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Friday, September 16, 2005

Why Return To New Orleans?

Robert Musil opines that many of the poor evacuees from New Orleans will not return. They plan on staying in Houston. I agree. Why would anyone poor return to the hopeless life they led in New orleans when there is opportunity in Texas?

Musil also compares Katrina with the Northridge earthquake in Los Angeles- Santa Monica of 1994. Many Santa Monica residents never returned as the landlords never rebuit or up-graded to code because of rent control there. He writes:

In areas experiencing similar force and shock from the quake and having similar geological characteristics, apartment houses in Los Angeles in general fared far better than structures of similar age and style in Santa Monica. The difference was mostly to be found in the fact that Los Angeles landlords had upgraded their structures far more extensively and thoroughly than their Santa Monica counterparts - mostly as a result of differences in the rent control laws between the two cities...

Santa Monica did not sufficiently permit landlords to effectively "pass along" earthquake retrofitting costs to renters. But, probably more importantly, many Santa Monica landlords didn't want to preserve their structures. Landlords reasoned that given the Santa Monica laws, total destruction of one's apartment house in an earthquake was not necessarily a bad thing.

There has to be low-income housing to return to. Given the expected welfare, statist local and state governemnt in New Orleans and Louisiana, the attraction of entrepreneurship is absent. And with it, people motivated to move in.

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