The Lost City of New Orleans?

Risk & Insurance, Dec, 2000 by Lori Widmer

Shoring up homes has become a thriving business in the city, according to Schwaner. As homes list and sink, companies jack up the homes or provide fill to even the ground. All of the efforts seem like a bandage approach, thinks Penland. "It would cost a billion or two dollars to make the levee 30 feet high. A major flood with loss of life could cost $10 billion. What's wrong with this picture? If we know the worst-case scenario is billions and it would take a billion or two to prevent it, why don't we do it? I don't think anyone's thinking about it."

If it were left to residents and city officials, the status quo would prevail. One city official says of the flooding and subsidence, "We are below sea level and we do get floods sometimes, but it's not a real serious problem. You can still purchase flood insurance." Another city official expressed faith in the current levee system.

Penland's frustration with this attitude is apparent. "These are things I've been preaching for a number of years. This town has never planned ahead. They've always reacted and not pro-acted."

The insurers of the area are backing up Penland and the U.S. Geological Survey's thinking. State Farm, for example, will no longer expand its homeowners' policy market, but opts to replace old business instead.

In fact, New Orleans is sitting in the worst possible location, insurance-wise. The city is considered high-risk by FEMA insurance standards, according to Mark Stevens, director of the National Flood Insurance program. The risk criteria considered when measuring flood insurance premiums are elevation, proximity to water, terrain, etc.

Jim Addison, chief public affairs officer for the Army Corps of Engineers in New Orleans, echoes Penland's frustration. "The government's not doing anything. No one's stood up and said, 'we have to do something to protect the city from this eventuality.' I don't know if the rate is so slow and the cost is so high. We're already spending millions of dollars a year on hurricane protection. The fact that the city is sinking is just one extra thing to worry about." The current price tag for the Lake Ponchartrain hurricane system is $700 million, still under construction, says Addison.

Still, attempts are being made to stem the tide of nature. "The Corps is involved in a flood control program called South East Louisiana Urban Flood Control Program (SELA)," says Addison. "It has us enlarging existing drainage canals. Where they were earthen canals before, we're lining them with concrete to improve drainage capacity. We're increasing the pumping capacity at various pump stations." The efforts are not cheap. "That's a $500 million program." Given that the area receives $400 million a year in government aid, that leaves a hefty bill for the region on a project that is too small to make any major contribution.

Another program, called Coast 2050, involves five federal agencies in an effort to save Louisiana's coast. Some of the critical solutions proposed in the plan include maintaining shorelines, maintaining river flows and mudstream flow, improving drainage, lowering water levels by modifying flows to tidal marshes, creating marshes through dredging activities, and maintaining the three natural land bridges in the region.