Will My Neighbors Rebuild? Rebuilding Outcomes and Remaining Damage Following Hurricanes Katrina and Rita

AbstractThis article describes the rebuilding outcomes of hurricane-damaged properties in Louisiana and Mississippi using direct measures of remaining damage collected using onsite observation of properties' exterior conditions. The empirical analysis presents representative estimates of the rebuilding outcomes of owner-occupied properties and renter-occupied properties in early 2010, which is between 4 and 5 years after the 2005 hurricanes. The article then examines the extent to which damaged structures were clustered in concentrated pockets of remaining damage.IntroductionHurricanes Katrina and Rita created unprecedented damage to the housing stock in communities along the Gulf Coast. In Louisiana and Mississippi, in particular, the scale of the damage led policymakers to reconsider their approach to rebuilding assistance for residential housing recovery. This article provides representative estimates of the rebuilding outcomes of owner-occupied properties and renter-occupied properties in early 2010-between 4 and 5 years after the 2005 hurricanes. It then examines the extent to which properties with remaining damage were clustered in concentrated pockets or distributed among properties where other property owners had invested in rebuilding.This information provides valuable insight into the rebuilding patterns of owner-occupied and renter-occupied properties following a natural disaster. Although the immediate goal of hurricane-recovery efforts should be to rebuild an adequate supply of habitable housing units, the design of housing recovery programs must also consider the longer term rebuilding outcomes of damaged properties and neighborhoods. In particular, properties that contain visible repair needs for sustained periods of time may reduce the properly values and rebuilding outcomes of surrounding properties. Such externality effects represent social costs that are frequently used to justify the allocation of public funds to the rehabilitation or demolition of blighted structures. Documenting the extent and concentration of sustained damage therefore helps to inform the tradeoffs policymakers face when allocating limited funds between rebuilding assistance and blight remediation programs and when determining whether to incentivize property owners to rebuild in place or relocate to other areas.An emerging literature reviews the process that the city of New Orleans used to develop a revised city plan (Nelson, Ehrenfeucht, and Laska, 2007; Olshansky, 2006; Olshansky et ah, 2008). These discussions involved difficult decisions about how to define the future footprint of the city, thus charting the course for public investments in infrastructure, schools, and neighborhood-level rebuilding efforts. Lowe (2012) presented a similar discussion of the policy development and planning process in Mississippi, describing the political influences that shaped the design of housing recovery programs. Subsequent studies have also conducted detailed assessments of the Road Home program administered by the State of Louisiana, examining its calculation rules (Green and Olshansky, 2012; Spader and Turnham, 2014), implementation experience (GAO, 2010), distributional consequences (Gotham, 2014), and impact on households' locational and resettlement decisions (Gregory, 2012). Less evidence exists, however, regarding property owners' rebuilding activities and the longer term reconstruction of hurricane-damaged properties.This article contributes to this literature by examining the patterns of rebuilding activity and sustained damage that were present following Hurricanes Katrina and Rita. First, it provides representative estimates of rebuilding outcomes for hurricane-damaged properties on significantly affected blocks and documents the presence of sustained damage. The results show that a substantial percentage of hurricane-damaged properties continued to show visible repair needs more than 4 years after the storms. …