New Orleans of Future May Stay Half Its Old Size

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New Orleans of Future May Stay Half Its Old Size

• By ADAM NOSSITER NY Times
• Published January 21, 2007

http//www.nytimes.com/2007/01/21/us/nationalspeci
al/21orleans.html?hpex1169355600en4d31d664dff7
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Half Its Old Size?

• NEW ORLEANS, Jan. 20 The empty streets,
  deserted avenues and abandoned houses prompt a
  gnawing question, nearly 17 months after
  Hurricane Katrina Is this what New Orleans has
  come to a city half its old size?
• Over and over, the citys leaders reassure
  citizens that better days and, above all, more
  people are in the future. Their destiny will not
  merely be to reside in a smaller city with a few
  good restaurants and curious local customs, the
  citizens are told.
• But some economists and demographers are
  beginning to wonder whether New Orleans will top
  out at about half its pre-storm population of
  about 444,000, already in a steep decline from
  its peak of 627,525 in the 1960 Census. At the
  moment, the population is well below half, and
  future gains are likely to be small.

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Why?

• The new doubts, surprisingly, are largely not
  based on the widespread damage caused by the
  flood. Rather, crippling problems that existed
  long before Hurricane Katrina are mostly being
  blamed for the citys failure to thrive.
• In this view, the storm was merely a grim
  exclamation point to conditions decades in the
  making. Before the storm, some economists say,
  New Orleans may have had more people than its
  economy could support, and the stalled
  repopulation is merely reflecting that.
• Hurricane Katrina may have brutally recalibrated
  the citys demographics, setting New Orleans
  firmly on the path its underlying characteristics
  had already been leading it down a city losing
  people at the rate of perhaps 1.5 a year before
  Hurricane Katrina, with a stagnant economy, more
  than a quarter of the population living in
  poverty, and a staggeringly high rate of
  unemployment, in which as many as one in five
  were jobless or not seeking work.

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Lower Population

• The new doubts also take into account the current
  barriers to repopulation, including the
  well-documented failure of the states Road Home
  aid program for homeowners, the loss of tens of
  thousands of jobs since the storm, the crime
  problem and delays in rebuilding moderately
  priced housing. Official efforts local, state
  and federal to rebuild the network of
  hospitals, schools and public housing projects
  that once served the citys huge poor population
  have been faltering. But they also look at what
  New Orleans was before the storm.
• The low population figure, 191,000, which was
  reported by the Louisiana Recovery Authority in
  November last year in the most credible survey to
  date, was about half the 444,000 count in a
  census estimate before Hurricane Katrina. The
  number was surprising, dashing expectations of a
  big return, as one economist put it, and was
  hotly disputed by local officials. Increases, if
  there are any, are imperceptible the percentage
  of pre-hurricane gas and electric users who were
  getting service, for instance, remained the same
  from April to November 2006, the Brookings
  Institution reported last month.
• Our expectations were just wrong, said James A.
  Richardson, an economist who directs the Public
  Administration Institute at LSU. I dont believe
  it will ever be 450,000 again. I think New
  Orleans did not need 450,000 people to support
  the economy you had at that time.

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Labor Market and Poverty

• Statistics comparing the number of people
  actually working with the total working-age
  population, suggest there are a lot of people
  out there not working, said William Oakland,
  emeritus professor at Tulane University,
  referring to the period before Hurricane Katrina.
  Or, he said, they were working in an underground
  economy, not measured by statistics. If not
  actually illegal, he said, it was not very
  profitable. In New Orleans, before the storm,
  about 4 out of 10 men in the working-age
  population were out of a job or not looking for
  one, compared with less than 3 in 10 nationally.
  
• Employment had dropped sharply in the city from
  1969 to 1999, Mr. Oakland writes. More than half
  of young black men ages 16 to 24 were not in the
  labor force. Unemployment rates among young
  blacks were above 25 percent. The data is
  showing New Orleans is really a basket case, Mr.
  Oakland said.
• In the citys poorest areas, the numbers were
  even more discouraging. In places like the Lower
  Ninth Ward or Central City, half of all
  working-age people were not looking for work, Mr.
  Oakland wrote. The real unemployment rate in
  these impoverished, high-crime areas, which would
  include those not looking for work, would have
  been a whopping 32 percent, he wrote.
• Compounding the citys difficulties, and, in
  effect, helping to stem the population loss, was
  a secondary factor the direness of the citys
  poverty, and its concentration. Those conditions
  helped make the citys poor population
  exceptionally immobile. New Orleans was also poor
  not only in absolute terms, but also in relative
  terms. The poorest 30 percent of households had a
  lower share of the citys total income than the
  comparable slice in any other similar Southern
  city, Mr. Oakland found.

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What can state or local public finance do?
KEY Redistribution is VERY HARD TO DO if
People can avoid paying for it by moving.
Federal level is probably the best level.

• Tax those in the city to help the poor?
• They may move out.
• So, local solutions are not likely to work.
• What about at the state level?
• How does New Orleans compare with the rest of
  Louisiana in a claim for funds?
  
• Tax visitors?
• Maybe, but if you raise hotel or airport taxes
  too much, the visitors will go elsewhere.
  
• Federal help?
• Same issue as state help.