HOUSTON -- Local 2 Investigates has uncovered millions of dollars worth of FEMA-funded homes are not being used for victims of Hurricane Ike or anyone else. Instead, our investigation found these homes just sitting inside a Houston warehouse.

It all centers on a $16 million federal project paid for by your tax dollars. While victims of Hurricane Ike still wait for help, the state of Texas and a local congressman say FEMA is to blame again.

If you take a drive down Pruitt Street in Galveston, you'll still see homes destroyed by Hurricane Ike and others houses that are just starting to be repaired. But five months after the storm, what you won't see are many of the neighbors who used to live there.

"There's nowhere for them to stay," said Peter Ochoa, a construction worker on a job in Galveston.

Ochoa's father-in-law can't live in his damaged Galveston home, and he can't find temporary housing anywhere on the island.

"There are no houses down here to rent because they're all rented up. There are no apartments. There's no anything," he said.

Ochoa's family isn't alone. It's no secret temporary housing in or near Galveston neighborhoods are hard to find.

But inside a warehouse in northwest Houston, dozens of new, fully furnished, modular homes sit ready and waiting for victims. Your tax dollars paid for them -- almost $3 million and counting. It's all part of a FEMA hurricane housing project that Local 2 investigates discovered has yet to give a home to any family.

"Sometimes I like to say FEMA is the disaster," said U.S. Rep. Ted Poe, who represents Houston, Beaumont and other areas of southeast Texas. "This is the perfect example."

"It's hard to tell a family that's living in a car or living in a tent or still remaining in a shelter four or five or six months after a storm that they should be patient," said Michael Gerber, executive director of the Texas Department of Housing and Community Affairs.

For the state of Texas, patience has about run out on a FEMA project that began several hurricanes ago.

After hurricanes Katrina and Rita hit Texas, Louisiana and Mississippi, tests found high levels of formaldehyde inside thousands of FEMA travel trailers given to victims.

In 2006, Congress gave FEMA $400 million for a pilot program to find alternatives to the troublesome trailers. As part of the Alternative Housing Pilot Program, FEMA then allocated $16 million for Texas to test a home design developed by the Heston Group.

"It's essentially a house in a box," explained Gerber.

Gerber says the "Heston homes" come pre-built and can be put up on a location in around eight hours.

Once the homes have served their purpose, crews can break them down, put them in a shipping container and can store the homes until the next disaster.

Similar modular housing developed by the Heston Group has been used by U.S. military in Iraq.

"Our hope was that we were going to be able to build 125 or 150 of these homes," said Gerber.

But more than two years after the FEMA pilot program began, not one family has moved into one of these homes in Texas.

"The problem with the product is frankly the hoops you have to go through to get the product on the ground," said Gerber.

Not only did it take a year just to negotiate the contract to begin the project, the state says the trouble started when FEMA required environmental and historical preservation testing for every property.

Many victims from hurricanes Rita and Katrina had home locations that did not meet FEMA's rules.

Then Hurricane Ike hit Texas. The state asked FEMA if it could send the Heston homes waiting in a warehouse to Ike victims in immediate need.

FEMA wouldn't allow it -- saying the program was designed to test the Heston homes with Rita and Katrina victims. FEMA said the homes were not meant to be used for new disasters.

"FEMA was really caught flatfooted again," claims Gerber. "There seems to be no reason why you shouldn't be able to move forward quickly to help that family in need."

At one point, 8,000 families were without a home in Galveston. That number doesn't include families on other hard-hit areas like the Bolivar Peninsula or Chambers County. While the homes in this pilot project would not have solved the problem, government officials and victims in the disaster areas told us the homes sure would have helped.

"It makes no sense at all to me," said Jodi Mitchell, a construction worker in Galveston. "None at all. I don't understand it. Actually, it kind of infuriates me because I see a lot of people who need help."

Rep. Poe says our investigation shows FEMA does not understand "the way the world works."

"The bottom line is there are people who don't have homes to live in," Poe said. "FEMA has the homes. The state of Texas has the money to buy those homes. The construction company is ready to set them up in just a few hours. And FEMA doesn't understand the letter 'e' in FEMA is for emergency."

FEMA declined our request to answer questions on-camera about the project.

A high-ranking official did tell us Texas and Gerber knew all the rules going into the program. That official said a city in Alabama and the state of Mississippi have already completed their projects under the same FEMA alternative housing pilot program with the same rules.

A FEMA source says the law passed by Congress mandates victims of hurricanes Rita and Katrina get first shot at the homes.

Ike victims could only be considered after those previous victims had an opportunity.

Despite any delays, FEMA says the project in Texas is still on schedule. Monday, FEMA representatives said the first "Heston home" could be deployed in two weeks to a family in east Texas.

Governor Responds

Gov. Rick Perry's office responded to our investigation by calling on FEMA to do more to help victims of Hurricane Ike with their housing needs.

"We need to be using every safe option out there to get housing for these storm victims," said Katherine Cesinger, deputy press secretary for Perry. "While we understand there are burdensome requirements to this program, the federal government should have some system in place by now to meet the housing needs following a disaster. The hardest part about the current situation is that you can’t possibly explain to a Galveston resident or other Ike victim that they aren’t eligible for this emergency housing because of a process. All they know is that there is a warehouse full of homes nearby and they don't have a place to live."

More Information:

FEMA Response