Katrina: Help People, Not Places

Aid should assist the displaced in relocating where they wish

Whenever natural disasters like hurricanes, tornadoes, earthquakes, or floods strike America's shores, the engine of government normally chugs into motion with one goal in mind: rebuilding. And already politicians, economists, and urban planners are hard at work debating the face and shape of the

"new" New Orleans that officials vow will rise from Hurricane Katrina's wreckage. But just as Katrina wasn't your typical disaster -- more than 330,000 families have been displaced, and the costs from damage and rebuilding could exceed $100 billion -- neither should planning for its recovery be in the usual mold.

Indeed, rather than merely reconstructing the physical property that defined the Gulf Coast before the storm, government must also funnel long-term aid to the new locales where Katrina refugees may choose to stake their futures. That means directing dollars far from the storm center in coastal Louisiana, Mississippi, and Alabama, or even refugee havens like Texas. The real mission, as Harvard University economist Edward L. Glaeser puts it: Help people, not places.

That's tricky, given the natural inclination to concentrate reconstruction efforts on the New Orleans area after the initial inadequate response to survivors trapped there. But that would be a mistake. No one knows exactly what a revived New Orleans will look like, but it's almost certain the city will be a smaller, more focused metropolis with fewer residents in the poorer, low-lying parishes that suffered some of the worst flooding. So there may not be room for everyone to come back anytime soon, even if they want to.

Besides, the unusually high concentration of the poor in New Orleans -- almost a quarter of its residents had family incomes below federal poverty guidelines -- means that simply rebuilding their former homes would still leave a huge local underclass. If better job prospects, living conditions, and local schools are available in the new communities where displaced residents have landed, then federal housing assistance and emergency aid to local school districts should be used to help the displaced permanently relocate where they wish.

Wisely, the federal government has already designated 38 states as Katrina-related emergency sites -- including faraway states such as Montana and Massachusetts -- making them eligible for financial assistance to provide emergency services to temporary refugees who may actually become permanent residents. And with the Federal Emergency Management Agency acknowledging that displaced families are currently residing in all 50 of the nation's states, it will probably need to cast its aid net even wider.

None of this downplays the need to rebuild the Gulf Coast region. But many displaced residents are likely not to return. Indeed, the U.S. has often experienced population shifts in times of stress or social change. Whether during the Dust Bowl exodus from the Great Plains during the 1930s, the massive post-World War II population shift to California, or the Great Migration of millions of Southern blacks to the North and West between 1920 and 1970, Americans have always moved in search of a better life. Government should give those displaced by Katrina that same opportunity.

    Before it's here, it's on the Bloomberg Terminal.