Tough Questions for Rebuilding New Orleans

Those responsible for rebuilding flood-ravaged New Orleans must make big decisions with imperfect information: How many people will return? What will the new geography of the city look like? And how do you jump-start an economy when there aren't enough workers and customers around? And finally, how do you encourage investment with all these unknowns?

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Whether it was schools or roads or houses, after Katrina there was no shortage of support for rebuilding New Orleans. President Bush, Mayor Nagin, entertainers and ordinary citizens all vowed that the city would be rebuilt. Well, now the effort to rebuild is struggling with how to proceed. As NPR's John Ydstie reports, there are some things everyone agrees on but sharp differences on others.

JOHN YDSTIE reporting:

There's one thing that everyone seems to believe: Confidence in the city's levees must be restored, or the future of New Orleans will remain in doubt. New Orleans Mayor Ray Nagin brought that message to Washington last week. He asked the federal government to commit funds first to restore the levees to withstand a strong Category 3 hurricane and ultimately build them to a Category 5 level.

Mayor RAY NAGIN (New Orleans): There's a lot of people in New Orleans that are in the city and they're gutting their properties to get ready to rebuild. But they won't invest--make the investments until they are comfortable that the levee system is there.

YDSTIE: So far, the mayor has only received assurance from the Army Corps of Engineers that the levees will be returned to pre-Katrina levels by next June.

Mr. RON UTT (Senior Fellow, The Heritage Foundation): You need to decide at what level you're going to protect the city and what parts of the city you're going to defend.

YDSTIE: That's Ron Utt, a senior fellow at The Heritage Foundation, a conservative think tank. He believes some of the city's lowest areas should become parks or marshland. Utt says locals will have a voice in that, but they won't make the final decision.

Mr. UTT: That's a choice that the federal government will largely make because the federal government is the only entity and partner involved in this that has the resources to make that decision.

YDSTIE: While a firm commitment from Washington would be good, New Orleans can't wait for absolute answers on the strength of the levee, says John Mcilwain, a senior fellow at the Urban Land Institute. Plans should be developed contingent on different levels of flood protection, he says.

Mr. JOHN MCILWAIN (Senior Fellow, Urban Land Institute): What are the choices? If the levees are redeveloped to this level, we can go this way. If they're not going to be redeveloped to this, then we do it that way. So there are choices that you can make.

YDSTIE: Right now, Mcilwain says, focusing on revitalizing the economy in the higher, drier parts of the city makes sense, but there's a big hurdle there too: housing. Businesses need workers and workers need a place to live, and in New Orleans, housing is in very short supply. Mcilwain says the federal government is the only player with the resources to cross that hurdle.

Mr. MCILWAIN: And the state doesn't have the money to prime this pump. Only the federal government has the literally billions of dollars that are going to be required to build the amount of housing that's going to be necessary to allow people to come back with their families and to rebuild the schools and to rebuild the health care system. And then with those families coming back, there'll be workers and customers.

YDSTIE: And an economy that can reinvest profits and grow on its own. One concern Mcilwain does have about federal rebuilding funds is that when they arrive they'll go directly to individuals. That could lead to a very spotty recovery, he argues.

Mr. MCILWAIN: Some people will have the ability to rebuild their house, but most of their neighbors won't. So you'll take a block--say, a block that has 50 homes on it and at the end of this recovery period you'll see one or two homes rebuilt and the rest of it will be simply vacant wasteland. Now there are places in Detroit that look like that, and, I tell you, it's not a healthy community.

YDSTIE: Mcilwain says funneling the rebuilding money through a government authority would allow the city to rebuild in a way that could include low-income residents whose neighborhoods might end up being abandoned. You do that by building mixed-income housing, he says. It's the latest trend in urban design.

Mr. MCILWAIN: It actually works very well. And in fact, it's a throwback to the way we used to live back in the 19th century when everybody would live within walking distance and the bank president and the barber and the guy who picked up the trash would all be within a 10-minute walk of each other.

YDSTIE: Next week Mcilwain's employer, the Urban Land Institute, an urban development think tank, will present a plan for New Orleans to city leaders, so this idea will likely get aired. But Ron Utt of The Heritage Foundation sees them as the fantasies of the new urbanists.

Mr. UTT: There's the sort of a notion that there is this city czar that can sort of violate everybody's property rights and everybody's free will and re-create something. I mean, the thing you have to keep in mind is that New Orleans technically is owned by somebody. Well, it's owned by tens of thousands of people, individual property owners who presumably have some say in what they would like to happen on their eighth of an acre.

YDSTIE: Utt says past government attempts at urban renewal provide a cautionary tale. His think tank, The Heritage Foundation, advocates funding the rebuilding effort through tax breaks and grants to individuals and businesses. No matter how it's delivered, Utt thinks the amount of federal rebuilding money won't be anywhere near what many had hoped for.

Mr. UTT: I think everything's very much in flux right now, but my sense, my gut feeling if I was going to bet, whatever the federal commitment would be will be modest in comparison to what everybody thought it was going to be six weeks ago.

YDSTIE: John Mcilwain is concerned about that, too. Both he and Utt see the White House and Congress distracted by other political issues and losing interest in the hard task of rebuilding New Orleans. John Ydstie, NPR News, Washington.

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