Katrina: After the Flood

by Gary Rivlin

  Those in attendance, however, seemed only interested in what the Bring New Orleans Back Commission might be saying about their community. They were incensed mainly about Canizaro’s call for a 120-day moratorium on all new city permits. All around the city people were tired of fighting FEMA and battling insurance adjusters. Now the city was proposing another roadblock to recovery. “Please let us build our own homes,” pleaded a Lakeview homeowner named Charles Young. “Let us spend our insurance money, which we paid for on our own.”

  “This is a big, audacious plan put together by obviously brilliant people,” said Freddy Yoder, the FEMA contractor on the board of the Lakeview Civic Association during his turn at the mike. “But you missed the boat. We don’t need a rail system. We need housing.”

  Those were among the day’s more measured comments. Harvey Bender, a laid-off city worker from New Orleans East, opened his remarks saying, “I don’t know you, Joe Canizaro, but I hate you.” He then threatened to “suit up like I’m going to Iraq and fight this.” Mtangulizi Sanyika, a professor of African World Studies at Dillard University, represented a group called the African American Leadership Project. He accused the mayor of taking part in a “Katrina cleansing” that would let the city’s moneyed interests steal African-American lands. Carolyn Parker, a resident of the Lower Ninth Ward, was more succinct. “Over my dead body,” she told the commissioners. Another speaker decried a plan that would turn “black people’s neighborhoods into white people’s parks.”

  Canizaro defended his plan. He reminded people of how much of themselves they would be giving and how much of their hard-earned money they would be spending with no guarantee that their neighbors would return. “The city may not be able to provide services if you’re stuck out there by yourselves,” he said. But Canizaro had lost the room even before the lights were dimmed. “Telling people they can’t rebuild for four months is tantamount to saying they can’t ever come back,” said former mayor Marc Morial when it was his turn at a microphone. “It’s telling people who have lost almost everything that we’re going to take the last vestige of what they own.”

  If the vast majority of those at the Sheraton that day thought the Bring New Orleans Back Commission had overstepped its mandate, some living in the high-ground neighborhoods felt that Canizaro had not gone nearly far enough. The reaction of John Kallenborn, the head of Louisiana operations for JPMorgan Chase, was typical. To him a four-month time-out while everyone talked more was nothing but a way of postponing the inevitable. Kallenborn, who had been on the mayor’s short list for the commission (he was removed to make room for a black member), pointed to Scott Cowen, who as Tulane president had laid off more than two hundred faculty members and eliminated several academic departments. Cowen was getting grief from alumni, but he was also confronting an estimated $200 million in losses. The city, by contrast, Kallenborn said, was offering Canizaro’s “crazy, halfway ideas that please no one.”

  Janet Howard, another Uptown fixture, agreed: “There are some very tough decisions that have to be made here, and no one relishes making them.” Howard, a former corporate lawyer, had reinvented herself as a government policy expert. “But to say that people should invest their money and invest their energies and put all their hope into rebuilding, and then we’ll reevaluate in a year, that’s no plan at all.”

  LARGE CROWDS MILLED AROUND after the big meeting at the Sheraton. Canizaro would have been excused if he had escaped via a side door, but instead he headed into the audience. He was intent on finding Harvey Bender, the man who had gotten so personal when voicing his anger over the rebuilding plan. Bender had pointed an accusatory finger at Canizaro and bellowed, “You’ve been in the background scheming to take our land!” Early on, Canizaro had vowed to buy no real estate or take part in any new developments—to avoid the kind of charges Bender had just made. “I wanted to set the record straight,” Canizaro said. “I wanted him to know I wasn’t going to make a dime off any of this.”

  Bender was shocked when Canizaro asked for a minute of his time. Bender had attended some of the New Orleans East meetings that the Wall sisters had helped to put together in Baton Rouge. There, Canizaro was the bogeyman, the rich developer who had brought the ULI to town as a first step toward taking their land. A few days later, Bender was sitting on a silk couch in the corner of Canizaro’s office. When Canizaro invited him to stop by, Bender asked if he could bring a few allies, but he ended up coming alone.

  “He just wanted to hear my ideas for what we should do,” Bender said. “My thing was that people had no idea what was going on. One day we’re hearing we’re rebuilding the whole city, the next people are talking about taking our homes. I just wanted to make sure everyone had the right to make up their own mind.”

  RAY NAGIN WAS NONCOMMITTAL. Talking to a gaggle of reporters as he left the Sheraton ballroom, he stressed that they were just at the proposal stage, but also added, “The realities are that we have limited resources to redevelop our city.” The following day, Nagin met with the president. There were no alcohol-free beers or late-night cigars this time, only a brief tour through the parts of the city that had remained dry. “The contrast between when I was last here and today . . . is pretty dramatic,” Bush said. “It’s a heck of a place to bring your family.”

  Nagin seemed to endorse the Canizaro plan at a public hearing the following day when he said, “It’s the way we’re going to go, with some tweaks.” Reporters assumed he meant dropping the idea of a temporary moratorium on permits. But then the mayor sat down with David White, the friend he had given a spot on the Bring New Orleans Back Commission. “I told him that from a planning standpoint, it probably made a lot of sense,” White said. “But from a human standpoint, it made no sense at all.” There were also the politics to consider. “A lot of people in the black community were looking at the first property they ever had in their family,” White said. And with the mayor’s race only a few months away, White counseled, “It sounded like the government was talking about taking that property away.” One week after declaring his support for Canizaro’s plan, Nagin announced that one of his “tweaks” would be his opposition to any proposal that limited people’s choice to rebuild wherever they chose.

  “I’m a property-rights person,” Nagin said. “I have confidence that our citizens can decide intelligently for themselves where they want to rebuild.” Anyone wanting a building permit, he said, was welcome to stop by City Hall to pick one up.

  CANIZARO’S URBAN PLANNING REPORT had only been the first in a series of presentations the commission was unveiling that month. The education committee, headed by Scott Cowen, called for more autonomy for individual schools and greater accountability. The commission’s government effectiveness committee endorsed the idea of consolidating the city’s seven elected property assessors into a single office. Its economic-development committee stressed the need for the city to revive its port, by modernizing and pursuing new business. By then, though, no one seemed to be listening.

  Despite the mayor’s words, Canizaro was acting as if his plan had Nagin’s full blessing. He announced that Ray Manning and Reed Kroloff would be heading up the neighborhood planning process that his committee had recommended. Neighborhoods would start meeting by February 20; by March 20 they would need to have a list of residents committed to returning. By May 20 the buyouts would begin. Kroloff and Manning identified a dozen teams of experts and even worked up a budget of between $6 million and $8 million. Apparently, a FEMA official speaking without authorization promised Canizaro and others that the agency was good for the money but then his replacement said that funding such an effort was forbidden under the law.

  In February, the City Council decided to hire its own planning team. Their experts would help people rebuild rather than make up their minds. The council used $3 million in community development funds to hire the technical consultants needed to make their plan a reality. Meanwhile, the Louisiana Recovery Authority, unlike the Bring New Orleans Ba
ck Commission, had the statutory authority to approve or disapprove projects that the federal government would be funding through the state. Sean Reilly, a two-term state legislator who had made a fortune in his family’s outdoor-advertising business, was the most outspoken of the LRA’s members. “Someone has to be tough, to stand up and to tell the truth,” Reilly said. “Every neighborhood in New Orleans will not be able to come back safe.”

  People were upset when two weeks after Canizaro’s presentation, the president devoted only 160 words in his State of the Union speech to what some were calling the biggest disaster in US history and failed to mention New Orleans. But then, the mayor had promised Bush a blueprint for rebuilding by the end of December. Here it was the end of January and the federal government still didn’t have a plan to act on.

  Nagin meant it when he said he would not stand in the way of anyone wanting a building permit, no matter where in the city he or she lived. “People want permits to let them rebuild, let’s give ’em permits,” he told Greg Meffert, whose portfolio included the city’s Department of Safety and Permits. Meffert shifted extra inspectors and other employees to the eighth-floor permits office. He reprogrammed the touch-screen kiosks the city had installed pre-Katrina and set them up in a large, open room at the end of a hallway. Roving “greeters” were assigned to help people in the fashion of airline agents working the check-in machines at airports. Others talked to people waiting on a line that on some days reached out the door to Poydras. “We’d literally see thousands of people in a week,” Meffert said.

  A homeowner had to do more than show up. For many the sticking point would be the number grade the city had already slapped on tens of thousands of homes across the flood zone. The grade had been determined in a fast and dirty process based on the elevation of the floodwaters in a community, the number of feet the first floor sat above the ground, and whether a home had a second floor. The scores had a ridiculous specificity—a piece of paper would declare a home 53.14 percent damaged—though these were at best a good guess. The expertise of the assessors was also questionable. To help it rate each house, the city had hired the Shaw Group, one of the big multinationals FEMA was using to oversee the cleanup (the federal government also used them to do construction in Iraq). The Shaw Group turned it over to subcontractors who, the Times-Picayune revealed, hired a pet groomer and a pizza deliveryman as inspectors.

  Yet the number mattered. A number below 50 percent meant that, in the eyes of the government, you were renovating your house, not rebuilding it. Even if the federal government declared that homeowners needed to raise their homes to qualify for flood insurance, anyone with a number below 50 percent was grandfathered in. Meffert’s problem was that his inspectors had saddled the majority of homeowners with a damage assessment above 50. The city would issue a permit to those with a score above 50 if they presented a plan for raising their home—which could cost tens of thousands of dollars, or as much as $100,000 if a home needed to be lifted above the cement slabs common especially in New Orleans East.II So Meffert created a quick appeals process that he programmed into the city’s kiosks.

  A new number below 50 percent wasn’t automatic. Those with a damage assessment in the high 50s were treated differently from those clutching a paper showing a number in the low 50s to mid-50s. People had to put up some kind of argument to challenge the original assessment. Yet almost 90 percent of those asking for a number below 50 percent received one. By early February, the city was issuing as many as five hundred rehab permits a day.

  The Times-Picayune had already published a long story on what was going on when the tale of the shrinking damage assessments made page one of the New York Times. Within forty-eight hours a quartet of unhappy FEMA officials stormed Greg Meffert’s office, threatening him with legal action. “They’re in my office yelling about how if I don’t cease and desist, they’re going to stop reimbursing homeowners and stop reimbursing the city,” Meffert said. But he worked for Nagin, not for FEMA, “and I had the mayor and others telling me, ‘You must do this.’ ” The city’s permits office would continue revising downward people’s damage assessments.III “That’s why Ray Nagin loved Greg,” Sally Forman said. “He knew he could give something to Greg and Greg would make it happen.”

  Those committed to the long-term viability of the country’s federal flood-insurance program were not amused. The US taxpayer pays for the heavily subsidized flood insurance program, and in return municipalities must enforce the government’s guidelines. “If New Orleans is phonying the damage reports so as to allow inadequate construction,” said a former flood-insurance director, “they ought to get thrown out of the program.” Said another, “You can’t destroy the flood program to achieve a short-term goal.” But for Meffert, it underscored the extraordinary moment they were living through, when putting his thumb on the scale could have this profound an impact. “That was really the tipping point,” Meffert said. “We were rebuilding the whole city no matter what anyone else decided.”

  SHORTLY AFTER THE SHERATON meeting, Nagin was in Washington testifying before Congress. The mayor used that moment in the national spotlight to plead for help. His city was broke, he said, and people needed trailers. More than twenty-one thousand names were on a waiting list, but five months after Katrina, FEMA had delivered only thirteen hundred trailers. Meanwhile, he watched as the federal government allowed its contractors to fritter away millions. His people did some calculations, he said. FEMA was paying $43 a cubic yard to haul away debris. But FEMA subcontracted to a subcontractor to a third subcontractor, who hired the people to do the work for $7 a cubic yard.

  “I have been put in a position to fly back and forth between Baton Rouge and Washington, DC, to beg and grovel for money, and I don’t appreciate it,” Nagin said. “I implore you. I beg you. I’m getting on my knees, I’m puckering up. Help us. Help us today.” He was back two weeks later to plead with the White House. He asked them for between $10 billion and $15 billion to help him rebuild New Orleans. You’re asking for way too much money, they told him.

  The news wasn’t all bad. Before the end of 2005, Congress had approved $11.5 billion in block grants to help storm-ravaged areas, a measure the president signed. But Louisiana received barely half that money, though its people suffered three-quarters of the damage. The city’s best hope was still the Baker bill. Let people complain that the government would be reimbursing at 60 percent of a property’s pre-Katrina value, not 100 percent, but at least Baker’s proposed Louisiana Recovery Corporation put the federal government on the hook for tens of billions of dollars. And it wasn’t as if there were many viable alternatives in a Washington where Republicans controlled both the House and the Senate. Even Baker himself, a free-market conservative from the Baton Rouge suburbs, couldn’t believe he was championing a measure that would make the federal government, at least temporarily, the largest landowner in New Orleans.

  At first, the White House had flinched at this idea of a giant buyout bill with an open-ended price tag. In response, Baker added cost controls and, shortly into the new year, declared the odds better than even that it would pass. Yet the price tag turned out to be only one concern. The president had run on the idea of shrinking government, yet Baker’s plan called for its expansion. It didn’t sit well with some that those who’d bought flood insurance all those years would be treated the same as people who’d failed to do so. And then the government would be getting into the real estate business—a realm that Gulf Coast recovery czar Donald Powell thought better left to the free market. By the end of January, the Baker bill was obviously dead.

  The governor was in Washington for the State of the Union address at the invitation of the White House. “I went hoping the president would share with us what his plan was for Louisiana,” Blanco said. Instead she heard a few lines about all the country had already done for the people of the Gulf Coast before receiving a televised presidential kiss on the cheek afterward. “It’s time to play hardball, as I believe that�
��s the only game Washington understands,” Blanco declared one week later in a speech before the state legislature. The next day, she threatened to block oil and gas leases worth hundreds of millions to the federal treasury unless the state received its “fair share” of the revenues.

  The threat worked. It helped that the state and New Orleans had a good ally in Donald Powell. Powell, a working-class kid from Amarillo, Texas, listened more than he spoke in his first month as the region’s liaison to the White House. He met with top decision makers, but he also put on jeans and boots and talked to people he met while walking different parts of the city. “I went with no preconceived thoughts,” Powell said. “And I realized that while Mississippi was an act of God, Louisiana was an act of God and man.” On the sly, Powell was also meeting with Sean Reilly of the Louisiana Recovery Authority. Together, the two of them had hatched a plan that would help make drowned-out Louisiana homeowners whole. Road Home, the governor eventually dubbed it. Under Road Home, every homeowner would receive up to $150,000 in compensation based on the pre-Katrina value of the home minus whatever insurance payments were received. (A person owning a $250,000 home who received $150,000 in insurance payments would, for example, receive a check for $100,000.)