New Orleans after Katrina: is the glass half full, half empty or shattered?

How's New Orleans doing nearly a year and a half since Katrina? The answer (surprise!) depends on who you ask. According to the Brookings Institution's Katrina Index, New Orleans still struggles to rebuild, but there are signs of significant progress. Despite a serious spike in crime, the folks at Brookings note that :

"[T]he number of New Orleanians making investments in the city and putting down roots seems to be increasing. Over the last month, for instance, the number of new residential housing permits in New Orleans exceeded pre-Katrina levels and over 640 houses were torn down."

Of course, there are some who are convinced that some officials got what they've been after for some time: A New Orleans flushed of a significant number of its poor, unemployed "undesirables" -- an economic filtering of sorts. There are still people living in the Ninth Ward who are convinced that the levees were intentionally breached. (GW)

New Orleans of Future May Stay Half Its Old Size

By Adam Nossiter
New York Times
January 21, 2007

NEW ORLEANS, Jan. 20 — The empty streets, deserted avenues and abandoned houses prompt a gnawing question, nearly 17 months after Hurricane Katrina: Is this what New Orleans has come to — a city half its old size?

Over and over, the city’s leaders reassure citizens that better days and, above all, more people are in the future. Their destiny will not merely be to reside in a smaller city with a few good restaurants and curious local customs, the citizens are told.

But some economists and demographers are beginning to wonder whether New Orleans will top out at about half its prestorm population of about 444,000, already in a steep decline from its peak of 627,525 in the 1960 Census. At the moment, the population is well below half, and future gains are likely to be small.

“It will be a trickle based on what we know now,” said Elliott Stonecipher, a consultant and demographer based in Shreveport, La. “Low tens of thousands, over three or four or five years, something in that range. I would say we could start losing people, especially if the crime problem doesn’t get high visibility.”

The new doubts, surprisingly, are largely not based on the widespread damage caused by the flood. Rather, crippling problems that existed long before Hurricane Katrina are mostly being blamed for the city’s failure to thrive.

In this view, the storm was merely a grim exclamation point to conditions decades in the making. Before the storm, some economists say, New Orleans may have had more people than its economy could support, and the stalled repopulation is merely reflecting that.

Hurricane Katrina may have brutally recalibrated the city’s demographics, setting New Orleans firmly on the path its underlying characteristics had already been leading it down: a city losing people at the rate of perhaps 1.5 percent a year before Hurricane Katrina, with a stagnant economy, more than a quarter of the population living in poverty, and a staggeringly high rate of unemployment, in which as many as one in five were jobless or not seeking work.

Political leaders, worried about the loss of clout and a Congressional seat, press for people to return, but a smaller New Orleans may not be bad, some economists say. Most of those who have not returned — 175,000, by Mr. Stonecipher’s count — are very poor, and can be more easily absorbed in places with vibrant job markets, they say.

Large-scale concentrations of deep poverty — as was the case in New Orleans before the storm — are inherently harmful to cities. The smaller New Orleans is almost certain to wind up with a far higher percentage of its population working than before Hurricane Katrina.

“Where there are high concentrations of poverty, people can’t see a way out,” said William Oakland, a retired economist from Tulane University who has studied the city’s economy for decades. “Maybe the diaspora is a blessing.”

Others, however, worry that permanently losing so many people threatens the city’s culture — its unique way of talking, parading and eating.

“Culture is people,” said Richard Campanella, a Tulane geographer who has written extensively about the city’s neighborhoods. “If half the local people are dispersed and no longer living cohesively in those social networks, then half of local culture is gone.”

The new doubts also take into account the current barriers to repopulation, including the well-documented failure of the state’s Road Home aid program for homeowners, the loss of tens of thousands of jobs since the storm, the crime problem and delays in rebuilding moderately priced housing. Official efforts — local, state and federal — to rebuild the network of hospitals, schools and public housing projects that once served the city’s huge poor population have been faltering. But they also look at what New Orleans was before the storm.

The low population figure, 191,000, which was reported by the Louisiana Recovery Authority in November last year in the most credible survey to date, was about half the 444,000 count in a Census estimate before Hurricane Katrina. The number was surprising, dashing expectations of a “big return,” as one economist put it, and was hotly disputed by local officials. Still, upticks, if there are any, are imperceptible: the percentage of prehurricane gas and electric users who were getting service, for instance, remained the same between April and November 2006, the Brookings Institution reported last month.

“Our expectations were just wrong,” said James A. Richardson, an economist who directs the Public Administration Institute at Louisiana State University. “I don’t believe it will ever be 450,000 again. I think New Orleans did not need 450,000 people to support the economy you had at that time.”

With no real place for the poorest of the evacuees in the economy before the storm, New Orleans may have permanently lost that part of its population. Supporting that notion is an unpublished analysis by Mr. Oakland, the former Tulane economist, which shows unusually low rates of participation in the labor force before Hurricane Katrina.

Thus, a frequent impression of prehurricane travelers to New Orleans — that there were “a lot of people hanging around, going nowhere,” as the Nobel-winning Columbia University economist Edmund S. Phelps, a sometime-visitor, puts it — turns out to have a statistical basis.

The statistics, which compare the number of people actually working with the total working-age population, suggest “there are a lot of people out there not working,” said Mr. Oakland, referring to the period before Hurricane Katrina. Or, he said, they were working in an underground economy, not measured by statistics. If not actually illegal, he said, it was not very profitable.

In New Orleans, before the storm, about 4 out of 10 men in the working-age population were out of a job or not looking for one, compared with less than 3 in 10 nationally.

Employment had dropped sharply in the city from 1969 to 1999, Mr. Oakland writes. More than half of young black men ages 16 to 24 were not in the labor force. Unemployment rates among young blacks were above 25 percent. “The data is showing New Orleans is really a basket case,” Mr. Oakland said.

In the city’s poorest areas, the numbers were even more discouraging. In places like the Lower Ninth Ward or Central City, half of all working-age people were not looking for work, Mr. Oakland wrote. The real unemployment rate in these impoverished, high-crime areas, which would include those not looking for work, would have been a “whopping” 32 percent, he wrote.

Compounding the city’s difficulties, and, in effect, helping to stem the population loss, was a secondary factor: the direness of the city’s poverty, and its concentration. Those conditions helped make the city’s poor population exceptionally immobile. New Orleans was also poor not only in absolute terms, but also in relative terms. The poorest 30 percent of households had a lower share of the city’s total income than the comparable slice in any other similar Southern city, Mr. Oakland found.

“The job mobility was very low among the poor, so they just stay where they are, and the social welfare system shored them up,” Mr. Oakland said.

The city’s population was thus “out of equilibrium, if you would say that,” Mr. Oakland added. “It’s not normal to have that level of nonparticipation in the labor force.”

Haunting the city’s effort to repopulate, too, is the incalculable toll inflicted by ghosts from its past — a political legacy of corruption and patronage, and a deep racial division with a far more distressing passage toward integration than was experienced, say, in Atlanta.

Looking to the future, another 50,000 people might eventually be added to the city’s population, Mr. Oakland suggested, but there are no guarantees.

There has been little to no construction of cheap housing that would enable the return of the largest category of those still displaced, Mr. Stonecipher noted.

A second category of people, 50,000 or more who have established themselves elsewhere but who could return, may be even harder to recapture, given the combination of past weaknesses and continuing present-day hurdles.

“The longer it lasts, the more likely it is that our population is plateauing, the longer the uncertainty continues,” said Janet Speyrer, an economist at the University of New Orleans.