Sunday, February 05, 2006

Rebuilding New Orleans: Competing Visions


In the wake of the State of the Union address, there was a flurry of activity which brought into sharper focus the competing visions on how to rebuild New Orleans and southeast Louisiana generally. There was a sharp negative reaction in Louisiana to the State of the Union because President Bush said so little about Hurricane Katrina and its aftermath. He did not recognize those American citizens who died or those who had risked their lives to save thousands. He did not reaffirm his September pledge to rebuild New Orleans. Instead, he referred to the total amount of money that has been authorized by the federal government so far – $85 billion. In Louisiana, we are heartily sick of hearing this figure.

First, this is money authorized, not spent. Second, it is for all the states affected by Hurricanes Katrina and Rita, not just Louisiana and certainly not just New Orleans. Third, about $20 billion is for tax credits, mostly for business, which are of dubious value given the most substantial problem facing the state – housing. Fourth, a substantial fraction of the money goes to FEMA simply to pay the ordinary expenses of running the agency. Fifth, the rest is largely devoted to three necessary, but not very productive, items: (1) picking up debris; (2) fixing some important infrastructure like bridges and roads; and (3) temporary housing. The last point is important. What New Orleans and Louisiana need is a solution to the problem of the vast number of destroyed and damaged permanent housing, not temporary trailers (which, for New Orleans, haven’t arrived yet). And eventually New Orleans in particular will need some funding to make any local plan happen.

Today’s New York Times says the mayor’s plan has been abandoned, but I see no evidence of that. True, building permits are being handed out not in accordance with the plan, but it was never very likely that they would be suspended. The mayor’s Bring New Orleans Back Commission finished submitting a fine set of reports last week (available on the web) and the mayor will announce what parts he accepts or rejects shortly. The main point is that any local plan will require federal funding. So far, the federal answer has been roughly $6 billion in Community Development Block Grants. These are basically all-purpose grants to the state. This is almost certainly not enough to fulfill Bush’s September pledge.

Hence the flurry of activity last week. The Bush administration touted the CDBGs and trashed the comprehensive solution sponsored by Representative Richard Baker. The basic difference between these approaches is that the most the CDBGs can provide is a small grant to homeowners, while the Baker bill provides up to a 60% return on equity, a chance to buy back the redeveloped property and, most important, a chance to redevelop whole areas of the city rather than depend on the actions of outmatched homeowners. So far, the alternative to the Baker bill appears to be mass foreclosures, no chance at any comprehensive plan, and a terrible plague of housing blight. This issue may come to a head at a February 15 Senate hearing scheduled on the Baker bill.

The worst part of the Bush administration’s rejection of the Baker bill has to do with the claim, made in a Washington Post editorial by Donald Powell (the administration’s Katrina coordinator), that it was a heavy-handed federal solution to a problem that must be solved through comprehensive plans adopted by state and local government. In fact, the plans put forward by both the mayor of New Orleans and the governor of Louisiana explicitly depend on the enactment of the Baker bill. Indeed, the Urban Land Institute that assisted the mayor’s well-qualified commission endorsed the Baker bill and the plan of the mayor’s commission cannot go forward without it. In other words, by rejecting the Baker bill, the Bush administration bypassed the state and local plans as developed so far and made them irrelevant. So a truly “federal” coordinated response to the massive tragedy of Katrina has been made impossible. The Brookings Institution reported on February 1 that:

"Hundreds of thousands of households continue to face major obstacles restarting their lives. Nearly 750,000 households remain displaced by Katrina, of which about 650,000 are receiving rental assistance, or about $800 a month. Mortgage delinquency rates skyrocketed between the second and third quarter of the calendar year. In the state of Louisiana, for instance, nearly one out of every four loans is now 30 or more days past due."

So far, the Bush administration has no solution to this problem.


a few words from a former resident of new orleans.

it pains me to see what has happened to the city and the residents. the response of elected officials at all levels pains me even more.

my family and i had thought of going to new orleans for mardi gras, simply to show our support for the city and friends of ours who remain there. aside from the issue of lack of hotel rooms (most appear to be still tied up by FEMA), in speaking with these friends, i was told not to come. as much as they want mardi gras to go off and to reap whatever economic benefit it may bring to the city and region, i am told by them that there is very little to see in the city right now. the french quarter is back in business. most of the garden district is up and running. the problem is the lack of residents moving back due to the slow rebuilding process. as a result, few schools, few stores, and very few businesses outside of the traditional tourist areas are open, almost none into the evening.

the locals i have spoken to reflect the anger simmering below the surface in steve griffin's post. while they blame the mayor and the governor for their inept response in the planning and immediate aftermath of katrina, the overt anger at the bush administration is something i have not seen in quite a while. those i have spoken with offer the opinion that there is no plan to reconstruct the city; only photo ops for the president. as steve pointed out, it is one thing to make a speech, and talk about money authorized. it is another to actually have a plan, and put forward some tangible effort to rebuild. the locals do not believe there is any plan, and further believe that the only tangible efforts of the administration to date are to block any real plans, such as the baker plan, to do anything.

as for the locals, hang in there guys. we are with you. as for the politicos, it will be more than interesting to see how this translates in the polls over the next election cycle.

C'mon, Stephen, you don't really see the rebuilding of New Orleans as being this complicated, do you?

As long as Karl Rove heads up Bush's Gulf-coast rebuilding effort, nothing will happen in New Orleans that allows a deeply Democratic city to rise again.

It's that simple.

Rebuilding the city isn't that complicated, perhaps, but however politically necessary it is to make noises about doing it, it's a remarkably stupid thing to do. Remember that definition of insanity? "Doing the same thing over and over, and expecting a different result."?

When it's politically necessary to make noises about doing something which is objectively stupid to do, not matching deeds to words is a quite common compromise. I'd personally rather the administration simply explain, publicly, why New Orleans should not be rebuilt, unless the people who want to live there are prepared to do it on their own nickle. I, of course, don't have to face the voters.

To live is the rarest thing in the world. Most people exist, that is all.
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