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Getting it Right: Rebuilding Local Economies After a Natural Disaster

While New Orleans was the first American city in a century to suffer a landscape-scale disaster, it will certainly not be the last.

I’ve spent most of the past five years living in New Orleans researching the city’s recovery, and I’ve thought a great deal about what happens to economies in serious disaster situations. They seem simple, but they inevitably spawn maddening numbers of correlates.


Let me explain. After levee walls gave way and 80 percent of New Orleans flooded, the city faced the greatest urban economic crisis in American history. But that’s not all. It also faced the country’s greatest urban housing crisis, education crisis, medical care crisis, transportation crisis, and infrastructure crisis—all rolled up into one. Solving one required solving them all.

Doug Ahlers, a member of New Orleans Mayor Ray Nagin’s Bring New Orleans Back Commission, colorfully recalled how paralyzing it was to face such an array of problems. “The first few months, all we were doing was turning over rocks and seeing what creepy-crawly things were under them,” he said. “As we looked into each issue, all we found were complex problems. They were all interrelated; each solution was dependent on other problems we were trying to solve simultaneously. It was like trying to untie a Gordian Knot.”

Many survivors faced chicken-and-egg problems as they struggled to rebuild their homes and communities. They could not move back without schools for their children, for example, but schools could not reopen without students to attend them. The city faced similar problems writ large. The municipal government could not begin to rebuild infrastructure or restore services until its tax base returned—Katrina bankrupted City Hall overnight—but the tax base could not come back without these supports. After losing most of its clients, the city’s power utility had little choice but to drastically cut its repair budget, even as thousands of blocks remained without power. Most residents would not return to a city without a functioning hospital, but hospitals could not reopen without patients to treat or places for their staffs to stay. Besides, doctors and nurses would not come back to the city without schools for their children. The list went on and on.

The task New Orleanians faced, as Ahlers explained, was nothing short of “restarting an ecosystem.” Such a biological analogy was apt, given the interdependence of every aspect of life in the city. Like the first green shoots poking through the ash of a volcanic eruption, the first residents to return to flooded neighborhoods were hearty and relatively self-sufficient. “This place is for pioneers,” one man told me.

As months passed, the city and state governments remained paralyzed, and meaningful aid from Washington was slow to arrive. Consequently, returning residents began organizing themselves at the neighborhood level, with more than a few memorable and dynamic leaders emerging to take charge. On their watch, New Orleans neighborhoods became small governments. At first, they called returning residents together to ward off demolition threats and write recovery plans. Over time, they went on to found community schools, open volunteer centers, raise funds to rebuild fire stations and libraries, pass self-taxing initiatives to fund community improvement work, and convince tens of thousands of skeptical residents to return home.

City services, businesses, utilities, schools, and other necessities of daily life slowly returned as well. Just as bold residents led the charge to rebuild flooded neighborhoods, leaders in these other fields stuck their necks out and took a chance on the city’s future. The superintendent in St. Bernard Parish, just downriver of New Orleans, shocked her community when she managed to reopen a public school only a few months after floodwaters drained. Soldiers and contractors flocked to the Red Fish Grill, the first French Quarter restaurant to open after the storm. With each returning institution, the social and economic web that supported life in the city grew stronger. Recovery, in this way, became a virtuous cycle.

Unfortunately, endogenous initiative and cooperation have not been enough to bring everyone in New Orleans home. No city, after suffering such a catastrophe, could rebuild without substantial outside financial assistance and leadership. Much of this outside help must come from the national government, and indeed, New Orleans eventually received a great deal of federal assistance. Nevertheless, in light of the damage it suffered, the city received too little help too late. For example, a vital rebuilding grant program for homeowners suffered massive backlogs and multi-year delays after the state hired a private contractor to process applications and distribute funds. Consequently, tens of thousands of families remained unnecessarily displaced.

“The legitimate object of government,” Abraham Lincoln said, “is to do for a community of people whatever they… can not so well do for themselves in their separate and individual capacities.” Swift, decisive, and well-funded government intervention in a disaster’s wake serves just such a function. It helps to restore confidence, break through “chicken and egg” conundrums, and speed a recovery. Getting this right is important, because while New Orleans was the first American city in a century to suffer a landscape-scale disaster, it will certainly not be the last.

Tom Wooten is the author of "We Shall Not Be Moved: Rebuilding Home in the Wake of Katrina."

Community meeting photo by Tom Wooten.

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