August 10, 2006

New Orleans Post-Katrina Recovery Lagging

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Brookings has as a one-year anniversary special report on New Orleans’ post-Katrina recovery. Bright spots include: the housing market is on the upswing, tourism and business travel are picking up, but that’s pretty much it for the plus side of the ledger.

Basic findings:

  • Housing rehabilitation, and demolition, are well underway while the housing market tightens, raising rent and home prices. Across the most hard-hit parishes in the New Orleans area, the pace of demolitions has accelerated in the last six months while the number of permits issued for rehab has nearly doubled in the city. Yet, housing is less affordable as rent prices in the region have increased by 39 percent over the year and home sale prices have spiked in suburban parishes.

  • Across the city, public services and infrastructure remain thin and slow to rebound. Approximately half of all bus and streetcar routes are back up and running, while only 17 percent of buses are in use, a level of service that has not changed since January. Gas and electricity service is reaching only 41 and 60 percent of the pre-Katrina customer base, respectively.

  • The labor force in the New Orleans region is 30 percent smaller today than one year ago and has grown slowly over the last six months; meanwhile, the unemployment rate remains higher than pre-Katrina. The New Orleans metro area lost 190,000 workers over the past year, with the health and education services industries suffering the largest percentage declines. In the past six months, the region has seen 3.4 percent more jobs but much of that may reflect the rise in new job seekers. The unemployment rate is now 7.2 percent, higher than last August.
  • Since last August, over $100 billion in federal aid has been dedicated to serving families and communities impacted by hurricanes Katrina, Rita, and Wilma. In the meantime, the number of displaced and unemployed workers remains high. To date, the federal government has approved approximately $107 billion in federal aid to the Gulf Coast states most impacted by the storms. Of these funds, nearly half has been dedicated to emergency and longer-term housing. In the meantime, an estimated 278,000 workers are still displaced by the storm, 23 percent of whom remain unemployed.

Full report (PDF) here.

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