New Orleans: A Case Study of a “Natural” Disaster

SOC 331Population and Society

07.30.08

Large parts of the presentation have been prepared and previously presented by Jon Agnone, Irina Voloshin, Any Bailey, Scott Deburgomaster, Stephanie Liddle,

Tyler Corwin and Dave Sharrow

Topics

• History & Neighborhoods

• Makings of a Disaster

• Good Neighbor Plan

• Housing & Insurance

History & Neighborhoods

The Makings of a Disaster

• Katrina: Merely A Catalyst

• Impact - Disproportionately affecting New Orleans Residents by:

• Race/Ethnicity (African Americans)• Socioeconomic Status (poorer)• Spatial Location (below sea level)

• Putting it all together: The intersection of race, poverty, location

The Dynamics of Dislocation

• Who left and why? • Will people return?

– A link to housing

• Sources of help:• Least for most needy• Family, Friends, and Nonprofits

• What is the role of the government and business/industry?

Modes of Response: Inequality Perpetuated

• Governmental Response • Local/City – Good Neighbor Act• State as conduit• Federal – FEMA

• Business Response• Insurance Companies – flood vs. hurricane • Tourist Economy • Disaster as Entertainment (disaster tour

companies)

New Orleans’ Good Neighbor Plan

• City Ordinance

• Goal: Protect Property

• How: Deadline for home improvements– Home Owners have three options…

Option 1

Option 2

Option 3

Problems with Good Neighbor Plan

• Notices mailed or posted

• Stricter law passed February 2007

• What do residents think?

What does it all mean?

“When you look at the big picture, I believe that this is all a plot to drive poor people out of New Orleans.”

-Curtis Muhammad, People’s Organizing Committee

Housing & Insurance

• Before Hurricane Katrina:– The average price of single-family home in the

metro area was $200,987– In eastern Orleans Parish, made up of

predominately black and lower income neighborhoods, the average price was $136,161

– The average rent in the metro area was $737

Housing & Insurance

• Desperate housing situation for some and opportunity for others– The average price for a single-family home in the metro area is

now $212,875 (6% increase)

– Average rents have increased to $921 a month. Some have even doubled or tripled ($1,500 to $2,100)

– In eastern New Orleans, the average price of a home fell by 44% ($76,750) after storm

• Since, risen 17% or $90,062.

Metro Area

Eastern Orleans

Housing & Insurance

• After Hurricane Katrina: – Nearly 70% of housing units (owner- and

renter-occupied) were damaged.

– Almost 60% of housing units damaged were classified as “destroyed or suffering severe damage” (cost to make habitable ≥ $30,000).

Housing & Insurance

– Proportionately, owner-occupied housing units were most effected

• Roughly 76% versus 67% of renter-occupied units

– However, apartment units serve more residents—thus renters were impacted in greater numbers

– Also, unlike homeowners, renters are not “eligible” for flood or hazard insurance.

• Further reducing chances of recouping losses

Housing & Insurance

• Statistics on how many residents had “disaster” insurance are speculative– Estimates range between 30 to 50% of homeowners

lacking flood Insurance altogether

– Likely that most homes were not wind and flood protected

• Since the governmental flood protection was virtually non-existent pre-Katrina (e.g., no flood related building codes), residents likely had a “It will not happen to me” attitude

Housing & Insurance

• However, “pay-out” has been slow– Insurance companies have disputed flood

versus wind damages• Leveling of homes has made it difficult to

determine cause

– Residents often feel insurance dollars are insufficient

• Selective/partial coverage by insurance companies• Residents failed to keep up-to-date home

appraisals

Road Blocks to Rebuilding

• Costs, Costs, Costs– Housing prices have increased– Pay up-front expenses and then submit for

FEMA reimbursement (may or may not be granted)

– Mandatory flood insurance is now required in many regions under the National Flood Insurance Program.

• Pre-Katrina, Average premiums were $375 a year and only recommended

Mandatory Flood Coverage & Annual Premiums (A Zones)

Building & Contents Building Only Contents Only

Coverage Annual Premium

Coverage Annual Premium

Coverage Annual Premium

$35,000/10,000 $503 $35,000 $398 $10,000 $140

50,000/15,000 681 50,000 523 15,000 196

75,000/20,000 844 75,000 633 20,000 251

100,000/30,000 1,033 100,000 796 30,000 334

125,000/40,000 1,223 125,000 906 40,000 416

150,000/50,000 1,412 150,000 1,016 50,000 499

250,000/100,000 2,233 250,000 1,441 100,000 913

Road Blocks to Rebuilding

– Lower prices in eastern New Orleans, but…• Must pay rent and likely a mortgage while fixing flooded

home• Commute to new property--higher gas prices• Possible leave of absence from work• Fewer jobs available if returning• Home insurance rates (covering windstorms, fire, hail,

lightening, theft, etc.) have also increased • Building costs have increased

– In some case, houses must be raised above flood plain (8-10 ft)

• Cost of living increased--utilities, food, etc.