Has Obama Kept His Promise to New Orleans?

Mostly, yes. But by failing to reform Bush-era laws on housing, the administration has allowed the Crescent City's recovery to drag.

Getty Images

President Barack Obama made a campaign promise that he would not leave New Orleans and the Gulf Coast hanging in their post-Katrina recovery. As the fifth anniversary of that tragic storm approaches, it's time to take inventory of how much Obama has lived up to that promise.

Since Hurricane Katrina and the levee-breaching floods that began on August 29, 2005, New Orleans and Gulf Coastal communities have endured two more damaging shocks: the recession and the BP oil spill. Three lesser blows also rocked the region via Hurricane Rita, which tailgated Katrina, and Hurricanes Gustav and Ike, which delivered a double punch in 2008. The recession and the oil spill both happened on Obama's watch, though the economic tumble began during -- and has largely been blamed on -- the George W. Bush administration. But each hit has interrupted efforts of the Gulf Coast cities to rebound.

Tucked away on the White House Web site under a tab labeled "Additional Issues,"you can read the renewed presidential commitment: "President Obama will keep the broken promises to rebuild New Orleans and the Gulf Coast. He and Vice President Biden will take steps to ensure that the federal government will never again allow such catastrophic failures in emergency planning and response to occur."

If Obama is honoring his promise, he is also missing his target. The biggest unmet recovery issue is housing, particularly for low-income residents. It is the most glaring omission in the renewal of New Orleans city life. You can drive by blocks of blight that are either the consequence of the floods -- or were like that before the storm. In the areas where the city's "Big Four" housing projects once stood, you find, at best, partially completed (though posh) mixed-income housing developments or, at worst, gated fields of weeds.

Only 78 percent of the city's pre-Katrina population has returned. The percentage of African Americans has dropped from 66.7 percent to 60 percent. New Orleans can now say it is less poor, but that's because tens of thousands of low-income residents haven't made it back to the city, and may never return. According to a report by the Greater New Orleans Community Data Center and the Brookings Institution, the number of people living below the poverty line in Orleans Parish (which encompasses the city of New Orleans) has dropped by 68,000 people.

More than $40 billion in federal disaster funding has been spent in Louisiana in the last five years. But a lot of that money has not reached residents, families and workers who have the fewest means to recover. Close to 200,000 housing units were destroyed in Louisiana by the 2005 floods, including 80,000 rental units -- many subsidized for low-income workers. In New Orleans, 20 percent of damaged rental units sheltered extremely poor households. "There are many areas of unfinished business, such as meeting the demands for affordable rental housing," the Data Center report says.

By the time Obama took the wheel in 2009, thousands were living in formaldehyde-poisoned trailers or on the streets. The homeless population in New Orleans had nearly doubled. His answer was to supply the region with $50 million in housing vouchers and to expand funding for case-management services to help people find shelter.

This was better than nothing, and helped save thousands about to be evicted from the FEMA trailers. It didn't quite address the fact that thousands of affordable housing units were stalled in production, mainly because of the recession. NIMBYism in various communities was hostile to developers looking to place multifamily rental properties and to people with Section 8 vouchers. All said, Obama's vouchers weren't so valuable when there were few places to use them.

The administration next waived HUD restrictions that prevented homeowners from obtaining further financial assistance under the Road Home program if they'd already received a federal housing grant. This helped homeowners already on their way to recovery but did little for renters or those in public housing who hadn't gotten off the ground. Stacy E. Seicshnaydre, a law professor at Tulane University in New Orleans, testified at a recent hearing that federal "resources have followed a path of least resistance, and go to communities that already have some level of affordability, and some level of integration."

The best thing Obama could have done was to reverse a ruling by Treasury Secretary Timothy Geithner, who excluded the stricken area's low-income housing tax credits from the stimulus act's exchange program, which allows states to cash in those credits with the federal government. The recession reduced the value of low-income housing tax credits everywhere, making it hard for developers holding these federal benefits to sell them to investors. The stimulus act's exchange program was supposed to cure that problem, but Geithner strangely excluded disaster-impacted states from participating.