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The $600 million now going to the port was originally allocated for the state's housing assistance program, which provided money to families who lost property to Katrina's storm surge.

Katrina Housing Aid to Be Used for Port

JACKSON, Miss. -- The federal government has approved Mississippi's plan to divert $600 million in hurricane housing funds to a port improvement project, angering critics who say tens of thousands of people made homeless by Hurricane Katrina still need help.

In a letter to Gov. Haley Barbour (R), Housing and Urban Development Secretary Alphonso Jackson said on Friday that he is concerned about using the housing money for the port project, but that congressional language associated with the use of block grant funds "allows me little discretion."

Mississippi plans to restore public infrastructure and publicly owned facilities at the State Port at Gulfport that were destroyed by Katrina, and to improve the port's operating capacity.

Katrina left the Gulf Coast in tatters in 2005, and many who fled the region have yet to return. Property, rental and insurance rates have soared since the storm. Barbour announced on Tuesday that the state would devote an additional $100 million toward affordable housing.

Mississippi received $5.4 billion in federal hurricane-recovery funding. The $600 million now going to the port was originally allocated for the state's housing assistance program, which provided money to families who lost property to Katrina's storm surge.