New Orleans Rebuilding Plan Taking Shape

New Orleans, LA, February 21, 2006--Long-awaited plans to rebuild New Orleans and compensate hundreds of thousands of hurricane victims took shape on Monday as Louisiana Gov. Kathleen Blanco announced details of a program that would give homeowners up to $150,000. It is the clearest recovery plan to emerge since Hurricane Katrina struck the Gulf Coast nearly six months ago, and follows a White House request to Congress last week for an additional $4.2 billion in federal funds for Louisiana. "This is one of the most important programs our state will ever run," Blanco said in a statement. "In the not-too-distant future, I predict the sounds of hammers and saws will be ringing through all of our communities as our homes are rebuilt." Some 170,000 homes were destroyed and 1,300 people killed by Hurricane Katrina, which sparked massive flooding in New Orleans. Further damage was caused by Hurricane Rita a month later. Under the new plan, which is in line with a proposal by New Orleans Mayor Ray Nagin, owners of homes that suffered $5,200 or more in uninsured damage could receive up to $150,000 toward the pre-storm value of their homes, less insurance and other federal payments. Uninsured homeowners living in the official flood zone would be covered, but their assistance would be cut by 30 percent. That reflects sympathy with the thousands of uninsured owners who trusted the federally built levees that failed in August, while sending a signal that everyone should get insurance in the future, Blanco said. Owners will be able to use the funds to rebuild, repair, relocate or accept a buyout of their mortgage. Blanco stressed that the plan was dependent on congressional approval of the funds, which are in addition to $6.2 billion already approved, and that she would listen to the views of residents before finalizing the details. "We're just beginning the process. I'm finding it very difficult to put a timeline on it because too much of it is not in our control," she said in an interview on local radio. New Orleans residents, about two-thirds of whom remain displaced by the disaster, have faced months of uncertainty over the city's recovery. A previous plan that would have allowed federal buyouts for homeowners was shot down by the White House, which accused city and state officials of lacking a clear plan. It remains unclear how the new plan will affect the shape and size of one of America's most famous and culturally rich cities. Some residents in badly hit areas are fiercely determined to stay, but there are doubts over how the shrunken city can provide services for sparsely populated neighborhoods. A call center would be set up in March to start the registration process for the program.