people we are talking about don’t have homes to go back to. They have vacant lots,” said Alphonso Jackson, the secretary of the Department of Housing and Urban Development.

‘Trying to kick people out’
Katrina hit on Aug. 29, 2005, devastating a large swath of the Mississippi and southeastern Louisiana coasts, flooding 80 percent of New Orleans. Rita hit southwestern Louisiana and southeastern Texas almost a month later.

“We are doing everything we can to stabilize the lives of people affected by Hurricane Katrina,” Jackson said. “We want everybody who wants to come back home to come back home.”

By March 2008, the agencies will assess each person’s case to determine who is able to pay rent. Rent would start at $50 a month and increase by $50 each month thereafter, officials said. Those unable to pay, such as the elderly, mentally ill and physically disabled, will get a waiver, officials said.

Donald Powell, President Bush’s Gulf Coast recovery director, said extending housing aid will give residents and communities more time to build back the housing stock.

“We’re not trying to kick people out, we’re just trying to get people back to self-sufficiency,” said David Paulison, the administrator of the Federal Emergency Management Agency.

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