Blue-collar New Orleans endures cost squeeze

updated 10:32 p.m. ET Jan. 25, 2008

NEW ORLEANS - Anisha Washington draws her neatly starched uniform from a dingy bureau in the crowded shotgun house she shares in a hurricane-crippled New Orleans neighborhood.

Her $10-an-hour pay as a security guard in the touristy French Quarter seems an improvement over the $7.50 she earned before Hurricane Katrina struck in 2005.

But, inflated wages in a storm-reduced labor force are overshadowed by the harsh math of life: Rent has shot up 46 percent, utility rates have risen 33 percent and 15 of Washington's relatives cram a four-bedroom house because apartments are scarce.

"They said to all the New Orleans people, the city (is) asking you to come back," said Washington, 39, who returned to New Orleans in June 2007 from storm exile in Augusta, Georgia. "Come back to what? There's really nothing to come back to ... but a place I can't afford anymore. If things don't get better, I'll have to leave."

Thousands of blue-collar workers like Washington who never lived in publicly subsidized housing increasingly have no place to live in New Orleans. The planned demolition of 4,500 publicly subsidized apartments is less significant to the future, policy experts say, than Katrina's destruction of nearly 41,000 inexpensive rentals that once housed the city's self-sufficient working class.

With no concrete plan to replace those apartments, some say, the city's economic base erodes with every blue-collar worker pushed out by higher living costs.

"The New Orleans economy is not diverse enough at this stage in its history to be able to sustain the loss of a whole tier of workers," said Ivan Miestchovich Jr., a University of New Orleans economist. "Can it do long-term damage? You bet."

Blue-collar crisis
Many local officials bank on rebuilding the city's health and biotech sectors, which were emerging before Katrina flooded 80 percent of New Orleans. In their scenario, "those moving in will have higher average incomes than those moving out," Miestchovich said.

Robert Tannen, a New Orleans urban planner, fears the housing crisis for blue-collar workers is undermining eclectic qualities that attract the upwardly mobile.

"There is a naivete that we don't need those folks. But we depend on the hotel workers, the kitchen employees, the musicians," Tannen said. "If post-Katrina New Orleans is more like Everyplace USA there is less reason to be here. The draw here is culture, and intellect, and art, and much of that will be lost if we don't have affordable housing."

The most current figures from the Louisiana Department of Labor show the city's blue-collar ranks have been hard hit. Job vacancy rates in the cleaning and maintenance sector are up from 4.1 percent before Katrina to 13.1 percent now; in the restaurant sector from 3.6 percent to 13.4 percent, and in other service jobs from 6.3 percent to 16.7 percent.

Government programs have been slow to put up bricks-and-mortar relief. Moreover, their strategy relies upon blue-collar workers accepting public assistance. Many don't want it.

"I don't like my family taking handouts," said Troy Powell, 43, a musician whose struggling family so far has declined federal rent aid.

Federal subsidies may be only solution
Amid predictions affordable housing could be indefinitely out of reach for blue collar workers, state and federal agencies offered landlords a subsidy to accept lower-income tenants. The effort is falling short because landlords can get high rent in the post-Katrina free market without dealing with bureaucratic red tape. To date, there are only 550 of these subsidized apartments.

Long term, the Bush administration has offered tax breaks to developers to build mixed-income housing. Two and a half years after the storm, little such construction is evident.

According to the Oakland, California, think tank PolicyLink, hurricanes Katrina and Rita destroyed 41,000 apartments affordable to people earning less than the area's median income. PolicyLink, which used federal rent-to-wage scales to determine affordability, says only 43 percent will be rebuilt under federal programs.

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