A Tale Of Two Cities: New Orleans After Katrina

Two years after hurricanes Katrina and Rita swamped New Orleans, the recovery efforts have created a tale of two cities … and it is doubtful that the full grandeur of the old Crescent City will ever arise from either one of them.

The central business district, including the tourist areas, and the Port of New Orleans have been restored and have something of a business-as-usual character. But other districts of the metropolitan area, including suburban residential districts – which suffered the worst of the deluge – are ghosts of their former selves.

A return to pre-storm life in those areas, where levees broke or were breached, is questionable. In large part that’s because a significant number of residents are unlikely to return. That phenomenon has as much to do with the unusual and man-made condition of the city’s housing market as it does with the physical destruction of the natural disaster. For years prior to the storms the city’s economy and more importantly its workforce were defined by its low-cost housing.

Judi Bottoni / AP Two years after Hurricane Katrina, a shattered home still stands in Chalmette, Louisiana.

And while the tourism industry and convention business are capable of sustainable comebacks, say economic experts and city watchers, they may never return to their post Katrina scale.

"My best guess for what New Orleans looks like in ten years is not what it looked like two years ago, but what it looks like now," says Jacob Vidgor, an associate professor of public policy and economic at Duke University, who has studied evacuees of the city.

Though the Port of New Orleans is the biggest component of the local economy, contributing about $33 billion in area revenue at its pre-storm peak, the tourism and hospitality industries are a better measure of the comeback story and reflection of past and present labor and housing conditions.

"The size of the problem is just huge." says Loren Scott, a Baton Rogue-based economist, who publishes the Louisiana Economic Outlook and authored four quarterly reports on the rebuilding effort "Assuming no other hurricane hits, it’s going to take a decade."

Katrina was a Category 5 hurricane and triggered a storm surge that breached the city's levees at multiple points, burying 80% of city under water, causing caused more than $125 billion in economic damage in the region. Four weeks later Hurricane Rita, a Category 3 storm, brought more wind and rain.

The Comeback City

Like the port, which sustained $100 million in storm damage, tourism is critically important to the city economy. So, it’s no surprise there’s been a swift and substantial investment in restoring those parts of the city trafficked by visitors.

Prior to the storms, tourism and convention business accounted for 30% of New Orleans’ tax base, about $5 billion in revenue and some 85,000 thousand jobs.

Kelly Schulz, vice president of the New Orleans Metropolitan Convention Center and Visitors Bureau, can tick off an impressive number of comeback milestones, and speaks for many in acknowledging that tourism is the city’s heart and soul.

"We are not a city with a lot of Fortune 500 companies, " says Schulz, "We’re an historic city. We live and die by tourism and hospitality."

The city has taken an aggressive approach to bringing back that business. Since 2006, its "Forever New Orleans" campaign has graced billboards in 18 cities. In July, the city started buying ad space on the tray tables on US Airways and America West Airlines planes.

CONTINUED: The Lost City

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