On November 23rd, New Orleans City Business featured an editorial on the recovery efforts in New Orleans, specifically discussing the Louisiana Recovery Corp. proposal.

By CityBusiness EDITORIAL

2005-11-23 2:21 PM CST

NEW ORLEANS — Hundreds of thousands of homeowners have questions regarding whether to rebuild in devastated areas. Rep. Richard Baker, R-Baton Rouge, has the right answers.

The rebuilding question is complicated by so many factors. Will the levees be rebuilt? Will jobs be available? Will insurance money cover the costs? Realtors and assessors are unable to even agree on property values.

Prudent people are unlikely to invest their life savings in rebuilding homes in areas where so many key variables are unknown. The longer these questions go unanswered, the greater the drag on the hurricane recovery.

Baker would answer redevelopment questions by empowering the homeowner as much as possible. Not every family will find an answer in his four-tiered approach but most will while working with Baker’s proposed Louisiana Recovery Corp.

Best of all for those worried about squandering taxpayer money, the LRC would be a quasipublic corporation underwritten mostly by loan guarantees rather than federal grants. It should be an easy sell nationally.

The LRC would buy ruined homes and pay off mortgage obligations for willing families. It could then assemble land in parcels large enough to sell to developers to allow mass redevelopment.

But the homeowner would control the process every step of the way — even if they sell to the LRC at first. Those who sell their property would have the option of buying back into redeveloped neighborhoods through the LRC, a process unlikely to happen without great expense on the open market.

This housing crisis demands the rebuild of a quarter-million homes. It’s estimated such a project will take at least 12 years. It will take much longer if the LRC is not allowed to proceed.

Developers and homeowners are not the only beneficiaries. Taxpayers would be off the hook for cleanup and reconstruction costs now being made up by Baker’s LRC proposal in the sale of land or buildings that appreciate through redevelopment.

The private sector is going to be the prime mover in repairing and rebuilding Louisiana but the prospects of a slow recovery is casting a pall over economic development. The LRC would be a government-backed enterprise partnering with the private sector to deal with urban planning, insurance coverage and housing finance. It’s as close to a perfect solution as we’re likely to find.

CityBusiness joins Mayor C. Ray Nagin and Gov. Kathleen Babineaux Blanco in backing Baker’s idea, which helps Louisianans help themselves.

To view the online editorial please click on the following link:

New Orleans City Business Report on Post Hurricane Recovery Initiative