A lack of housing is the Gulf Coast’s “number one challenge” on the eve of Hurricane Katrina’s anniversary, the head of the Federal Emergency Management Agency said Wednesday during a tour of the region.

FEMA Director R. David Paulison said the agency is eyeing alternatives to the trailers and mobile homes that are housing tens of thousands of Mississippi and Louisiana residents a year after the Aug. 29 storm.

“In the long run, we need to find a better system than trailers,” Paulison said after addressing a group of elementary and middle school students here. “I think there are definitely viable alternatives to travel trailers and mobile homes. We just have to find them.”

Congress earmarked $400 million for a pilot program to replace trailers with so-called “Katrina cottages,” which are billed as more comfortable, affordable alternatives to trailers. Paulison said states in hurricane-prone areas are competing for shares of that money.

“I’m excited about it. I think it’s the right thing to do,” he said. “If there’s another alternative (to trailers), we’ll surely want to look at that.”

Paulison also defended the agency’s response to Katrina, which led his predecessor, Michael Brown, to resign under intense pressure on Sept. 12.

On Wednesday, House Minority Leader Nancy Pelosi, D-Calif., and her Senate counterpart, Harry Reid, D-Nev., released a report asserting that “thousands of families are still waiting” for FEMA trailers and that a significant proportion of money that FEMA has spent there “has been waste, fraud and abuse.”

Paulison, who said he had not seen the report yet, defended FEMA’s response to Katrina and said the agency is better prepared to respond to another disaster.

“We’ve had some fraud. There’s no question about it,” he said, “but we’ve put things in place to fix that. I’ve had FEMA for nine months now. As issues come up, I’m making sure we fix those and address them.”

FEMA also has improved its communications network and its systems for registering storm victims and finding them emergency housing, Paulison added.

“FEMA took 30 years to get where it is today. You’re not going to fix it all in a couple months,” he said. “However, I think we’ve fixed big pieces of it.”

Before he met with reporters, Paulison answered questions from a group of students at D’Iberville Elementary School. He told them his job is to “fix FEMA.”

“You know why I love my job?” he asked. “Because my job is to help people, and that makes me feel good.”

Many of the children lost their homes in the storm. Trailers at the rear of the school house classrooms for middle school students.

Paulison asked 9-year-old Christopher Moreau, a fourth-grader, how he likes living in a FEMA trailer.

“Kind of not that roomy,” Moreau said. “I’m used to a three-bed house.”

“Things will get better,” Paulison assured the students. “I know you’ll get back in your homes soon.”

Later, Paulison said the slow pace of filling job openings at FEMA is “the only thing I’m not totally thrilled with” as the storm’s anniversary approaches.

“If we’re going to do what people expect us to do, which is oftentimes larger than what we were designed to do, then I need to add more people,” he said. “I’m working with Congress and the White House to do that, and I’m getting a lot of support, quite frankly.”