20080822 nola house 18
A New Orleans house that is still boarded up, because of damage from Hurricane Katrina. - 

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Kai Ryssdal: Three years ago tomorrow, Tropical Depression 12 formed just southeast of the Bahamas. By the time what eventually became Hurricane Katrina dissolved over Canada eight days later, the storm had become the worst natural disaster in American history. Huge parts of the Gulf Coast were inundated. Levee failures New Orleans left most of that city underwater. We sent Marketplace's Tess Vigeland down to the Big Easy to find out how the recovery effort is progressing three years on. And she is back with us. Hiya, Tess.

Tess Vigeland: Hi, Kai.

Ryssdal: So tell us about this trip you took. Is this city back to what it used to be?

Vigeland: It's kind of hard for me to make that judgment. This was actually my first time ever in New Orleans. I'm sad to say, I didn't see it pre-Katrina. But, Kai, you know, it's hard for me to describe what it was like driving around all those neighborhoods we heard so much about after the storm, Gentilly, Midcity, the Lower Ninth Ward. I wanted to come back with all these great stories of recovery and renewal, because, you know, those are the stories that are going to keep bringing people back to New Orleans. But honestly, I returned wondering whether some of these neighborhoods are ever going to truly revive. The tourist zones -- French Quarter, downtown, the Casino -- they're all well up and running. But out in the flood zone, you know, there's progress, but not nearly as much as I expected to see.

Ryssdal: Well, what's going on? What's preventing anything from happening?

Vigeland: How much time do we have? These issues are unbelievably complex. I think first and foremost, people are still struggling with the decision to return to and rebuild their homes in a flood zone. In fact, this week, the Greater New Orleans Community Data Center issued some figures showing that 34 percent of the city's residential addresses are still empty lots. Maybe there's a slab foundation there, but that's it. Sixty-five thousand pieces of empty property. And you can see that as you drive around. There are all these boarded-up houses, these empty foundations.

And, you know, a couple of weeks ago, you may have heard this other number that got quite a bit of play in the media -- 70 percent of New Orleanians had returned. Sounds great. Well if you look deeper into that study, yes, they returned -- to higher ground, not the flood zones. Places that had gas stations, grocery stores, post offices. And it's stunning to see how many neighborhoods three years later don't have those things.

Ryssdal: Well, let's follow the money trail here for a second, Tess. I mean the government's given billions of dollars in reconstruction aid. Why isn't it getting where it needs to be?

Vigeland: Yeah, $13 billion, in fact. And this is what gets people really angry about what's going on or not going on right now. You know, the Louisana Road Home Program, this is the state agency that is funneling all these federal dollars to people , they've given out 116,000 grants worth an average of $58,000. Add that all up -- $6 billion out of 13. So there are thousands upon thousands of people who are still waiting to get money to help them rebuild. And even with the money, there's a study out this week, that says 83 percent of those recipients still didn't get enough to be able to finish completing their construction.

Ryssdal: You've talked to the Road Home folks. What did they say.

Vigeland: Well, first of all there is a new administration in place. Gov. Bobby Jindal, he appointed a new administrator for the Road Home Program, who says, "Look, I wasn't here when they created it. We're trying our best to fix it." Second, they are so afraid of Congress breathing down their neck and watching out for fraud in this program, that that is really keeping them from handing out money as quickly as they say they would like to. You know, they check and double check and triple check and quadruple check. Meantime, people are waiting and not rebuilding, because they don't have the money to do it. And that's why these neighborhoods, so many of them, are empty.

Ryssdal: Tess Vigeland hosts our personal finance program, Marketplace Money. This weekend's show, most of it anyway, is devoted to Tess' trip to New Orleans. We've got a slideshow of her trip on our Web site. It's marketplace.org. Tess, thanks a lot.

Vigeland: Thank you, Kai.