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LOWER NINTH WARD: Does Anybody At CBS News Understand Economics?

LOWER NINTH WARD: Does Anybody At CBS News Understand Economics?
February 05
10:18 2013

Monday morning CBS News, in its post-Super Bowl glow, decided to honor itself as having a social conscience by sending its NFL sportscaster James Brown to talk to a few notables to discuss the plight of the Lower Ninth Ward and how slowly it has recovered from Hurricane Katrina…

To which we can respond: seriously? Does nobody at CBS News have the ability to figure this out?

Let’s understand a few things about the Lower Ninth Ward, which is a cause celebre on the Left because it has always been nearly universally black (95.5 percent black in the 2010 census, 98.3 percent black in 2000), and because of that number it’s that neighborhood which is used as a barometer of whether New Orleans has recovered from Katrina or not.

In the 2000 census, there were 4,820 occupied housing units in that neighborhood, which was 86 percent of the available units there. Some 800 housing units were vacant BEFORE Katrina. As of the 2010 census, the number of occupied units was 1,061 – 52 percent of the 2,039 total units. The rest got washed away in the storm and haven’t been rebuilt.

So the area has been depopulated. But let’s understand exactly what hasn’t come back. Because as our readers know, the Lower 9th Ward is one of the lowest-lying areas in the city, and it’s one of the most flood-prone. That would make it a prime candidate not to be rebuilt as it was.

And what’s more, the Lower 9th Ward has always been one of the worst slums in the city.

Some other numbers from the 2000 census…

  • Average household income was $35,984 in the Lower 9th Ward, compared to $56,497 in Orleans Parish as a whole (that figure is in 2010 dollars).
  • 41 percent of the housing units were rentals.
  • 50 percent of the population had an income under $20,000 per year, and 36.4 percent were living under the poverty line.
  • 40.1 percent of the population didn’t have a high school diploma.

In other words, this was a neighborhood all but dead prior to the storm. Lack of education, crappy jobs, lots and lots of renters, dirt cheap property, a sizable amount of vacant property and blight – BEFORE Katrina.

So the storm comes and wipes out the vast majority of the property.

How much of it would you expect to come back? If you own rental property there and you’re getting peanuts for rent, and you own that property free and clear (55.5 percent of the property there is owned without a mortgage), and then the property gets wiped out in a storm, how fired up will you be to rebuild so you can go back to getting next to nothing for rent again?

Not that fired up, actually. There’s such a thing as “return on investment.” And if you’re going to be a slumlord, your business model entails spending as little money up front as possible on the property so that the pittance you get for your units is as close to 100 percent profit as possible. More outlay means less profit, because you’re not going to be able to charge your broke tenants more rent.

That’s why most slums are in a state of decline.

How does the Lower 9th Ward decline after Katrina? It can’t. Ruins can’t decline; that’s why they’re ruins.

And the “community activists” Brown went to interview about why that neighborhood didn’t come back after the storm fought all the efforts to redevelop it into something more geographically appropriate – like, for example, warehouses and port facilities and industrial parks. Because if it floods it’s a lot easier to clean up a warehouse on a four-foot concrete slab than five thousand shotgun houses where broke people have all their possessions. Those “community activists” insisted on bringing back the Lower 9th Ward exactly the same as it was before the hurricane – in other words, they wanted public resources devoted to rebuilding a slum.

Amazingly, that didn’t work so well.

So the population is down 80 percent of what it was in 2000. It was 14,008, and 10 years later it was 2,842.

But demographically, those community activists succeeded.

  • The neighborhood was 98.3 percent black in 2000, and it was 95.5 percent black in 2010.
  • Owner-occupied housing units were 59 percent in 2000, and they were 66 percent in 2010.
  • Average household income went from $35,984 to $36,534.
  • Those living with under $20,000 in income per year went from 50 percent to 46.9 percent.
  • Poverty rates went from 36.4 to 29.1 percent.
  • Those without a high school degree went from 40.1 percent to 27.3 percent, which is a fairly significant, positive and notable change.
  • There were 4,663 workers out of 14,008 people in the neighborhood in 2000 (33.3 percent), and in 2010 there were 1,116 out of 2,842 (39.3 percent).
  • Of those workers, 89.7 percent took home less than $3,333 per month in 2000, and 78 percent took home less than $3,333 per month in 2010.

There are some positive trends in those numbers and the neighborhood’s demographics are a little better now than they were then, but it’s still a poor area. Those people are still largely broke. There are less of them and they’re a little less broke than they used to be, but fundamentally the Lower 9th Ward is what the social justice crowd demanded that it be after the storm.

But somehow, those people getting what they wanted is a sign that the city’s leaders don’t care about the Lower 9th Ward – and for the city to spend its resources bringing back the parts of town that are actually productive in the generation of wealth as a priority…well, CBS can look down its nose at such injustice from its perch in New York, right?

The Lower 9th Ward is no different from lots of neighborhoods in places like Detroit or East St. Louis where there was no hurricane. Nobody from CBS Sports cares about those neighborhoods.

We started this off asking whether anybody at CBS knows about economics. Perhaps the real question is whether anybody cares. It doesn’t make a good story to explain why one of the worst slums in New Orleans was cleared out by Katrina and not brought back as quickly as other parts of the city; instead it’s better to whine about the injustice of poor people not having a place to live in their old crappy neighborhood. The viewers don’t learn anything, but hey – it’s only news, right?

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  1. Tim Ledet Sr.
    Tim Ledet Sr. February 06, 02:11

    Who in the world thinks that Orleans and surrounding parishes are limited to one sever storm ever? Why would anyone think that rebuilding in the lower ninth ward would be good for anything? Katrina was not the highest catagory storm nor did it hit the coast at its most deadly and destructive location for that particular part of the state. It makes no sense to me.

  2. Lynda Moreau
    Lynda Moreau February 06, 03:58

    I talk to tourists all the time who are AMAZED to find out that any white, middle class people lost their homes in Katrina.

  3. Anonymous
    Anonymous February 06, 19:52

    seriously does anybody here understand history? Lynda the tourists who speak with you are probably amazed because the white, middle class folks received the necessary money from the Road Home Program to rebuild while the black/poor folks did not. so this article passes for serious commentary. it didn't come back because the city abandoned it. which is easy to do because we have abandoned black communities for decades. call it a slum, but good, hard working people still live there. there are economic forces beyond their control, but that doesn't mean they should only receive a few thousand to rebuild their home. but the author is right. this is the future. poorer areas damaged in storms will not receive any aid because they are written off as sunk costs. at best they will be used to generate sympathy for victims elsewhere. but the wealthy will receive aid and we will naturalize the process as the hack who wrote the above piece did.

    • Jules P. Guidry
      Jules P. Guidry February 07, 14:25

      Read the article again. Pay attention to the "owner-occupied" housing of the area. That figure is up. So, it doesn't add up to your critique of the article and its facts. Take the ideology outta your head and look at the facts, as difficult as it may be the figures don't lie. The rest of the property is owned by former slum landlords who now will rebuild the area with warehouses, etc. for the reasons given in the article. It's economics, not class warfare. The left just doesn't get the economics part. Failed math in school or something.

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