New Orleans: Its Economic Future: A Realistic Assessment

1
New Orleans Its Economic Future A Realistic
Assessment

• Presentation to Mortgage Bankers Association
• James A. Richardson, Alumni Professor of
  Economics
• Louisiana State University

2
A Look at Reality

• The future begins with where you currently arewe
  cannot ignore the current status of the New
  Orleans Metropolitan Area
• The current status does not limit the future it
  does, however, affect the timing of recreating
  the economy.

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Areas of Orleans Parish
New Orleans East Pop 115,806 46 Rental Avg
Home 110,595
Lakeview Pop 25,826 34 Rental Avg Home 216,056
Gentilly Pop 44,164 28 Rental Avg Home 102,850
Mid-City 41,189 58 Rental Avg Home 77,595
Bywater Pop 79,560 73 Rental Avg. Home 89,159
French Quarter / CBD Pop 5,970 76 Rental Avg.
Home 405,519
Uptown / Carrollton Pop 67,082 53 Rental Avg
Home 172,406
Central City / Garden District Pop 48,295 74
Rental Avg Home 163,793
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Hurricane Katrina and Breaching of Levees
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Flood Extent in Orleans Parish
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Impact on Population
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Displaced Persons Louisiana

• Population Pre and Post Katrina
• Orleans 462.3 154.1
• Jefferson 453.6 363.3
• St. Bernard 65.6 6.9
• Plaquemines 29.0 17.3
• Total in Bowl 1,010.5 541.6
• St. Tammany 213.6 205.5
• St. Charles 50.1 51.8
• St. John the Baptist 45.6
  49.3
• Total Area hit 1,319.8 848.1

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Impact on Housing StockRed Cross on Katrina
RitaNovember 8, 2005

• Impact Number
• Destroyed 137,502 (Un-inhab.)
• Major 73,846 (Un-inhab.)
• Minor 70,689
• Affected 188,656
• Inaccessible 2,489
• TOTAL 473,182

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New Orleans Employment Tendencies
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New Orleans Employment Relative to Statewide
Employment
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Post-Katrina Employment(in thousands)
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Putting the Puzzle Together
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Public Policy Priorities

• Recognize that individual decisions by families
  and businesses will ultimately determine the
  success of recovery program--program must
  facilitate and encourage private decisions
• Governments decisions can deter or facilitate
  the re-development of New Orleans

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The Ultimate Tradeoff

• New Orleans as regional economic area cannot
  recover faster than housing can be provided,
  social facilities are available, and citizens can
  feel secure about their safetythis may be five
  to ten years. It will surely not be six to
  twelve months.
• Citizens cannot wait 5 years to get back to
  normalcy.

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Key Issue Housing In New Orleans Metropolitan
Area

• First issue housing in Orleans Parish
• But this affects other parishes and other states
• Cannot replace half of million people with
  trailer parks and tents
• Importance of Richard Baker Type Proposal
  creation of Louisiana Recovery Corporation to
  settle outstanding mortgages, give property
  owners option to sell and repurchase at later
  date, and make infrastructure improvements

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Issues Facing State and New Orleans

• Define new building codes flood plains rules
  and regulations of neighborhood restoration
• Policy for electricity restorationcost of
  rebuilding infrastructure and cost per customer
• Property tax reassessmentcovering outstanding
  bonds

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Benchmarks for New Orleans

• What happens in Springprivate universitieshow
  successful in their re-opening
• Schools opening in January, August
• Financial viability of health care providers
• Mardi-Gras, Jazz Fest, and other unique
  attributes of New Orleans
• Major convention in June---can it handle a
  convention of 20,000 or so

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Attitude about New Orleans

• Be realistic
• New Orleans has two personalities
• We are coming backfocus on part of city such as
  French Quarter, Garden District
• Major neighborhoods will not be rebuilt very
  quickly if at all
• Traditional industries will be essential
• Port and international trade
• Oil and gas
• New Orleans as tourist destination
• Saints and Hornets as symbols
• New Orleans Charm
• Optimistic about long-termNew Orleans will
  recover

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Measuring Our Success

• Success will ultimately be measured by what we
  have accomplished over the next ten years, not
  just the next two years.

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Inspiration from John Stuart Mill

• what has so often excited wonder, the great
  rapidity with which countries recover from a
  state of devastation the disappearance, in a
  short time, of all traces of the mischief done by
  earthquakes, floods, hurricanes, and the ravages
  of war. (Principles of Political Economy, Book
  1, Chapter 5)

22
New Orleans Its Economic Future A Realistic
Assessment

• Presentation to Mortgage Bankers Association
• James A. Richardson, Alumni Professor of
  Economics
• Louisiana State University