The shrinking easy: how big will New Orleans be?
NEW ORLEANS.– Signs are everywhere in New Orleans that the Big Easy won’t be so big anymore.
It starts with talk of Hurricane Katrina – simply called “the storm” by locals. Katrina is on the lips of everyone nearly every waking minute, from shop managers now relying on Internet trade for business, to pub owners now getting only a small fraction of their normal sales.
Pan the camera and the view is clearer on the city’s main thoroughfare, Canal Street, as it’s now devoid of traffic. Nearby, French Quarter restaurants, souvenir shops and nightclubs are open but the vast array of boutiques, art galleries and antique shops remain shuttered, leaving the historic district mostly dark for the holidays.
The real shock comes on a venture beyond downtown, where commerce is non-existent. From Lakeview on the west all the way down to ravaged St. Bernard Parish 20 miles to the east and beyond, entire communities are now oversized ghost towns, decimated after floodwaters filled 200,000 homes and thousands of businesses when Katrina hit Aug. 29.
It’s clear the New Orleans economy will never be the same. “Some whole towns have been wiped off the map,” said Sean Reilly, an advertising executive and member of the Louisiana Recovery Authority board. “You no longer have schools, roads, hospitals. It’s unbelievable.”
Reilly says the Louisiana capital of Baton Rouge, where he does business as president of Lamar Advertising (LAMR), already has surpassed New Orleans in size. He adds it’s expected to stay that way — permanently.
The reason: It’s almost a foregone conclusion that portions of outlying, lower areas around New Orleans face the prospect of extinction, returned to wetlands in an effort to keep Louisiana’s coastline from eroding further.
It also seems clear the many evacuees who fled the city will never return. The trump card is how many of the city’s flooded neighborhoods have a shot at rebuilding, and whether market forces and government aid will actually reconstruct those regions.
It will make the difference between New Orleans simply being a port and petrochemical town with a side order of tourism, or a vibrant, diverse economy.
“The big deal for us is housing stock,” said Michael Olivier, Louisiana’s secretary for economic development. “I think New Orleans is going to be very much a smaller city than it was.”
As many as 400,000 people have stayed away from the city, leaving New Orleans with roughly 60,000 residents. About a million people left the greater metropolitan area but most outside New Orleans proper were able to return. Many of those who couldn’t are in far-flung locales.
While much of New Orleans looks like a war zone, some of the surrounding communities find themselves bulging with new residents as well as demand for real estate.
Seventy-five miles away in Baton Rouge, real estate sales jumped 60% year-to-year in September and October, said Malcolm Young, chief executive of the trade group Louisiana Realtors. Prices climbed 15% to 20%.
Since October, though, prices have leveled off, Young said. In areas immediately adjacent to New Orleans such as Metairie and Kenner, prices have only inched up incrementally. It seems homeowners are waiting to see what happens to the flooded neighborhoods.
In these deluged areas, countless houses, apartments and businesses sit vacant - or simply abandoned - all dusted with the silt that swirled in floodwaters and infected with mold. Floodwaters rose so high in some areas that older homes shifted off their foundations - or just collapsed.
The flood didn’t discriminate between small bungalows and large manors with circular driveways. All have the same telltale brown line on the outside, a reminder of how high the waters rose. These devastated areas are without power, leaving downtown New Orleans looking like a tiny island of light in a sea of darkness.
“There were some early perceptions that this was just low-income black people. Hopefully, everybody knows now that this destruction involved high-income white people, too,” said Mark Drennan, chief executive of Greater New Orleans Inc., a public-private entity created 18 months ago to promote business.
Most homeowners in these areas were told by insurers they didn’t need flood coverage, and now must figure out how to reconstruct without it. Some ignored conventional wisdom and got flood insurance. But even they have yet to see a check.
That’s left the building boom that commonly follows disasters stuck in neutral. One building contractor, Carlos Hampton, says the Katrina-related work he’s doing now is all in debris hauling.
“It’s going to take at least three to five years for the city to get back to the way it was,” he said.
One element likely to make a difference in the rebuilding process is New Orleans’ huge rental population, comprising roughly 60% of the city by some estimates. One concern is that landlords who own several housing units may reconstruct only a fraction of them if they believe there will be a smaller population to serve.
And everyone – insurers, homeowners, businesses – are waiting for federal, local and state officials to outline how they will reconstruct the massive levee system that failed.
That reassurance has been slow in coming. In mid-December, the Bush Administration asked for an extra $1.5 billion on top of the $1.6 billion pending in Congress to shore up the levees. The money would be used to “armor” the levee system, close three canals and provide state-of-the-art pumping systems.
“This commitment, this action today, says ‘Come home to New Orleans,’” Mayor Ray Nagin said in a press conference shortly after the proposal was announced.
But the funds have yet to be green-lighted by Congress. If the region doesn’t get that soon from lawmakers, local officials worry residents will get impatient and permanently relocate elsewhere, effectively wiping out an entire market of workers and consumers.
Mark Randle, a Small Business Administration adjuster handling claims for the New Orleans area, says that more than $80 million has been approved in business loans, but none has been funded as owners are hesitant to go forward just yet.
“In many cases, applicants did not want to sign the loan documents until they know what they can do,” Randle said.
Source: Dominican Today, December 27, 2005