A Time for Decision in the Gulf Coast Disaster Zone by Larry Haines

August 16, 2006

It is almost a year since Hurricane Katrina ripped through the Gulf States of Louisiana, Mississippi and Alabama.  The time has come for people to make a decision regarding their flooded houses according to politicians and many redevelopment advocates. They are challenged by people that say that 12 months isn’t enough time to make a decision about what they should do with their property; especially, since many were not allowed into their property for weeks after the water levels went down. My personal opinion is that this situation will get worse before it gets better. The problem isn’t about one person or another or even one neighborhood or another. The problem is widespread destruction that has left entire areas in economic shambles. That being said, decisions to rebuild are made one house at a time.  The Mayor of New Orleans has declared August 29^th the deadline to do something to start the rebuilding process on your home or face it being torn down by the City of New Orleans. 

While individuals want their property rights, the mayor wants to rebuild the city and is finding it hard to convince people to come back without forward movement on housing, health care, and transportation.  Recent drug wars have sent the murder rate up yet again. Whether you like Mayor Nagin or not, anyone can see that this is a thankless job.  In fact, it would be interesting to note how many thank you letters the mayor actually gets! A leader must do what is right for the community, while respecting the rights of the citizens. In this instance, I support the mayor in getting people to do something and here are my primary reasons.

1. Investors want to invest in the area and are trying to find deals that make sense economically for the risk taken. One big risk is that you buy a property and rebuild it for rent or resale, only to have a neighbor take no action and not clean up his yard or half of his house is collapsing. In many instances, people have not even gutted their homes and with no sign or activity or no deadlines, you wonder just how long they would let the blighted house stand.
2. Homeowners have made some temporary repairs against the elements. Those repairs are nearly one year old and they are deteriorating. For example, I was out at a house I bought to rehab in Lakeview recently and the blue tarp (someone should trademark that name!) was sun beaten and was starting to shred. The wind came up from a thunderstorm and ripped the tarp in half. As the rain came down, it went right through the damaged roof and caused several thousands of dollars in damage to the wood floors and sheet rock in the second story that had been protected for 10 months. The point is that these repairs are temporary and to preserve the house, long lasting repairs need to be made.
3. The city needs revenue to survive and be vibrant. Flooded houses in dilapidated condition do not ad to the value of the community in any way. City services cannot be provided to areas with only a few homeowners are sporadically rebuilding.

 For the greater good, rebuilding is necessary. It can’t take place if people refuse to remove their house, fix their house, or sell their house to someone else that will fix it. Remember the old saying? – “Lead, Follow or get the heck out of the Way”. One year should be enough to do one of the above.

Larry Haines is President of BPI Management, Inc., the General Partner of a limited partnership developing SellYourFloodHouse.com and MyPropertyLeads.com to match sellers of flood and storm damaged property with investors from across the U.S.