Affordable Housing Institute : US

[Continued from yesterday’s Part 1.]

 

Even as some Old New Orleanians want a house to come back to, others have come back … to a city different from the one they left.  Again the New York Times:

 

NEW ORLEANS, Feb. 15 — After nearly a decade in the city of their dreams, Kasandra Larsen and her fiance, Dylan Langlois, climbed into a rented moving truck on Marais Street last Sunday, pointed it toward New Hampshire, and said goodbye.

 

What made these dedicated New Orleanians depart?  No one thing:

 

Not because of some great betrayal — they had, after all, come back after losing everything in Hurricane Katrina — but a series of escalating indignities:

 

·         the attempted carjacking of a pregnant friend;

·         the announced move to Nashville by Ms. Larsen’s employer;

·         the human feces deposited on their roof by, they suspect, the contractors next door;

·         the two burglaries in the space of a week; and, not least,

·         the overnight wait for the police to respond.

 

Makes you want to find a way out, doesn’t it?

 

If you’d faced carjacking, job loss, burglaries, loss of public order, and even fecal incivility, wouldn’t you want to leave?

 

A year ago, Ms. Larsen, 36, and Mr. Langlois, 37, were hopeful New Orleanians eager to rebuild and improve the city they adored. But now they have joined hundreds of the city’s best and brightest who, as if finally acknowledging a lover’s destructive impulses, have made the wrenching decision to leave at a time when the population is supposed to be rebounding.

 

Adverse selection applies not just to markets, not just to capital, but also to intelligence.  Those who are smarter have more options, and they leave.

 

Their reasons include high crime, high rents, soaring insurance premiums and what many call a lack of leadership, competence, money and progress.

 

Given that list, it’s a testament to their commitment that the Langlois’ stayed as long as they did.

 

 

In other words: yes, it is still bad down here. But more damning is what many of them describe as a dissipating sense of possibility, a dwindling chance at redemption for a great city that, even before the storm, cried out for great improvement.

 

Dwindling sense?  It’s gone.  A year ago, I said that economic gangrene was setting in.  Obviously, it has spread.

 

Mr. Langlois, who has repeatedly called the health and sanitation departments, the police and City Hall, said he despaired of receiving any response. In November, the couple bought their first house, and in December, they bought their first handgun.

 

I’ve previously observed that economic nature abhors a vacuum, and that there is money to be made in empty houses — by criminals. 

 

“My friends here are just the greatest, hard-working, tax-paying people,” Mr. Langlois said, “and I think a lot of us are feeling under siege.”

 

In a practical short-term sense, they are under siege, and they are right to move.

 

The couple are unlikely to make any money on the sale of their house.

 

Yes, it means walking from the equity.

 

Many times I’ve observed that home ownership changes behavior, particularly in favor of reinvestment and in building (or rebuilding) community.  Leaving that behind is a telling vote of no confidence.

 

Where are all my homeowners?

 

For every household that, like this one, has given up, there is another on the verge.  Tyrone Wilson, a successful real estate agent and consultant, said he and his wife, Trina, a lawyer, had given post-storm life a fair chance. But, Mr. Wilson said, at the end of the school year they are likely to take their three children back to Dallas, where they took refuge after the storm.

“We came back, we tried,” he said. “It’s really draining, and at a certain point you sit down and you say, ‘We don’t have to go through this.’ ”

 

Again adverse selection: the ones we most want to stay conclude they must leave.

 

 

As a city in flux, New Orleans remains statistically murky, but demographers generally agree that the population replenishment after the storm, as measured by things like the amount of mail sent and employment in main economic sectors, has leveled off. While many poorer residents have moved back to the city, the “brain drain” of professionals that the city was experiencing before the storm appears to have accelerated.

 

As Ed Glaeser has documented, there are two very strong predictors of a city’s future growth: its past growth, and the education level of its civilians.  Before Katrina, New Orleans was already losing population (and jobs), and its workforce had among the least educated.

 

“This is a serious problem for the city, because one of the things we had pre-Katrina was the lack of an educated population,” said [Dr. Susan E. Howell of the University of New Orleans]. “We had too many people at the low end and not enough at the high end, and Katrina sort of fast-forwarded that trend.”

 

A city cannot survive that further exogenous shock — at least not in anything like its former configuration.  New New Orleans is spiraling down; at this rate, in forty years it will be less than Galveston (which was Texas’s biggest city, but after the 1900 hurricane lost its primacy to inland Houston).

 

Some say the overall effect is negligible. Greg Rigamer, a demographer who has done work for the city, said that the lack of housing had constrained the recovery, but that many residents remained fully committed to the city.

 

They reinforce each other.  Glaeser’s research has also shown that, in general, the total number of housing accommodations and total population march in lock-step — because they are joined at the hip.

 

It takes a while to master this bipedal motion

 

“The pattern in is certainly stronger than the pattern out,” Mr. Rigamer said.

 

What is Rigamer’s role?

 

But in December, the number of houses on the market peaked at a high not seen since the late 1980s, while the number of sales has trended downward since last June, according to data tracked by the Brookings Institution in Washington. Statistics kept by commercial moving companies show a net loss to New Orleans.

 

Using a commercial mover implies a certain level of affluence; many of the poor move themselves.  But the brain drain continues.

 

There are indications that low-income New Orleanians — those who will need the most help from a cash-strapped city — are making their way back, despite a lack of affordable housing, piling into relatives’ homes and trailers.

 

Communities do form spontaneously; but where are the jobs?  Without jobs, they cannot sustain income, and without income, they cannot sustain the new housing they hope to occupy. 

 

U-Haul, the rental company that is more affordable than commercial movers, has had more inbound trucks than outbound, according to the company’s records, and the number of public school children and new applications for food stamps in Orleans Parish are rising.

 

A too-dispersed, poorer city with a dwindling employment base is structurally uneconomic.  Just ask Detroit in the 1970’s through 1990’s.  Yet New New Orleans has no single strong industry except tourism, and that is the one thing most rapidly scared off by the same factors that drove away the Langlois’s.

 

In Houston, a task force that helps Hurricane Katrina residents resettle has paid more than $1 million in moving expenses for 350 families returning to New Orleans.

 

Against 250,000 or so who left.  Even assuming four people per household, and five times the total volume (Houston was by far the biggest evacuee destination), that’s 3% returning.

 

Not enough flow

 

After Katrina, many of my housing colleagues sought to help New Orleans rebuild.  I admire them.  In some ways, I envy their involvement; I would have loved to do it, hopeless though it be.  And their efforts have made things better.

 

Yes, it’s better than it was

 

But not enough.  The New New Orleans has long since taken shape; it is going to be smaller, and much closer to our pessimistic than optimistic view.

 

 

 

 

I admire those who continue to fight the battle.  But the war for New New Orleans’ future is over. 

 

Not looking good for the city

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