Katrina: After the Flood (56 page)

Barbara Major was among those charging that the charters were cherry-picking the system’s better students to keep their scores up and leaving slower learners and their parents to fend for themselves. The Southern Poverty Law Center sued the state and Orleans Parish schools for shortchanging the education of forty-five hundred special-needs students.
^II
Teach For America, which was supplying the local schools with fresh college graduates, almost all of them white, was another flash point. Depending on whom you asked, the Teach For America kids were recent college grads whose youthful exuberance enlivened the classroom or clueless interlopers set loose inside the schools after a five-week summer-training program.

The demand for affordable housing in New Orleans continued to outstrip supply. Around the United States, an alarmingly high 40 percent of all renters spent more than 35 percent of their income on housing. In New Orleans five years after Katrina, that number topped 60 percent. More than three thousand names were on the waiting list for public housing in New Orleans, and another twenty-nine thousand people were still hoping for a federal housing voucher that would cap the amount they paid for housing at roughly 30 percent of their income. Further limiting people’s options was a public transportation system that had 60 percent fewer riders than it did pre-Katrina and therefore couldn’t afford to offer the same service as before the storm. Meanwhile, thousands lived in their ruined homes because they couldn’t afford to live anyplace else.

New Orleans had a decent mental health care system prior to Katrina. But Charity Hospital was closed and Governor Bobby Jindal in 2009 cut off funding for the adolescent mental health facility the state operated in New Orleans. The city had endured a terrible trauma yet lost dozens of psychiatric beds along with hundreds of mental health professionals. Five years after Katrina, the suicide rate in New Orleans was still at least twice as high as it was before the storm.

Not all the news was bad as the city approached the fifth anniversary of Katrina. Civic engagement was higher than ever in the Big Easy, a locale historically short on activism even in the face of a dysfunctional government and monumental social problems. “I must’ve gone to three hundred meetings in the first two years after Katrina,” said Lakeview’s Miss Rita—Rita Legrand. Before Katrina, she never attended any. A notoriously weak public defender’s office was transformed post-storm into a well-functioning one. Charity Hospital wouldn’t be reopening, but a spate of community-based clinics had opened around the city, providing the poor better access to preventive care and other health services. Arts organizations were generally strong in an environment where foundation money was available to groups working to preserve the city’s culture.

Legions of young college grads resettled in New Orleans after Katrina. Some were idealists who had shown up to help rebuild the city after Katrina and never left (the YURPs, they were called: young urban rebuilding professionals); others were hipsters and artists and self-described “gutter punks” who saw in New Orleans a cheap way to live in a city with a vibrant music scene, great food, and a unique culture. Locals complained about the high rent, but outsiders saw a bargain when it was stacked up against prices in Brooklyn or the San Francisco Bay Area. Others saw financial opportunity in a town enjoying a kind of mega-stimulus program, fueled by billions in recovery dollars, while most of the rest of the United States was slogging through a recession. “For the first time in decades,” the
Times-Picayune
reported, “New Orleans is attracting waves of young professionals.” Entrepreneurs were creating new businesses at a pace greatly outstripping pre-Katrina numbers. Even wages were up in New Orleans, as was median family income. Just as Jimmy Reiss and his allies had hoped when dead bodies were still
in the streets, while the city’s poorest residents were still having a hard time returning, the city would be more prosperous.

THE FIFTH ANNIVERSARY OF
Katrina fell on a Sunday. A light, steady rain fell all day. There was the customary tolling of bells and prayer services, and also a large demonstration occurred in the Lower Ninth Ward, where more than a thousand people showed up to protest the lack of progress in their neighborhood. Maxine Waters, a high-profile congresswoman from Los Angeles, black, took aim at “low-down, dirty insurance companies,” Road Home, and also the charter-schools experiment. “We want our public schools back,” Waters said to loud applause.

Barack Obama came to town for the fifth anniversary. He had been heckled the first time he had visited New Orleans as president (“We’re working as hard as we can,” a defensive Obama had said). This time he arrived intent on proving his commitment to the city. A few days before Air Force One touched down in New Orleans, the administration had announced a $1.8 billion school construction grant—a lump sum that parish officials could spend as they chose, without needing FEMA to sign off each time they decided to rebuild a school. On a stage at Xavier University, a historically black college that had been rebuilt since the storm, Obama reiterated a pledge he had made as a candidate to restore the coastal wetlands and declared that the area’s new flood-protection system—what he called “the largest civil works project in American history”—would be ready by the next hurricane season. “My administration is going to stand with you, and fight alongside you, until the job is done, until New Orleans is all the way back,” the president said.

Mitch Landrieu spoke that night at the refurbished Mahalia Jackson Theater in Tremé. He reminded people of the ways New Orleanians had come together after Katrina: “Young black boys pushing an old white man in a rusted wheelchair to find water,” he said. “An old white woman holding the hand of a crying black girl who had lost her mother.” That, he said, should be their template. “To become the city of our dreams, we must follow a righteous path guided by the lessons learned from Katrina. Love thy neighbor, our diversity is our strength, never give up.” His next lines he would repeat throughout his mayoralty: “We are not rebuilding the city we were. We are creating the city we want to become.”

I.
The hopes of people in the Lower Ninth and St. Bernard Parish would be revived when, in May 2015, another federal judge, ruling in a second MR. GO case, ordered the US government to compensate homeowners and businesses for at least some of their flood losses.

II.
The suit was settled at the end of 2014 when the authorities agreed to many of the policy changes that parents and their advocates were demanding.

25

BLIGHT

Alden McDonald’s grim survey of New Orleans East began in a large boardroom down the hall from his office. Five years after Katrina, on the sixth floor of his bank’s headquarters, the flood seemed as if it had happened twelve months earlier. The east-facing windows looked out onto a stretch of emptiness that had once been a giant mall. Where once there had been stores, now there was just asphalt and weeds. Read Boulevard—the next exit up the highway—loomed in the middle distance. McDonald pointed out a tan building around the same height as his: the vacant “thodist” hospital (the first two letters in the sign
METHODIST
had fallen off). The hospice next door was boarded up, as was a black office tower once filled with doctors and other professionals.

The windows on the north side of this glass box more or less at the East’s epicenter offered an equally bleak picture. A pair of large, empty parcels on the other side of the I-10, the former sites of a Walmart and a Sam’s, were now just giant wounds on the landscape. The three-story office building next to McDonald’s was shuttered, as was the shattered green-glass rectangle on the other side of that. McDonald pointed out several more office buildings: “Empty, empty, empty.” Before Katrina,
more than a dozen office buildings were in that part of the city. “I’m still the only one open in the East,” he said, yet he still had plenty of vacancies. Five years after Katrina, his building sat half-empty.

McDonald continued his tour of the battered East behind the wheel of a black Lexus sedan. Near his office were a trio of strip malls. “All of them one hundred percent occupied pre-Katrina,” he said—all three now vacant. Nearby an abandoned nursing home and a two-story, brick rehab center were covered in graffiti. The next exit off the interstate and the one after that offered more of the same: stretches of boarded-up strip malls and destroyed businesses. A Days Inn had reopened along the highway and also a Comfort Suites, but he pointed out two other motels that had slashed their prices and reopened as flophouses for transients. There were several car dealerships and gas stations, a few places to grab food, but not much else.

“We have no jobs out here,” McDonald said. “We have no commercial business to speak of.”

McDonald occasionally left a main artery to dip into a subdivision. Lake Forest Estates—McDonald’s old neighborhood—was faring better than most. So, too, was Spring Lake, which benefited from an active neighborhood group. Yet both were littered with ruined homes on every street. Less fortunate communities weren’t even one-third back. “It’s like the ULI had warned us—the jack-o’-lantern effect,” McDonald said. Prior to Katrina, New Orleans East was home to four Catholic churches. Five years later, only one had reopened.

McDonald the banker had identified patterns in the repopulation of the East. The first people to move home were invariably those who only recently had taken out a mortgage. They owned so little equity in their homes that it was likely the bank would end up with all their insurance and Road Home money. “They had to rebuild or they’d be walking away from their down payment,” he said. He watched others use Katrina to pick up a house they could never have afforded before the storm. “You have a whole new class of people who are moving in,” McDonald said. “People who got big insurance checks, money from Road Home, seeing an opportunity to move up.” He might have done the same if he were in their position, but it all changed the feel of the community. “Neighbors aren’t connected like they were before,”
McDonald said. “Where in the past someone might know ten people on their block, now they know four.”

Eating in New Orleans East still meant fast food, a food truck, or a temporary perch in one of a few open take-out places, so McDonald headed west toward the center of town. As lunch approached, McDonald took a detour first through the Seventh Ward, where he had grown up, and then Gentilly, where Liberty was focusing a lot of its post-Katrina efforts. If anything, the Seventh Ward was starker than New Orleans East, with more shuttered businesses and wrecked homes still sporting the National Guard’s conspicuous Katrina tattoo. Forty percent of its residents were still missing, according to the 2010 census.

McDonald’s mood brightened once he passed into Gentilly. He showed off the half-wrecked building he had bought under a government program created to encourage investment in blighted neighborhoods. He planned to turn it into a professional building. He had bought a wrecked mini-mall nearby under the same program. “At least there’s life back here,” he said.

Those were modest investments compared to the $20 million loan fund the bank had created to help those who still didn’t have enough money to rebuild fully after insurance and Road Home. (Liberty set aside another $20 million for a similar loan fund for homeowners in the Lower Ninth.) Called the Gentilly Homeowner Initiative, the program began with a survey of the community’s needs. That’s how McDonald learned of a working couple with three children squeezed into the two rooms they had had the money to rehab. They needed around $80,000 to finish the rest of the house, but both worked service-industry jobs and didn’t make enough to justify a loan half that size. McDonald’s people would need to play a role closer to that of case manager than loan officer. “We partnered up with nonprofits able to give them free labor so they’d only have to buy supplies,” McDonald said. Sometimes that meant working with Connie Uddo’s organization. “We’re trying to find creative, nontraditional ways to help people.”

Lunch was at Dooky Chase’s, a favorite of the black professional class (George W. Bush and Barack Obama have both eaten there). Over Leah Chase’s signature fried chicken and sweet-potato salad, McDonald talked about his life since the storm. He and Rhesa couldn’t be happier in
their home along Bayou St. John. It was as if they had found a little bit of Uptown in a hidden part of Gentilly: a two-story, white clapboard house with a closed-in porch. But that brought into relief the disparity between his life and that of so many of his neighbors. For Rhesa’s sixtieth birthday that year, he had spilled a few thousand dollars on a blowout party at Bullet’s, a popular local club, and bought her a new Lexus SC 430 sports car. Yet a preoccupation during his driving tour of battered New Orleans were those of modest means trying to get by in a city where the price of everything from rent to property taxes to insurance had gone up.

The bank was thriving even as the eastern half of New Orleans struggled. McDonald was the focus of a long, flattering profile in the pages of
American Banker
—his second in two years. This time the magazine’s focus was McDonald’s plan to transform Liberty into the country’s premier community-development bank. As McDonald explained, a wealth of government programs offered tax credits and similar incentives to any entrepreneur funding projects in a moribund community. That would be the focus of a failed bank Liberty had just bought in Detroit and also the one it had acquired in Kansas City a couple of years earlier. That would become a greater part of Liberty’s focus in New Orleans as well.

Liberty was operating twenty-four branches in six states, but McDonald told
American Banker
he felt they weren’t running anywhere near their potential capacity. He was convinced that bad subprime loans meant too many banks were still struggling to survive—and he was intent on ensuring Liberty remained hunter rather than prey. That was one advantage of having lived through Katrina: “I know distressed loans better than anyone else.”