Affordable Housing Institute : US

As the baby phoenix that will be New New Orleans cracks through the shell of Old New Orleans, its emergence comes not continuously but in scattered fragments,

 

 

as illustrated by these various stories, starting with the New York Times and Katrina’s bounty:

 

BATON ROUGE, La. — State officials assumed that Louisiana’s tax base had been battered by last year’s hurricanes, but the latest figures show that the opposite occurred: more tax dollars than ever are pouring into the state’s coffers as the budget year draws to an end.

 

The state predicted that tax collections would plunge by almost $900 million this year, and it slashed spending to match. Instead, a record $9.2 billion is on track to be collected by the time the budget year ends on June 30, and at least some of that tax flow looks as if it is likely to continue.

 

What few have been willing to voice is that New Orleans, for all its romantic Spanish-moss charm, has for decades been draining Louisiana’s economy:

 

The biggest surge by far has been in sales taxes, as hurricane victims have used federal aid, insurance proceeds and their savings to replace items as disparate as socks and SUV’s.

 

Let’s see … rebuild my house, or buy a new SUV?

 

Officials forecast that the state will end up with almost $500 million more in sales tax revenue than they expected before the storms hit.

 

Even New Orleans has gained by losing:

 

In New Orleans, sales tax collections in the first quarter were at only 76% of last year’s level, but that represents a substantial improvement over the end of 2005, said Reginald Zeno, the city’s finance director.

 

Especially given that its population is roughly 50% of what it was pre-Katrina.

 

Money gives choice, which people spend on what they value, rather than what their donors think money should be spent on:

 

Though Louisiana still has many obvious needs, like towing the hulks of hundreds of cars from under the highway overpasses in New Orleans, state officials are not devoting the unexpected tax revenue to those projects, arguing that they will ultimately be covered by the federal government.  But the state is spending money to help solve less evident problems in areas like health care and economic development.

 

Meanwhile, as we predicted right after the storm, the power has shifted from New Orleans to Baton Rouge:

 

Baton Rouge is struggling to cope with a decade’s worth of population growth that occurred in two weeks, as anyone who has tried to drive at rush hour here knows all too well.  Officials believe [Baton Rouge] may still have 100,000 more residents than it did a year ago.  Tax revenue was up more than 22% in the first quarter of this year, said Walter G. Monsour, the city’s chief administrative officer.

 

At stores, every day is like Christmas Eve, Mr. Monsour said. “Retailers are doing wonderful, restaurants are doing wonderful, car dealers are doing wonderful,” he said.

 

Courtesy of the Federal government

 

But no one knows how long the boom will continue, he added, so the city will use the excess money for one-time improvements like putting video cameras in police cars.

 

Observe the fungibility of money.  Federal largesse sent to New Orleans is not being used to make victims whole; instead it’s being used to make capital improvements.  If Congress knew back then what it knows now, would it have voted so many billions? 

 

Then there’s this CNN story:

 

(CNN) — Parts of New Orleans sank rapidly in the three years leading up to Hurricane Katrina, which might have made the already low-lying city even more vulnerable, a new study found.

 

That may explain why some levees failed during Katrina and raises serious concerns about the future of the city, according to researchers.

 

 

The study, released Wednesday by the journal Nature, found that some areas subsided 1 1/8 inch per year (28.6 millimeters) between 2002 and 2005. The average decrease was about a quarter inch (5.6 millimeters).

 

As I previously commented, that’s a staggering rate.  In Future Boston, a shared-universe science fiction mosaic novel I edited, we opted to sink the area four inches a year, a rate 100 times faster than any we knew. 

 

“We need to think long term, think of what will happen in the city in 50 or 100 years,” [co-author Shimon] Wdowinski said. “Some areas will continue to subside, the sea level will continue to rise. Places like the Lower Ninth Ward will be 10 feet below sea level.”

 

“You have a problem with that?”

 

“I don’t think anybody wants to live in a place like that.  It’s just not a good idea.”

 

You would think that such evidence would be enough to convince any awake human being, but evidently not Mayor Ray Nagin, agains courtesy of the New York Times:

 

NEW ORLEANS, June 17 — Billions of federal dollars are about to start flowing into this city after President Bush on Thursday signed the emergency relief bill the region has long awaited. But, with the anniversary of Hurricane Katrina approaching, local officials have yet to come up with a redevelopment plan showing what kind of city will emerge from the storm’s ruins.

 

No neighborhoods have been ruled out for rebuilding, no matter how damaged or dangerous.

 

No decisions have been made on what kind of housing, if any, will replace the mold-ridden empty hulks that stretch endlessly in many areas. No one really knows exactly how the $10.4 billion in federal housing aid will be spent, and guidance for residents in vulnerable areas has been minimal.

 

It is unclear which areas of New Orleans will get city services.  Adam Hutton, 11, on Friday added to piles of garbage in Central City.

 

What’s holding things up?

 

A month into his second term, Mayor C. Ray Nagin has said little about his vision for a profoundly different city. In an interview on Friday, he said it would be six months before a “master planning document” was issued to address questions like which areas should be rebuilt, although he suggested that thousands of residents were making that decision on their own.

 

Caution should be the watchword, Mr. Nagin said, months after the apparent demise of a planning committee he set up. “New Orleans is a very historic city,” he said. “We can’t come out and just do something quickly.”

 

What utter bilge.  The historic sections stayed dry.  They have already revived. 

 

But a close collaborator of Mr. Nagin acknowledged that the process has lagged. “Let’s just admit something straight out: we’re late,” said David Voelker, a board member of the Louisiana Recovery Authority.

 

There speaks an honest man.  Where is the mayor?  Hiding:

 

Within a week of his re-election on May 20, Mr. Nagin announced that two ex-rivals from the campaign — both lawyers, one a Republican and the other a Democrat — would be aiding him in urgent planning for the city’s future.  In 100 days [8/28/06 — Ed.], there would be a plan, it was announced.

 

Why does an incumbent need to wait until after the election to start planning?  Is geography partisan?  Franklin Roosevelt didn’t just plan the New Deal in 100 days, he enacted it.  This is absurd, transparently deceitful rhetoric.

 

“The only thing we have to fear is fear itself.”

 

“The city desperately needs leadership on planning and housing issues,” an editorial in The Times-Picayune said last week. “Without strong guidance from City Hall, crucial decisions about the future of New Orleans will be made by default.  Or they won’t be made at all.”

 

Plan B is the early favorite …

 

Indeed, the mayor’s only decisions have been negative:

 

As for the planning body created after the hurricane, the Bring New Orleans Back Commission, little has been heard of it for months.

 

The donations have been bountiful … what about the planning?

 

The commission’s tough plan, unveiled in January and now apparently dead, called for a four-month building moratorium in the hardest-hit neighborhoods while they proved their “viability.” Ultimately a new public agency would have been empowered to seize land [Eminent domain for economic development — Ed.] in areas that failed the challenge, and the city’s footprint was to shrink.

 

Sound strategy: amputate economically gangrenous neighborhoods, build a smaller, better new city.

 

Mr. Nagin, in the face of a public outcry, almost immediately rejected the plan.

 

 

Mayor Nagin’s incompetence borders on willful misconduct and criminal neglect. 

 

Donor funding is supposed to fuel self-sufficiency.  Instead it has allowed Mayor Nagin to ride grandiloquent bombast into an undeserved re-election, playing politics rather than serving his constituents and his city:

 

Timothy P. Ryan, an economist and chancellor of the University of New Orleans, calculates that more than $61 billion of disaster-related money will surge through the state from homeowners and business insurance, federal programs and the housing assistance program. The proportion of that money that will go to building will equal more than 28 years of normal construction spending.

 

In fact, the tax boom comes at a rather awkward time for the state, which is getting billions of dollars of aid from Washington to finance its program to help homeowners.

 

What’s ‘rather awkward’?  That the state has reaped huge benefits?  That it has not spent them on rebuilding the damage?  That New Orleans is still a headless beast?

 

Yes, Mayor Gain, it is.

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