Argument: Rebuilding New Orleans will not return it to economic vibrancy
Edward L. Glaeser. "Should the Government Rebuild New Orleans, Or Just Give Residents Checks?". The Economist's Voice. Vol 2, Issue 4, 2005. - Could New Orleans, with Spending, Somehow Return to Its Long-Past Glory?
Granted, some previously great ports have managed to rebuild themselves around new industries. New York is now devoted to finance. San Francisco is the center for information technology.
But New Orleans was never able to reinvent itself, perhaps because it lacked the human capital that has been so heavily correlated with urban success over the past 50 years.
Moreover, New Orleans’ port locale raises construction costs, relative to, say, the flat, featureless plains of Las Vegas. And New Orleans’ climate is problematic relative to California. My own guess is that the city would have declined by more than it has, if it were not for the durability of its housing stock and other infrastructure. And now, thanks to Hurricane Katrina, that last asset has been decimated.
Nor was New Orleans’ housing stock very valuable, in the market, to begin with. The decline in New Orleans’ population has been accompanied by economic distress and by low housing prices.
[...]The 2000 Census reported that more than 27 percent of New Orleans residents were in poverty (relative to 12 percent for the U.S. as a whole). Median family income was only 64 percent of the median family income in the U.S. In 2004, according to the American Community Survey, the unemployment rate for the city was over 11 percent. And New Orleans’ housing prices, prehurricane, remained far below those of the nation as a whole, providing further evidence of weak pre-existing demand for living in the city. By most objective measures, the city, pre-hurricane, was not doing a good job of taking care of its poorer residents. For most students of urban distress, New Orleans was a problem, not an ideal. Poverty and continuing economic decline fed upon each other, delivering despair to many of the city’s residents.