Sale of 'Katrina' caravans sparks a new storm

Published on Friday 9 March 2007 03:45

A PLANNED sale by the US government of thousands of mobile homes used as emergency accommodation in the wake of Hurricane Katrina is raising fears among dealers that the auction will ruin the market.

Dealers say some potential customers are waiting to get a used Federal Emergency Management Agency (FEMA) caravan rather than pay up to $40,000 (20,000) for a new one.

"People think they're just going to get to buy them for nothing," said Gale Crews, a dealer in Hope, Arkansas, where FEMA is storing 20,000 trailers at the city's airport.

FEMA spent $2.7 billion on 145,000 mobile homes and caravans after Katrina struck in autumn 2005. It now has 60,000 in storage nationwide, thousands of which were never used.

Critics say FEMA ordered more than it needed and is about to double-cross trailer dealers.

But the agency says it will sell only those that suffered wear and tear from storm victims; it plans to keep the unused ones.