The birthplace of jazz ain’t swingin’ again just yet. Four years after Hurricane Katrina and the nation’s most catastrophic engineering failure ravaged it, New Orleans is slowly battling back. Much of the rebuilding is funded by federal dollars. The Federal Emergency Management Agency funneled billions for debris removal and general infrastructure repairs, plus $8.4 billion for levee repairs. And billions in disaster community development block grants have helped homeowners rebuild or repair their homes.
Commercial development has been fueled by special federal Gulf Opportunity (GO-) Zone tax credits, some of which apply to low-income housing, and some to “other projects, many of which have had a hard time getting started,” says Allison Plyler, deputy director of the Greater New Orleans Community Data Center. The hiccups come mainly from zoning issues and ongoing challenges related to blighted properties, as well as a whole lot of wrangling between redevelopment authorities, city hall, and state government.
“Many have criticized the pace of recovery. … [T]here have been challenges,” says Matthew Schwartz, principal of Domain Cos., one of the first developers to make use of GO-Zone financing. It now has $113 million in mixed-income and mixed-use projects under way. “Most critics discounted the planning that needed to be accomplished before improvements could be made.” But Schwartz says the Big Easy is on the right track with slow, sustainable growth: “It’s progressing in a way that will make New Orleans a better city.”
POPULATION/EMPLOYMENT
273,600 residents, 60% of the pre-Katrina population. April 2009 unemployment: 5.3%.
OFFICE MARKET
Class A office vacancy: 8.78%; average asking rate: $17.99/s.f.
RESIDENTIAL MARKET
Median home sale price, 1Q 2009: $320,900.
MARKET STRENGTHS
- Vibrant culture, rich history
- Fifth largest U.S. port
- Widespread support of green building practices
MARKET CONCERNS
- Poor housing affordability
- Infrastructure challenges
- Poorly performing schools
FORECAST
Equity Office leasing director Bruce Sossaman hopes the city keeps growing. “One of the big challenges … is attracting new business [and] young professionals to move here,” he says. “This will take a combined effort … to improve the infrastructure in the area.”
