Brad Pitt foundation agrees on $20.5m settlement to owners of faulty post-Katrina houses

It sounded like a dream come true, complete with a handsome prince riding to the rescue: the construction of 109 new, sustainable, flood-proof and affordable houses in New Orleans’s Hurricane Katrina-ravaged Lower Ninth Ward, all thanks to movie star Brad Pitt.

But the houses that were built fell far short of Pitt’s 2006 promises: they were plagued by mold, electrical fires and unclean water.

On Tuesday, 13 years after Hurricane Katrina victims started moving into the buildings, Pitt and his foundation agreed to a settlement that will pay $20.5m to homeowners whose properties began to deteriorate almost as soon as they bought them.

The residents filed the lawsuit against Pitt and his charity, Make it Right, in 2018, after the now defunct charity allegedly ignored their complaints and then vanished as the houses continued to decay.

The proposed settlement has led to “tears of joy” among the long-suffering flood victims, Ron Austin, the lead attorney in the class action lawsuit, told the Guardian. “You’re talking about a group of people who didn’t have an option to move and buy or rent a second home. This was their life savings and they were living in something that was deteriorating quickly around them. So they’re relieved and grateful.”

All the money in the settlement will go to the renovation and repair of the houses, Austin said. “There won’t be any windfalls in individuals’ pockets.”

Global Green, a Brad Pitt-linked environmental non-profit that was not named in the lawsuit, said in a statement that it had agreed to provide $20.5m to “fund a program to rectify defects in the original as built conditions of homes” and to “resolve the litigation”.

“I am incredibly grateful for Global Green’s willingness to step up and provide this important support for the Lower Ninth families,” Pitt said in a statement. “We collaborated in the early days post-Katrina and we are very fortunate to have Global Green’s generous continuing commitment to help address the challenges around these homes and others in need.”

The proposed settlement was filed in the civil district court for the parish of Orleans and is awaiting judicial approval.

Pitt announced the Make It Right project to great fanfare in 2006. The plan was to hire a cast of famous architects to build flashy, environmentally sustainable houses at the center of Hurricane Katrina’s catastrophic flooding, and sell them to flood victims below cost – starting at $150,000. The Hollywood icon boasted that the houses were “a proof-of-concept for low-income green building nationally, maybe even worldwide”.

But that dream quickly fizzled. The eye-catching architecture was ill-suited to the torrential rainfalls of New Orleans: some of the houses had flat roofs and were missing basic features like rain gutters, overhangs, covered beams and waterproof paint – causing mold, leaks and rot soon after they were built. While Pitt’s charity initially made repairs, residents say the firm forced them to sign non-disclosure agreements, before cutting off contact and disappearing altogether. That left the residents – many of them low-income first-time homeowners – trapped in their decaying homes yet unable to sell.

Pitt has long denied responsibility for the debacle. A source close to the actor told the Guardian in February that “Brad got involved at the beginning to help the people of the Lower Ninth Ward, and obviously it was upsetting to see what had happened once he had stepped back from the project and others took over.”

Austin said that despite years of anguish, many of the homeowners have never stopped admiring the actor.

“They were not happy that it seemed he was trying to get out of his obligations. Obviously, when someone makes you a promise and you believe in them, and when they try to walk away from that, you’re going to be disappointed,” he said. “But they were never not fans of Brad Pitt. He’s an icon of a guy.”

• This article was updated on 18 August to add comment from Brad Pitt and Global Green.