HomeArchived NewslettersVolume 3, Number 1 – January 2006

Volume 3, Number 1 – January 2006

  • January 1, 2006
  • Posted by: matt
  • Category: Archived Newsletters
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Recovering from Katrina: Beyond “Never Again”

It’s been about five months since Hurricane Katrina struck the Gulf Coast.  While recovery and rebuilding are just getting under way, it makes sense for us to take hard look at what happened in the region, and what should be happening in the future.  If the scientific predictions are right, we can expect more violent weather incidents in the future.  Moreover, the unstable world situation means that we also need to be prepared for other potential man-made disasters, such as the 9/11 terrorist attacks.  It’s too risky to view Hurricane Katrina as something like the proverbial “100 Year Flood.”  Similar disasters could strike again.  While we can’t always prevent the worst case scenario, we should ensure, at a minimum, that other communities hit by disaster receive better treatment than was accorded to New Orleans and the Gulf Coast.

The main take-away from Hurricane Katrina has to be “never again.”  We should never allow a disaster-affected community to feel neglected by public authorities.  We should never permit a repeat of the stumbling disaster relief effort we saw in the immediate aftermath of Katrina.

Yet, beyond vowing “never again,” what can economic development professionals do to ensure that relief and recovery is made easier in the unfortunate event of future disasters like Katrina?  Lots of public attention will focus on “fixing” FEMA, the Red Cross, and other programs linked to immediate disaster recovery.  But, we must also introduce a longer-term perspective that looks at a one to five year time frame for economic recovery and development.  What happens after FEMA leaves?  How does a community rebuild and prepare itself for “re-entry” into the economy?  This is a job for economic developers.  In this arena, a couple of important “lessons learned” from the Katrina response are instructive.

Housing IS Economic Development:  We often hear economic developers proclaim that attracting and retaining talent is the key to prosperity.  In New Orleans and the entire Gulf Coast, this is also true.  Yet, you can’t attract talent (or workers in general) if they lack a place to live.  And, without employees, business can’t re-build.  And, if business doesn’t rebuild, there is no economic development. You get the picture.  Housing must be economic development job one!

The recovery package passed by Congress in December 2005 is clearly insufficient.   In Louisiana, more than 217,000 homes were destroyed.  In Mississippi, more than 68,000 were lost, and in the Texas regions affected by Hurricane Rita, 4,600 homes were destroyed.   The traditional disaster recovery models won’t work fast enough to restore these homes in a timely manner.  At the current pace, Louisiana officials predict that the rebuilding will take 8-10 years.

A new approach is needed—perhaps along the lines of the Louisiana Recovery Corporation proposed by Rep. Richard Baker (R-LA).  Operating like the Resolution Trust Corporation (used to bail out failing savings and loans, the Corporation would buy out the region’s homeowners and help finance and expedite reconstruction. This step is essential—without adequate housing, no other recovery plan can move ahead.  

Tax Credits are Nice, but Cash is King:  The recently passed Gulf Opportunity Zone Act has been among the most widely applauded recovery initiatives.  This grab bag of tax credits is pretty impressive—nearly every tool in the Federal tax incentive arsenal has been deployed in support of the cause.   These powerful incentives, designed to stimulate housing construction and business development, should go a long way toward aiding recovery after basic infrastructure has been restored.  But, rebuilding takes time.  In the immediate future, cash has to take priority.  A tax credit doesn’t build a building or a house or a FEMA trailer.  Tax credits can’t replace direct investment, but they can supplement it.  

Rebuild, but Rebuild Better:  Here the news is better.  In Katrina’s immediate aftermath, Mississippi Governor Haley Barbour made this eloquent statement:

I am a seventh generation Mississippian. My family has seen us survive disasters before. The worst disaster, man made not natural, was the Civil War. We were devastated, and back then there was no one to help us. It took till after World War II to get back to recover.  After the great flood of 1927, the federal government tried to help us. The Hoover Commission’s work got lost in the Depression, and we stayed on the bottom.  After Camille in 1969, another opportunity was lost. Nothing changed. After two months they were building service stations on the beach. I’m determined we will not miss this fourth chance. We must not fail our citizens.

Barbour’s determination to rebuild and rebuild better has been taken up throughout the region.   Most affected communities are seeking to introduce state-of-art planning and zoning procedures, and, in some cases, they are developing world-class innovative rebuilding strategies.  For example, the Urban Land Institute (www.uli.org) has been instrumental in devising a plan for rebuilding New Orleans.  In Mississippi, the Congress for New Urbanism (www.cnu.org) has organized hundreds of volunteers to run planning charettes in eleven affected towns.  In addition to community rebuilding plans, this work has resulted in publication of A Pattern Book for Gulf Coast Communities, a guide for homebuilders that offers tips on how to build or rebuild in a manner that respects the Gulf Coast’s vernacular architecture.  All of these efforts are positive signs that the region will not only rebuild, but that it will rebuild better. 

Honor Local Prerogatives:  These experiences in Mississippi are a positive sign that local concerns and desires must remain a critical component of decision- making about recovery.  Recent debates about rebuilding New Orleans offer less cause for optimism.  Because so many residents are still residing elsewhere, they cannot readily participate in community decisions about rebuilding.  As housing is restored and environmental damage addressed, more residents can return.  As they return, they must be given regular opportunities to participate in the process, and the means to act upon these desires.  In this area, the decision to authorize an additional $1 billion in New Markets Tax Credits (via the Gulf Opportunity Zone Act) is promising.  These funds can be invested in qualified entities that engage in community development endeavors.  Hopefully, these players will remain responsive to the needs of residents.

Use a Professional:  We’ve all heard the adage:  “If you want something done right, hire a professional.”   This will be true when it comes to rebuilding the economies of the Gulf and for areas affected by future disasters.  Many local economic developers are top notch, but they can’t do it alone.  Fortunately, many national players have geared up to help.  For example, the International Economic Development Council (IEDC) has done yeoman’s work in this area.  IEDC volunteers have chipped in to help with recovery, and the association has also played a major role in pushing Federal agencies to respond more effectively. 

We can’t really quibble with these activities, but wouldn’t it be nice if we were better prepared in the future?  Why not prepare in advance as opposed to reacting after disaster strikes?   Groups such as the IEDC might consider creating something like a disaster-recovery “ready reserve,” i.e., a group of individuals who have agreed to donate their time (say, from a week up to a month) to assist in disaster recovery.  Unlike the Red Cross or Salvation Army, these individuals would focus on long-term recovery, not immediate disaster response.  For economic developers, this might involve assisting with recovery planning, dealing with local regulations, community marketing, or even assisting with the implementation of federal programs (such as FEMA or SBA loan efforts).     

Creating this “ready reserve” need not require a massive bureaucracy.  Individuals could simply volunteer, agree to take a couple of professional development courses, and be ready in the event of an emergency.  We can hope that their services will never be required, but ominous long-range weather forecasts and continued terrorist threats suggest that it’s better to be safe than sorry.  This type of response won’t prevent a disaster.  But, it may ensure that we don’t compound a disaster as we have through our initial bumbling response to Hurricane Katrina.  

Resources: 

The number of websites and information sources on Hurricanes Katrina and Rita is enormous.  Here are a few that may be of particular interest to the economic development community:  

Miscellaneous Plugs: Great Plains Edition

In our travels around the world and around the web, we regularly find some very cool stuff that might interest our readers.  This edition of EntreWorks Insights reports on some interesting activities in the Great Plains states.

Hometown Competitiveness (http://www.htcnebraska.org/):  For many small towns, scaling up resources can be a problem.  They may have innovative ideas for development, but they lack the money to implement them.  How to move ahead? Fortunately, there’s a tried and true method—community foundations that can tap the extensive wealth often found in rural regions.   The Nebraska-based Hometown Competitiveness (HTC) program offers guidelines for communities seeking to stem rural decline.  It’s not just about community foundations.  HTC also helps communities develop strategies for youth engagement, entrepreneurship support and leadership development.

 Johnson County Community College, Overland Park, Kansas (http://www.jccc.net/home/depts/1247):  Johnson County CC’s entrepreneurship programs are among the nation’s best.  At JCCC, they don’t just teach a basic course in entrepreneurship or small business management.  Instead, they try to link such training to other career tracks within the college.  Students who are learning professions such as tax preparation, medical records administration, and interior design, can also learn the basics of starting their own business.  When they complete their degrees, they will be better prepared for life as an entrepreneur. 

North Dakota State University Research Park (www.ndsuresearchpark.com):  If you were asked to list the US’s nanotech hotspots, you probably wouldn’t put Fargo, North Dakota, on the list.  But, that could be shortsighted as North Dakota officials have found a strong niche in the field:  radio frequency identification tags (RFID) and their related technology.  RFID is a hot technology in logistics and retailing circles, and the market is booming.  Fargo, and the North Dakota State University Research Park, has succeeded in attracting Alien Technology to their community.  Alien is locating a manufacturing facility on campus, and plans to train all of its technicians in the region. 

What’s Happening at EntreWorks Consulting?

  • NEW SEMINAR SERIES:  EntreWorks and the Association of Community College Trustees (www.acct.org) are sponsoring a series of seminars that highlight community colleges that are undertaking interesting and innovative efforts to promote local economic development.  The morning seminars will be held on a quarterly basis in Washington, DC.  In December, we hosted the City University of New York’s Institute for Virtual Enterprise (www.ive.cuny.edu), a program that uses business simulation to teach entrepreneurial skills.  If you’re interested in joining us for future events, please send an email to info(at)entreworks.net and we’ll add you to our distribution list.
  • EntreWorks President Erik R. Pages was recently appointed to Arlington County’s Base Realignment and Closure (BRAC) Task Force.  The Task Force is tasked with assisting Arlington County (VA) in designing effective responses to major defense office closings in the county.  The 2005 BRAC Commission recommended that the Pentagon relocate or close offices that now occupy more than four million square feet of office space in the County, potentially affecting up to 17,000 jobs.  To view the press release, visit www.bracarlingtonva.us.