January 27, 2008

A Recovery that Doesn't Work

posted by m.d.

If there are no workers:
Thousands of blue-collar workers like Washington who never lived in publicly subsidized housing increasingly have no place to live in New Orleans. The planned demolition of 4,500 publicly subsidized apartments is less significant to the future, policy experts say, than Katrina's destruction of nearly 41,000 inexpensive rentals that once housed the city's self-sufficient working class.

With no concrete plan to replace those apartments, some say the city's economic base erodes with every blue-collar worker pushed out by higher living costs.


Amid predictions affordable housing could be indefinitely out of reach for blue collar workers, state and federal agencies offered landlords a subsidy to accept lower-income tenants. The effort is falling short because landlords can get high rent in the post-Katrina free market without dealing with bureaucratic red tape. To date, there are only 550 of these subsidized apartments.

Long term, the Bush administration has offered tax breaks to developers to build mixed-income housing. Two and a half years after the storm, little such construction is evident.
No apartments, but plenty of homes:
More than 8,800 houses are for sale in the New Orleans area – almost as many as were sold in the last 12 months, according to one of the city's leading real estate brokerage firms. High insurance costs and the crash in the mortgage market nationwide have slowed sales.

Thousands more damaged houses are being bought by the state of Louisiana through its Road Home program. It pays homeowners for their losses in the 2005 hurricanes. These houses will be turned over to local governments for redevelopment or resale.

Meanwhile, 27,500 families, mostly from New Orleans, are still living in tiny, tinny government-issued travel trailers across the state.
If you have been waiting for rebuilding help that never came and now you want to sell, that's tough too:
A new study of home prices around the New Orleans area shows that buyers rewarded sellers who gambled and rebuilt in devastated areas like Lakeview, eastern New Orleans and Chalmette. Renovated homes in those areas recovered much of their pre-storm value last year, while prices continued to tumble on homes that were gutted but otherwise left untouched.

Wade Ragas, the retired University of New Orleans professor who prepared the study, said buyers have gotten wise to the amount of money and drudgery it takes to bring a damaged house back from the dead. Heartsick from being displaced for two years, distrustful of contractors and insurance companies, buyers are shopping for houses that have already been repaired for them.
Tipping point? What tipping point?
[Federal coordinator for Gulf Coast rebuilding Donald] Powell disagreed with Mayor Ray Nagin’s assertion that 2008 will be a tipping point in New Orleans’ recovery from the levee breaches that put most of the city under water and left behind massive destruction.

The recovery seems to have entered a new phase, with Nagin and other local officials who had decried the pace of federal aid saying money is starting to flow more freely and that the responsibility now falls on them to put it to smart use.
I've heard that something's "getting ready to explode."



Karen said...

Areas of the City which experienced depopulation before the storm are hurting the most.

Offering tax incentives to build high density afordable housing is sucking the life out of these same Neighborhoods which had a mix of 40 to 60 percent renters.

Working to encourage homeowners with rental units, to fix them would be a nice start instead of building these unproven entities such as The Domain Company and Falstaff.

varg said...

Where Y'at?