"We have a crisis of homelessness," said Vicki Judice of Unity of Greater New Orleans, a network of agencies that helps the homeless.
"People are coming back who were poor, who are still poor, and the rents have doubled," she said. "So they can afford to move in, but they can't keep up with the rent and they're getting evicted."
Judice said higher insurance costs are squeezing fewer landlords, who are passing the cost on to renters. An estimated 12,000 people are homeless, up from 6,000 before the storm, according to Unity.
Sen. Mary Landrieu, D-La., has been pushing the Senate for more than two years to provide additional relief to the Gulf Coast. She said the money will help a few thousand in New Orleans, but is angry much needed money for hospitals, police, and flood prevention was cut from the final bill.
"This bill provides a foundation for some of the remaining recovery needs on the Gulf Coast, but the task is not complete," Landrieu said. "The House of Representatives unfortunately caved to White House demands and cut critical funding the Senate had passed."
President Bush is expected to pass the legislation, largely because the provision is attached to an almost $200 billion war supplemental bill that will fund the war through the first month of the next president's term.
Homeless Shelter Struggles to Stay Open
Late last year, Unity helped find apartments for roughly 300 people living in an encampment in New Orleans in Duncan Plaza, in view of City Hall.
Many of those people are now in subsidized apartments, but others have flocked to fill several blocks under a highway overpass near the French Quarter.
Others are living in shelters that are struggling to stay afloat financially after Katrina. Shelters financed by private donations won't benefit from the money appropriated by Congress this week.
The New Orleans Women's Shelter houses 20 women and six children, including Bowden's 3-week-old son. But with a weekly budget of $350 and one paid staff member, it has been forced to turn away many women who need help, including women fleeing abusive situations.
"It's amazing how many women come into our shelter who have been living in cars, in sheds, in gutted-out homes, with children who have gone days without eating," said Jackie Silverman, executive director of the New Orleans Women's Shelter.
Silverman, who opened the shelter in October 2007 after another women's shelter closed, said she may have to shut down the facility in February if the shelter doesn't get an infusion of donations from the public. The money she has received, mostly from a Jewish congregation in New Orleans, is dwindling.
"Because of Katrina, spouses and partners have gone to drinking, and lost jobs and rent has gone up, and so housing is out of control so there's a desperation that people feel," she said.
Tijuana Bowden, 28, a single mother of two, has been living in the New Orleans Women's Shelter in the Upper Ninth Ward for seven months.
Before the storm, Bowden lived in a small apartment and worked at a hotel. But the hotel didn't reopen after the storm. Out of a job, she lived with family out of state until her aunt told her about the women's shelter.
"Most of the shelters, they're so filled up and you have to actually be working because you have to pay to actually live there, so I don't know what I would have done," Bowden told ABC News in a telephone interview from an office in the women's shelter.
"They've provided me with diapers and clothes for my son, and helped me with childcare for both of my kids," she said. "Right now I'm looking for work, sending out resumes so I can get my feet in and actually get my own place."
Silverman, who recently made a trip to New York to see if she could find additional funding for the shelter, said she'd like to hire a professional counsellor who could help the women find jobs and childcare. But right now, she's just trying to keep her shelter running.
"Homelessness has a different face to it now,people who hae never been homeless before are suddenly in desperate need of help," she said, "This had existed before the storm, but it's exploded post-Katrina."