Further thoughts on abandoning New Orleans

The governor of Louisiana says no one will be allowed back into the city for 12-16 weeks. So assuming at least 16 weeks (because so far every projection involving the Katrina catastrophe has been over-optimistic) no one will be allowed back into New Orleans until Christmas. And when they get back, their house will probably be gone anyway. And whatever job they had there will also probably be gone. Tourism, one of New Orleans' biggest sources of jobs will not return automatically. People go there to party, not to see a depressed town where where people are homeless and jobless.

Except for people who work in the oil and gas industry who have to be in the area, everyone else will probably find jobs elsewhere and never go back. (This blogger has similar thoughts.)

So I think that the authorities, instead of working under the false assumption that everyone will move back to New Orleans and rebuild everything, need to more realistically work towards easing the former residents' migration to new locations, and making this the number one priority ahead of draining the city, which is no longer filling up with water because the water level has now equalized with the lake.

This end of New Orleans may have the effect of extending the housing bubble a while longer, because all those displaced people will need new homes.

Comments

[mikeca]

I heard an interview today with a Dutch official in charge of their dikes and levees. He said that he had visited New Orleans and the levee system in New Orleans was designed to handle everything up to a 100-year event. That was the engineering standard used by the Army Corps of Engineers in designing the system. The dikes and levees in the Netherlands, where about 1/3 of the country is below sea level, is engineered to handle up to a 10,000-year event. The Dutch official said the added cost of building a 10,000-year system rather than a 100-year system is less than the reconstruction cost after a single failure.

I am not clear if this storm was the 100-year event that just went over the levees or not. I have also read that the levees have been slowly sinking in places and starting in 1995 a large project was started to raise the level of these sinking levees, but after 2003 the funding was cut back considerably because of the federal deficit and the work is not finished. One news article indicated that there was construction going on this summer to improve the 17th street levee that failed, but the construction was not finished. Perhaps this storm was slightly larger than what the levees had been engineered to handle or perhaps the levees had sunk so they could no longer handle up to that 100-year event. In either case it looks like the money saved will be tiny compare to the cost of disaster recovery.

[Half Sigma]

mikeca, indeed, being too cheap to spend a few billion upfront was a huge mistake in comparison to what's probabably over $100 billion dollars.

Every hurrican season, they point out that the levees would not be able to handle a direct hit from a Category 4 or higher hurricane, and that's what finally happened.

[Michael A. Clem]

One has to wonder how expensive flood insurance was for New Orleans homeowners, or if most people had federal insurance instead.

[William]

New Orleans is going to get back on its feet. I will guarantee it, bet money on it. People just don't abandon their city, especially one with as much character as NO.

[Michael A. Clem]

Here's part of the answer to my question: "Standard business and homeowner policies will cover Hurrican Katrina's wind damage but not flood damage," said the Insurance Information Institute. "Flood damage is covered only by the National Flood Insurance Program."
So does that mean that private insurance companies wouldn't provide flood insurance to New Orleans homeowners, or does it mean that they couldn't provide it?

[Scott S]

That is interesting. So the government requires people in high-risk areas to purchase 'insurance' from the government. On the plus side (if their website can be believed), they are not funded by the taxpayer - and in emergency cases (like this one), they can take money from the Treasury but have to repay it back with interest. Color me skeptical.

http://www.fema.gov/nfip/whonfip.shtm

[Michael H.]

Hi Half Sigma
They certainly should have built the levees better. It isn't as though hurricanes are unknown there.

It might be possible to rebuild New Orleans to a higher elevation. Seattle initially had the same problem of being built on land too low. They decided to add 10 or more feet of soil to the downtown section. They did this many years ago (maybe a century ago) and the downtown section was probably only a square mile, but it might be possible to do the same thing in New Orleans.

But I have heard that much pollution and contamination has made New Orleans a toxic dump. It may be prohibitively expensive to clean that up. It may be best for most people to move elsewhere.

[notcattle]

It would make sense for any rebuilt residences (and MOST businesses) to be put in nearby areas that are less prone to flooding, and easier to maintain that status. There are, however, many areas (such as Bourbon Street) and other historical/tourist sites that can't be moved. These could be strictly business districts, which would be easy to evacuate before a storm, and who's destruction wouldn't cause people to suddenly become homeless. This would create longer commutes to work for some, but not many.

[Jeffrey L. Otto]

It seems like the question of abandoning NO is off the table now, so perhaps this discussion is, ahem, water under the bridge. But, can anyone think of a major human settlement after 1800 that has been completely or nearly abandoned following a disaster, whether man-made or natural? Even cities like Tangshan, China, where 700,000 people (nearly 3/4 of the population) were killed in the 1976 earthquake or Hiroshima, nearly totally levelled, have been rebuilt. The fact that humans since 1800 nearly always choose to rebuild probably has much to do with the modern insurance industry and the modern nation-state. It would be a lot more difficult for Venice the city-state to rebuild itself in the face of a disaster than it would be for Italy to rebuild one of its signature urban centers.

I think the more important question, now, is how NO will be rebuilt? And for whom? What will the decennial census tell us about the aftermath of Katrina?