After Hurricane Katrina: How federal aid helped the region rebuild, improve

It took nearly three centuries to build the New Orleans that stood on Aug. 28, 2005, and just hours to destroy it.

Tens of thousands of homes and businesses, churches and hospitals — all the structures of civic life, the collective work and legacies of half a million inhabitants and numerous previous generations — were left soggy, broken shells.

A decade later, the most ambitious recovery program the country has ever seen is in its final phases.

An unprecedented $71 billion in federal assistance has remade southeast Louisiana in ways large and small, from the temporary blue-tarp roofs that dotted the landscape in late 2005 to the higher, stronger levees that replaced the ones that failed so catastrophically on Aug. 29, spilling tragedy into the region.

The federal money spent on rebuilding south Louisiana in the decade since hurricanes Katrina and Rita is roughly equivalent to what officials in Baton Rouge would typically spend on capital projects statewide over 60 years. Taken together with the emergency aid it provided in the storms’ aftermath, the federal government has spent three times the annual state budget on Louisiana’s recovery.

“We’ll never see this again in our lifetime,” said Cedric Grant, director of the New Orleans Sewerage & Water Board and Mayor Mitch Landrieu’s point man on public works.

Though slow to launch, the spending made possible by the huge federal aid package also helped to sustain a population that had been scattered by the storms and sparked an economic boom that carried New Orleans through the worst of a national recession.

And the effects will be much longer-lasting. The massive rebuild, focused in southeast Louisiana but stretching across the state, in many cases allowed communities — especially New Orleans — to greatly improve infrastructure that was in appallingly bad condition when Katrina struck.

Today, an entire region whose very future was uncertain a decade ago is preparing to draw down the last of the federal aid. More than 92 percent of the money allotted to response and recovery efforts has been spent.

The money has covered more than 30,000 individual projects across south Louisiana, including the gleaming new University Medical Center in Mid-City, mile upon mile of restored roadways and bridges, and a hugely upgraded levee system ringing the New Orleans area. That’s in addition to the roughly 100,000 homes that were repaired with help from the government.

The federal assistance also has enabled the state to be more prepared for the next disaster, with major programs aimed at raising houses and better planning and shelter for evacuations.

A long slog

The recovery has been painful and frustrating at times.

The initial infusions of federal aid — perhaps in atonement for the botched government response in the week after Katrina’s landfall — came quickly and relatively free of red tape.

Cash cards were doled out, and tarps were stretched across broken roofs. Soon, the tiny travel trailers that would become home to thousands of New Orleanians for months and even years became a ubiquitous feature of city life.

FEMA spent almost $5.3 billion on that temporary assistance in the wake of Katrina and another $524 million after Rita. Another $842 million was plugged into safety-net programs such as food stamps, welfare and unemployment.

Meanwhile, crews began hauling away debris in a huge effort that eventually would grow to cost $1.15 billion.

But that short-term momentum wouldn’t last, as the immediate response gave way to the long, hard slog of a more permanent recovery.

Residents’ returns became tangled in the bureaucracy of massive programs that had to be developed from scratch. Leaders were forced to battle the federal government for what was, after all, a disaster rooted in the engineering failures of a federally guaranteed flood protection system.

No program had as high a priority — or was as difficult to put together — as the oft-maligned Road Home program, which has provided almost $9 billion to residents to rebuild their homes or to sell them to the government.

It was a response to a unique situation that saw an entire city in the throes of recovery, rather than just certain neighborhoods, former Gov. Kathleen Blanco said.

“You never (before) had a metro area go down completely,” she said.

But the program was hamstrung, first by fights in Congress over whether to provide the whole amount sought by the state and then by problems in the newly created program itself.

The Road Home would become a symbol for the phlegmatic recovery, with an inefficient bureaucracy that was slow to hand out checks, lacked oversight to make sure residents weren’t ripped off by contractors, and was unable to hold homeowners to their promises to fix up their properties.

Closing the books

Ten years later, state officials are working to close the books on Road Home, aided by a three-year contract with nonprofits that will work with the 4,500 people in the New Orleans area yet to complete renovations.

Warts and all, though, the Road Home helped a huge number of people get back.

“Those are hundreds of thousands of individuals and families that were able to stay in Louisiana, stay in their communities so the communities they live in could rebuild and recover,” said Kristy Nichols, director of the state Division of Administration.

Officials argue that some missteps and setbacks were inevitable, given that the unwieldy program had no precedent and had to be built from the ground up.

“In terms of every recovery effort — whether it be developing permanent housing, whether it be Road Home — those are so large-scale they were completely new to this country in terms of how to recover,” Nichols said. “In any effort of that magnitude, you’re going to learn lessons every day about those programs.”

Homeowners also would find assistance through other federal programs.

One of the biggest chunks of money — though it is not an aid program per se — came from the federally run National Flood Insurance Program, which paid out about $13.2 billion to policyholders for their flood losses.

The U.S. Small Business Administration, which provides low-interest loans in the wake of natural disasters, issued about $4.8 billion in loans to Louisiana homeowners and another $1.5 billion to businesses.

That largesse, combined with the Road Home, meant a lot of aid for homeowners, but the huge population of renters in the city had fewer places to turn.

The Road Home’s Small Rental Program got off to a late start and distributed just a fraction of the aid devoted to the homeowner program, about $429 million.

University of New Orleans urban planning professor Marla Nelson said the focus on owner-occupied housing has contributed to the “uneven” redevelopment of the city and made it particularly difficult for working-class residents to thrive.

Some of those problems are due to a hot housing market, which has made affordable housing scarce and likely would have been unimaginable to New Orleans officials who, before the storm, were used to decades of declining population and low housing costs, she said.

But a plan with more explicit goals of equitable recovery for all residents could have changed that dynamic, as could more public input and oversight of where money for infrastructure projects was used, she said.

Dome fix fast, atpyical

Rebuilding large public assets also would prove challenging — and slow.

An exception was the Superdome, battered by the storm and a worldwide symbol of misery in its immediate aftermath. The Blanco administration made it a priority to get the befouled stadium ready for the return of the New Orleans Saints, putting a Dome overhaul on the fast track. It cost about $137.5 million.

While some questioned the decision, given that hundreds of thousands were still struggling to return to normalcy, it had both a symbolic and practical rationale, Blanco said — particularly as Saints owner Tom Benson was talking about picking up and moving the team.

“I understood something from day one: I looked at that torn roof on the Superdome, and I knew if we didn’t get that eyesore, that symbol of destruction, fixed quickly, we’d be demoralized and we’d lose the Saints,” she said.

The Saints would return in triumph in September 2006, reopening the stadium on “Monday Night Football,” trouncing the rival Falcons and giving the region a collective lift that many marked as the happiest day since the storm.

If the Dome revamp was a model of efficiency, other infrastructure projects proved far more vexing.

Andy Kopplin, who headed the Louisiana Recovery Authority after the storm and now serves as Mayor Mitch Landrieu’s chief administrative officer, recalled the early years of the recovery as a time when the state was “building mountains of paperwork rather than buildings.”

The process eventually gave way to results, Kopplin said. The Landrieu administration made finishing the public projects a priority, with 100 completed in the mayor’s first year in office and many more since.

The breadth of the various efforts touches on almost every aspect of life in Louisiana.

There are the mega-projects: the Dome; the $1 billion new University Medical Center in New Orleans, expected to open later this year, which will replace Charity Hospital and which drew more than 64 percent of its funding from FEMA; and the biggest of them all — the $14.5 billion in upgrades to the regional levee system.

There’s a wide array of other high-dollar projects. About $1.8 billion went to rebuilding New Orleans’ schools, in a rare lump-sum agreement with FEMA that didn’t tie the money to specific buildings, allowing local officials to decide how best to spend the money.

Across the state, federal money also has paid for untold miles of revamped roadway. FEMA put up $283 million for street and bridge repairs, and the U.S. Department of Transportation provided another $208 million. The Twin Spans, which carry Interstate 10 from New Orleans to Slidell and serve as a key east-west link for the nation, were replaced with a pair of higher bridges for $770 million after Katrina’s surge knocked several segments off their piers.

Federal block grants provided $49.8 million to purchase Methodist Hospital, which reopened last year as the city-owned New Orleans East Hospital. Another $17.9 million went toward streetcars for the Canal Street line.

Not every project was so large or far-reaching. Thousands of them used just a few thousand dollars or less — for instance, the repair of the air-conditioning unit in the Audubon Zoo’s cockatoo exhibit, accomplished with $2,900 in FEMA money.

An endless back-and-forth

Many, if not most, of the projects required seemingly interminable haggling between local governments and FEMA over what was actual storm damage and thus eligible for federal money and what were pre-existing problems.

Craig Taffaro, the former St. Bernard Parish president who now directs the state’s Hazard Mitigation Grant Program, noted that FEMA initially had far lower damage estimates.

“FEMA projected the recovery was about a $6 billion to $7 billion effort,” Taffaro said. “It’s twice that and will be more by the time it’s over.” FEMA has now spent a total of $19.5 billion, including on emergency operations after the storm.

The negotiations with FEMA can often veer into minutiae, such as who should pay to add wheelchair ramps to ancient sidewalks. It’s tedious but well worth it, officials say.

“We went back to the drawing board with FEMA and have secured almost a billion dollars of additional FEMA funding for the city by effectively pressing our case and documenting our losses,” Kopplin said.

Agreeing on cost isn’t the only hurdle. Local governments and FEMA also have been slowed by the sheer volume of work, Taffaro said.

“A typical parish might build one fire station over five years. Now you’ve got to build 15 fire stations over the same period of time,” he said.

While much of the recovery work in New Orleans will be winding down by 2018, according to Kopplin, some key tabs remain unsettled. The biggest is likely the Sewerage & Water Board, which is still trying to broker a final settlement with FEMA. The resulting money, combined with rate increases, will cover a backlog of projects extending to 2030.

In the end, the city hopes to secure a total of $2 billion to repair streets and pipes and finish other projects.

That amount would be transformational for the city’s decrepit infrastructure.

A sum of that size normally would be pieced together over decades, and by the time the last dollar was spent, the first projects would be nearing the end of their lifespan.

“What we’re doing, you couldn’t do in a generation,” Grant said.

Broader ripples

The injection of so much federal money has gone beyond bricks and mortar.

In 2008, the country was rocked by the collapse of the housing bubble and plummeted into what came to be known as the Great Recession. Industries across the spectrum struggled, with construction hit hardest.

But as Congress was debating the wisdom and size of a stimulus package aimed at jump-starting the national economy, Louisiana was tapping the recovery dollars that would provide a more localized booster shot.

A year after Katrina, there were more than 32,000 construction jobs in the New Orleans metro area, according to the federal Bureau of Labor Statistics. That was almost 2,000 more than before the flood, even though the city’s population had fallen by 60 percent.

Construction jobs would peak in October 2008 and remain largely stable over the next several years, even as work dried up for builders elsewhere.

“It just happened to hit us right when the rest of the country’s economy was in a downturn, and all of a sudden, the only place in the country where money was being spent, certainly in a construction sense, was New Orleans,” said Melissa Gibbs, of Gibbs Construction.

For builders, the aftermath of the storm was a blur.

Crews were dispatched to repair levees, clean out government buildings and install trailers for returning residents.

In one case, Gibbs said, workers donned hazmat suits to block the horrendous smell of “thousands” of dead and dying fish they were hired to scoop out of a large, stagnant pool of water next to a flooded pump station in the Lower 9th Ward.

“When we had the opportunity to help put things back together again , all of us … felt an urgent need to help as much as we could,” she said.

As the recovery work winds down, construction jobs are decreasing, but the area is replacing those jobs with growth in other sectors, said Michael Hecht, who worked with the state’s economic development department after the storm and now heads the public-private economic development group GNO Inc.

Those include biomedical industries centered around the new hospital complex in Mid-City, growth in trade and the energy sector, the growing tech industry and new retail developments.

“The momentum is real, and the momentum does have the beginnings of a virtuous cycle,” Hecht said.

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