Becky Houtman

Who really holds the keys?

I had to wonder whether it was with deliberate irony that yesterday’s Times Picayune placed the article N.O.’s plan for rebuilding passes Muster with LRA immediately beneath LRA feeds Road Home kitty, with it’s handy inset showing of the approximately $1 billion the state is adding to the Road Home program, $577.5 million is coming from CDBG funds previously slated for infrastructure repairs, and another $50 million was “carved out of other recovery spending areas” by the LRA. (The amount to be doled out for New Orleans rebuilding is $117 million – of the $1.1 billion that “officials” (whoever they are these days) say we need.) Oh, and that doesn’t count the $513 million the LRA now has access to since the 10% match of federal funds requirement was waived – $513 million the LRA had earmarked for parish recovery projects, of which New Orleans was to receive $324 million – so they can sit on it in case the state needs to ante up even more cash to help close the Road Home gap.

Today’s TP editorial, A good faith effort, claims that “repairs to storm-damaged state buildings and construction of a replacement for Charity Hospital in New Orleans,” which were to be paid out of the $577.5 million would be paid out of the state’s budget, but forgive me if I’m skeptical.

What really infuriates me is the nearly blind eye being turned to the source of a sizable chunk of the Road Home gap: insurance underpayment, to the estimate tune of $2.7 billion. To be fair, in May Blanco and Walter Leger recommended that the state pursue claims on the behalf of cheated policyholders – after all, what hope can individuals have suing the colossi piecemeal (the insurance industry is the only other field besides Major League Baseball exempt from antitrust regulation, making the combined insurers a pretty daunting monolith). But it looks like, yet again, insurers have passed the buck to taxpayers, and worse, the state and federal governments have chosen to bleed the programs that are underfunded already. Big surprise.

This is yet another instance of why the entire state and nation should be taking heed of Louisiana’s and Mississippi’s situation. Insurers – property, health, auto, etc. – are as consequence free everywhere as they are here. The number of ways in which the system is scandalously broken is too great for me to digest, but PLEASE check out the Insurance Transparency Project for much more – inspired by, but not exclusive to, Katrina’s insurance aftermath.

photo by Fiona Cooper

A belated hat-tip to Maitri for pointing out that the glowing quotes from Andres Duany about New Orleans being “the most organized, wealthiest, cleanest, and competently governed of the Caribbean cities,” and singing the praises of our music, food and culture are excerpted from a BusinessWeek.com article culminating in the recommendation of

“…an experimental ‘opt-out zone’: areas where one ‘contracts out’ of the current American system, which consists of the nanny state raising standards to the point where it is so costly and complicated to build that only the state can provide affordable housing – solving a problem that it created in the first place.”

There’s another name for the sort of “opt-out zone” he’s proposing, and that’s shantytown (he’s not the only one: economist Tyler Cowen explicitly suggests a shantytown reconstruction here). Duany, who is famously prickly about affordable housing (preferring, in true New Urbanist form, fantasies of past “good” poor neighborhoods bustling with Sesame Street-like cheerful activity), has finally announced what sort of decanter he’d like to pour the monoculture of poverty into, but he hasn’t yet proposed where to put it. Probably not in the vicinity of the Cuban-esque Marigny Creole Cottage that inspired his epiphany about New Orleans culture.

Another of Duany’s good-old-days fantasies is that:

“Until recently this [building by one's self, or by barter] was the way that built America from the Atlantic to the Pacific. For three centuries Americans built for themselves. They built well enough, so long as it was theirs. Individual responsibility could be trusted. We must return to this as an option,”

forgetting that if one’s home burned down, flooded or collapsed, one was left with nothing, however individually responsible one was. Also forgetting that New Orleans’ building-code history actually pre-dates our Anglo-American period that Duany insists will kill our culture – when the Spanish acquired Louisiana and decided it was a bad idea to keep letting the Vieux Carre burn down every few years.

Could there be less red tape in permitting? Of course. Is building according to safety standards more expensive than not? Naturally. Will debt be hard to bear for those who must rebuild or restore homes that were previously paid off? Afraid so, although it seems like addressing that problem ought to entail putting insurance companies feet to the fire, eliminating the Road Home restriction to awards based on “pre-storm value” rather than real rebuilding costs, and holding the Army Corps of Engineers accountable for its negligence, before throwing up our hands in defeat and suggesting that standards and safety should be considered luxury commodities.

The materials for these new pioneer opt-out homes had better be damn cheap or free (maybe salvaged off of the moldering ruins of abandoned properties – blight and affordable housing, two birds with one stone!), since no lending institution is going to approve even a modest amount for a building with no insurance, which is another item this experimental zone will be opting out of. (And, should another disaster occur, the naysayers who question New Orleans’ “right” to exist in the first place will crow the world’s loudest told-you-so.) Will Entergy turn the gas and lights on with no assurance that the wiring etc. was professionally done? (No doubt it’s more romantically Caribbean to dine by candlelight.)

No insurance also means no legitimate business even if one has the means to start up without a loan. Liability, workers comp, and other forms of insurance required are hardly likely to be obtainable either, let alone business, as opposed to building, permits. But no matter – illegitimate business is full of the plucky New World entrepreneurial spirit, and organized crime already loves “lending” and “insuring.” Maitri wrote that one of her first thoughts on reading about what a well-run Caribbean city we have was “tell this to the families of murder victims whose killers walk the streets due to inefficient government.” A criminal justice system is one of our government “nannies,” and ours is so abysmal right now that faced with an Opt Out Zone, opting out is probably what it would do too.

Maitri explains better than I can how wrong it is to conflate laissez-faire culture with laissez-faire governance – under the latter, the bon temps doesn’t roule so well. But beneath the fawning over the Caribbean value of enjoying quality of life before retirement, sometimes by sacrificing a bigger salary (but not necessarily by not working much, as he implies – someone should remind him of how much laundry gets done on Mondays while those red beans are slowly simmering) laissez-faire economics are what “New Orleans: The Wealthiest City of the Caribbean” is all about. And plenty of lives were just as nasty, brutish and short in the Old Free-For-All Urbanism that the New kind selectively appeals to as they are now (what shall we opt out of next? child labor laws? wouldn’t little chimney sweeps be cute, crawling up the flues of all those gas- and electric-free houses? how retro).

Someone please tell me that The Onion bought BusinessWeek, and a super-star urban planner did not just go down that road, or I’m going to have to opt out of what little sanity I have left.