Friday, January 27, 2006
The Decapitalization Of New Orleans
But details of the reconstruction plan released in January, in so far as I have been able to find them, seem pretty disastrous. The delay on deciding which neighborhoods will be rebuilt will leave many homeowners unable to find financing. I realize that some areas may not be reconstructable, and I realize land will have to be taken for building levees, for example.
But the uncertainty about the status of so many individual homeowners' property basically strips them of capital. This is a recipe for creating blight, not reconstruction. If a person can't even find out whether they will be allowed to keep their home for a year, why would they incur new debt to rebuild or repair it? Why would a bank lend money to do that, since if the home were later condemned when the work was partially complete, they might well not be able to recover their loan principal?
Surely the rebuilding plan should start with a flood protection plan and then notification of areas in which people would be permitted to stay. I can't say the the federal government should control these processes - this is local business. But at this point, all my sympathies are with the people who have been left in uncertainty. From what I know, this is a plan destined to destroy some of these neighborhoods. It's a condemnation process by default. People won't move back because of the uncertainty, and because they don't move back those who do will lose their homes.