Katrina Three Years On & Bushliburton Serves Up More Double Talk

During a flight on board Air Force One on August 20th, Paul Conway, chief of staff to Homeland Security’s Gulf Coast Coordinator was briefing reporters prior to a speaking appearance of George W. Bush, the putative failed leader of Katrina disaster recovery efforts, in which Bush would discuss hurricane recovery efforts. Not surprisingly, even three years on from the time when Katrina hit, administration officials are still incapable of getting their arms around the challenges facing residents of the gulf coast, as noted in this transcript from the briefing aboard Air Force One:

Reporter: What year do you think that the reconstruction is basically going to be finished?

Conway: Well, the target date for the reconstruction is 2011.

Reporter: For everything? I’m talking the Gulf Coast.

Conway: Well, actually, let me — I’m talking about levees, so let me be perfectly clear. The levee protection system for Greater New Orleans, that target date is 2011. If you’re asking overall –

Reporter: I’m asking overall.

Conway: Ma’am, to be quite honest with you, it’s hard for me to estimate that as a federal official, because so much of this depends on how local government and state government and the feds work.

Reporter: So what percentage of the Gulf Coast has been rebuilt in the past three years?

Conway: Well, you would literally have to look at sectors, okay. For example, on education, if you look in the city of New Orleans, education is going along quite well.

Reporter: Do you have overall numbers for the whole Gulf Coast?

Conway: Well, you would have to look at it by sector, ma’am. If you’re talking schools, libraries, that type of thing?

Reporter: What about housing?

Conway: Housing? I can go ahead and start in on that. On the housing issue, everybody knows that there were several different delays on the Road Home program in the state of Louisiana. Now, you have — $7 billion has been transferred in the hands of homeowners; 115,000 — $7 billion — 115,000 homeowners now have received the benefits of the Road Home program. In addition to that, the state is using $1.4 billion in CDBG funds for rental houses.

Reporter: Right, but people don’t understand all this stuff. They want to know what percentage of what was taken away by Katrina has actually been rebuilt in the past three years?

Conway: I would say there are significant portions, but literally, literally, it’s not honest to say — you know, pull out a figure out of the sky and say, X amount is done. You literally have to look by sector.

Reporter: We’re talking about a sector. Let’s talk about housing.

Conway: Okay, in the housing area, you have just about 85% of the pre-Katrina population estimate coming back into the city. And in terms of the actual housing itself, there’s a lot of work that needs to be done still, remaining.

Reporter: There’s no way to quantify it?

Conway: It’s difficult to quantify. You have to go neighborhood by neighborhood and take a look at it, okay.

So it seems there has been big talk, and talk of large sums of government funds being disbursed, but Bushliburton officials really cannot quantify how much real help has reached all of the people displaced by Katrina. What this writer would like to see quantified is two numbers: how many total people were displaced due to Katrina, and how much housing has actually been rebuilt in hurricane effected neighborhoods in the past three years in response?

Are government and business interests trying to “wipe out poverty” in the New Orleans area by simply not allowing the poor and disenfranchised to put a roof over their heads, hoping they will just go away, or for those who had been displaced out of state just not come back? Local activists seem to think so, and have been jailed by their actions as reported at AlterNet.org.

Meanwhile, as we reported at about this time last year in the BFD Blog!, those who were not necessarily displaced, and who live at decidedly higher up on the totem pole, have been able to further enrich their lifestyles with the help of government funds intended for disaster relief:

The Lower Ninth Ward, et al Stand Neglected, While Disaster Relief Funds Subsidize Luxury Condos For Alabama Football Fans

As reported by Jay Reeves of the AP and published by the Huffington Post today, real estate “investors”, we prefer to refer to these people as “grave robbers”, are taking advantage of the federal Gulf Opportunity Zone Act of 2005, commonly referred to as “GO Zone”, the intent of which, was to simulate rebuilding in the hurricane impacted communities in the Gulf states. The act provides economic incentives to investors:

The GO Zone contains a variety of tax breaks designed to stimulate construction in Mississippi, Louisiana and Alabama. It offers tax-free bonds to developers to finance big commercial projects like shopping centers or hotels. It also allows real estate investors who buy condos or other properties in the GO Zone to take accelerated depreciation on their purchases when they file their taxes…

“It is a joke,” said Tuscaloosa developer Stan Pate, who has nevertheless used GO Zone tax breaks on projects that include a new hotel and a restaurant. “It was supposed to be about getting people … to put housing in New Orleans, Louisiana, or Biloxi, Mississippi. It was not about condos in Tuscaloosa.”

Dave Toombs, a real estate investor from Irvine, Calif., with no connection to Alabama, bought two new, upscale townhouses at The Traditions, just minutes from campus, as investment properties. He said he hopes to use GO Zone tax benefits when he files his taxes.

“If we qualify for the GO Zone it will be icing on the cake,” said Toombs, who is consulting with an accountant because the rules are complicated. “It’s another plus check to put in the column.”

An investor could write off more than $155,000 of the cost of a $300,000 condo in the first year and use the savings to lower his taxes on other rental income, according to Kelly Hayes, a tax attorney who advises investors in Southfield, Mich. Without the GO Zone tax break, the depreciation benefit from a single year on such a property would typically be just $10,909.

(The tax break is not available to people who buy a home for their own use.)

So if we understand all of this correctly, if we were a resident of California and were to invest in real estate in Tuscaloosa, Alabama, which is roughly 225 miles inland from the Gulf Coast, the federal government (i.e. the U.S. taxpayers) will subsidize our investment, and if we are leveraged properly, it might result in our not having any federal income tax liability. We would also get a luxury condo out of it that we could use for ourselves, rent out, or sell at a later profit.

But if we were a resident of New Orleans, we would still be standing out in front of our former residence, waiting for some relief, any relief, from our government:

George W. Bush, speaking from the White House Rose Garden, August 31, 2005:

Our third priority is executing a comprehensive recovery effort. We’re focusing on restoring power and lines of communication that have been knocked out during the storm. We’ll be repairing major roads and bridges and other essential means of transportation as quickly as possible…

We’re also developing a comprehensive plan to immediately help displaced citizens. This will include housing and education and health care and other essential needs. I’ve directed the folks in my Cabinet to work with local folks, local officials, to develop a comprehensive strategy to rebuild the communities affected. And there’s going to be a lot of rebuilding done. I can’t tell you how devastating the sights were…

The folks on the Gulf Coast are going to need the help of this country for a long time. This is going to be a difficult road. The challenges that we face on the ground are unprecedented. But there’s no doubt in my mind we’re going to succeed. Right now the days seem awfully dark for those affected — I understand that. But I’m confident that, with time, you can get your life back in order, new communities will flourish, the great city of New Orleans will be back on its feet, and America will be a stronger place for it.

The country stands with you. We’ll do all in our power to help you.

How much longer will your constituents in the Gulf states who have lost their homes and still have not received any relief have to wait Mr. President?

Updated August 30, 2007:

For more about the Katrina aftermath, check out Katrina Rembered and we came, we saw, we cried, we left.

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