Sunday, April 22, 2007

Obstacles - Demographics ...

From MarketWatch:

Another nagging concern prominent in the minds of public officials these days is the federal government's failure thus far to waive a 10% match from the state for Katrina recovery efforts, which would save Louisiana roughly $1 billion.

To those such as Sen. Landrieu, it's another example of the federal government's slighting of Louisiana since the storm. It follows such incidents as the Federal Emergency Management Agency's slow-footed response to the initial crisis, as well as proportionately larger sums of federal aid that made it to states like Mississippi, considered friendlier to the Bush Administration.

Landrieu points out the same 10% match was waived after the Sept. 11, 2001, terrorist attacks in New York, after Hurricane Andrew in Florida, and a slew of other disaster. The per-capita cost to state residents of those disasters totaled several hundred dollars, while Katrina and Rita amounted to $6,700. The normal threshold for waiving the fee is $100, she said.

"Why is there any hesitation, when we present numbers [that show] that it's $6,700?" Landrieu said. "It's so unprecedented, it's not even on the same page."

New Orleans' makeup

Finally, there remains the thorny issue of how New Orleans should look going forward. The city has tried to come up with development plans for a smaller city, but Mayor Ray Nagin is opposed to excluding poorer neighborhoods from the region's revitalization. Besides, it's unclear whether New Orleans will be that much smaller. Figures show that 80% of residents want to return.

Currently, it seems market forces will determine the city's fate. A tour of the devastated areas indicates that thus far, homeowners with stronger insurance coverage and credit standing for reconstruction loans have been able to rebuild. Areas such as the middle-class Lakeview region on the northwest side are rife with building activity.

But the further east you go, the more difficult it becomes to witness New Orleans' rebirth. Redevelopment is more sporadic in the Gentilly neighborhood and virtually non-existent in the city's Lower Ninth Ward. Much hinges on whether homeowners in those regions will be able to get their Road Home funding, or perhaps, other sources of capital.

Kopplin, from the Recovery Authority, said Katrina and Rita caused $100 billion in damage. Two-thirds of that will be recovered via insurance and governmental aid, but there will be no compensation for the remaining third unless more aid comes through, he says.

Gov. Blanco says that the best measure of a region's recovery seems to be where it stands after five years.

"I don't know if the five-year measure is going to be the meaningful measure for us, but I do think in five years we'll have critical mass and we will be feeling more like we're whole. I don't know that we'll be 100%. I don't think we will be."

Russ Britt is the Los Angeles bureau chief for MarketWatch.


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