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First Multi-State Hurricane Impact Assessment Released

Economics of Hurricanes Uneven: State Governments Benefit, But Many Local Jurisdictions Struggle to Recover

Labor & Housing Shortages & Slow Pace of Planning & Rebuilding Delay Recovery in all Communities

The Nelson A. Rockefeller Institute of Government of the State University of New York and the Public Affairs Research Council (PAR) of Louisiana presented the first in a series of reports examining the impact of hurricanes Katrina and Rita on 22 jurisdictions across Louisiana, Mississippi, and Alabama.

The report found:

  • What Katrina and Rita took away from the coastal areas they gave in abundance to communities farther inland. Communities out of range of the storm surge have seen their economies grow sharply as a result of increased population and revenues, while areas that were hard hit are rebuilding their economies from scratch.
  • The slow pace of recovery is tied to the limited progress in crafting rebuilding plans. A few communities have rebuilding plans in place; New Orleans, most notably, does not. Without specific information about how and where a community plans to rebuild, residents find it difficult to make their own decisions about rebuilding.
  • Housing and labor shortages cut across the region from Cameron Parish, Louisiana, to Gulf Shores, Alabama. There are not enough workers to fill available jobs, nor is there adequate affordable housing to accommodate them.

“The damage that resulted from hurricanes Katrina and Rita was so comprehensive in scope that ‘hurricane economies’ were created across the Gulf Coast,” said Jim Brandt, president of PAR and co-principal investigator on the project. “These economies are the unforeseen consequence of the two catastrophic events. Some communities are experiencing an economic boom, while others are fighting to recover economically.”

The goal of this report is to provide a baseline look at how the storms changed these communities across a wide spectrum of areas, including the impact on their state and local economies, the progress of their planning and rebuilding process, and the role of nonprofits in the relief and recovery efforts.

“Where GulfGov Reports differs from other studies is in its big-picture perspective. Such a perspective allows us to make comparisons among the jurisdictions damaged by the storms and to see what problems they have in common, what solutions can be adapted from one area to another, and what lessons we can learn,” said Dr. Richard P. Nathan, co-director of the Rockefeller Institute and co-principal investigator on the project.

The economics of hurricanes: Economically, the state governments of both Louisiana and Mississippi have benefited from the storms. That finding in no way minimizes the damage inflicted by hurricanes Katrina and Rita; instead it points out an unforeseen consequence. Despite predictions that the states would need to make severe budget cuts because of the destruction in key areas of their economies, both Louisiana and Mississippi found themselves with surpluses at the end of the 2005-2006 fiscal year, fueled in part by increases in sales tax revenues as residents began rebuilding and replacing what they lost.

At the local level, the picture is more uneven. Several communities have seen noticeable boosts in their economies, others are recovering despite significant damage, and still others are struggling. Communities like East Baton Rouge and St. Tammany parishes in Louisiana, and Jackson, Hattiesburg, and Laurel in Mississippi have benefited from being the destination of choice for residents fleeing the hurricanes. Nearly a year after the storms, their populations and their revenues remain significantly higher than before the storms. Other areas—New Orleans, and Cameron and St. Bernard parishes in Louisiana, and Hancock County, Biloxi and Gulfport in Mississippi—continue to struggle, with some parts of their economies functioning and others not.

“The pace of economic recovery has been uneven, in part because the extent of the damage varied so widely,” said Brandt. “At the same time, the recovery of the most damaged communities has been slowed by the uncertainties surrounding federal plans to revise flood elevation levels, continuing disputes with insurance companies over damage coverage, and the fact that the federal housing aid program is just now getting underway in Louisiana and Mississippi.”

Rebuilding plans: Here again the progress is uneven. New Orleans has no plan at the moment, and the excruciatingly slow pace of the recovery bears witness to that. On the other hand, Cameron and St. Bernard parishes in Louisiana, Bayou La Batre in Alabama, and Biloxi in Mississippi all have developed plans that are in varying stages of adoption or implementation. What seems to make the difference is the ability of local officials to take clear, decisive steps to get the planning process underway as well as provide an opportunity for as many members of the public to participate as possible.

“The importance of a timely planning process cannot be overstated,” said Nathan. “Without clear guidelines from community leaders about what areas will be rebuilt and when, many residents put off making a decision about whether to return, and the longer the delay, the more likely they are to stay where they are. That, in turn, has consequences for any community’s long-term survival.”

It’s the shortages… : Housing and labor shortage problems cut across the region from Cameron Parish, Louisiana, across the Mississippi Gulf Coast, to Gulf Shores, Alabama. There simply are not enough affordable housing options for people in the devastated areas or in those areas where the population has grown sharply, nor are there enough workers to fill available jobs. It is a basic concept: If people have nowhere to live or if they can’t afford to live where they work, it becomes difficult for them to go where the jobs are. The solution, however, is incredibly complex and none of the affected communities has yet to unravel it.

“The end result is that recovery in the struggling areas is being slowed, sometimes to a near halt, while those communities that are growing or rebounding are unable to make as much progress as they might otherwise,” Brandt said.

Nonprofit organizations: Nonprofits and faith-based organizations helped fill a gap in the response by the state, local, and federal governments. In many instances, representatives of these organizations were the first to reach communities devastated by the hurricanes. Although there were some problems—lack of coordination with government officials and with other nonprofit agencies, taking on more than they could handle, managing and organizing the flood of volunteers—the conclusion seems to be that the capacities of nonprofit agencies need to be integrated into state and local disaster response plans.

What we learned: In the end, Katrina and Rita produced two disasters. The first was the immediate crisis created when the hurricanes made landfall. The second was the difficulty various levels of government had in working together to respond to the crisis. This was—and remains—the more dangerous of the two because the inability to work well together has spilled over into the recovery efforts, with ordinary citizens caught in the middle. The long-term impact could be the haphazard rebuilding of the devastated communities, meaning mistakes will be repeated, segments of the population will be left out, and a rare opportunity to reshape a region for the better will be lost.

This report—which was written by PAR Special Projects Manager Karen Rowley—is part of a three-year project being conducted jointly by the Rockefeller Institute and PAR with the help of a $900,000 grant from the Ford Foundation. In addition to the Rockefeller Institute and PAR, the John C. Stennis Institute of Government at Mississippi State University and Jackson State University also are partnering in the network for this project. The Advisory Committee for the project is chaired by former Mississippi Gov. William F. Winter.

“With the release of GulfGov Reports: One Year Later, we have just begun to scratch the surface,” Winter said. “There is so much more to look at in terms of the long-term impact of these storms. Going forward, the project will follow the progress—or lack of progress—of these 22 jurisdictions over the next three years using the network of field researchers we have established. Ultimately, our goal is to provide lessons for how government at all levels can best deal with future disasters and highlight the implications of the form that response takes.”

Click here for a complete text of GulfGov Reports: One Year Later.


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