A smaller New Orleans
By Edward L. Glaeser | February 1, 2006
MUCH OF the discussion of the planned rebuilding of New Orleans has been mired in nostalgia and unrealistic expectations, and we are in danger of doing a far worse job rebuilding New Orleans than rebuilding Baghdad. The final report released by the Bring New Orleans Back Commission -- the closest thing there is to an official reconstruction organization -- provides us with a blueprint for a rebuilding process that is both wasteful and unfair.
The press surrounding the Bring New Orleans Back Commission report focused on the anger surrounding the commission's admission that not all the city should be rebuilt. But this is the one thing the commission got right. Our obligation is to people, not places, and many residents of New Orleans would be better off with cash or portable housing, or education vouchers than with tens of billions of dollars of infrastructure spending.
The commission report put its sensible recognition that not all of the city should be rebuilt amid a roster of problematic recommendations. First, the report requires neighborhoods to develop plans to justify their reconstruction, but it doesn't elaborate on what criteria will be used to judge these plans. The absence of clear, well-justified rules that will determine rebuilding, hopefully based on cost-benefit analysis, will inevitably lead to claims of arbitrariness and political decisions.
Second, the report provides no funds to those people, especially renters, who live in neighborhoods that will not be rebuilt. Much of this rebuilding will be financed by federal dollars and justified as disaster insurance for the people of New Orleans. But federal disaster insurance shouldn't just help those people who live in the fortunate neighborhoods that will be rebuilt; federal disaster insurance should provide funds to help all the hurt people in the best way possible, which may not mean providing infrastructure. Residents who lived in areas that won't be rebuilt are entitled to insurance payments that are just as generous as those going to the people in areas that will receive the benefits of federal infrastructure spending.
The weakest elements of the report are its actual spending recommendations. The largest line item in the report is $12 billion for buying housing in New Orleans. Since the report strongly supports the Baker bill, I assume that this money is to be used along the lines suggested by that bill, which advocates federal spending that could top $50 billion in a poorly conceived scheme involving buying and rebuilding homes in the region.
The vision of the bill sponsored by Representative Richard Baker, a Baton Rouge Republican, is that houses will first be bought, then rehabilitated at federal expense, then sold back to the original residents or potentially someone else. Decades of public housing projects should have taught us that the federal government is not a good real estate developer...
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