Short Term
Long Term
Setting a Precedent


Cost Benefit Analysis
Written by Sara Barnowski

The plan that we are proposing for the rebuilding of the city of New Orleans (Plan 2 on the Cost Calculation page) is a compromise between returning the city to pre-Katrina levels and demolishing the city in order to let nature run her course.  We intend to downsize the city so that the neighborhoods of Lakeview, West End, Read Boulevard East, and Village DeL’Est are depopulated and turned to open space.  We believe that it is important to maintain historical districts, restore wetlands, divert the Mississippi River, reimburse displaced people, conduct research in order to keep all plans and procedures up to date, and implement many other projects.  We are estimating that the short-term (0-50 years) costs for these developments will be around $22.7 billion.  This figure will be augmented by a $1 million bill for each home that the government subsidizes and brings up to the new specifications.  These costs are based both on similar projects that have taken place in the past, and on costs that are projected by organizations planning similar projects for the New Orleans area.  The long-term costs (50-100 years) for our plan total nearly $83 billion.  These numbers are extrapolated and are highly dependent on future assessment of the city.  While this price tag may look intimidating, we feel that the plan is the most beneficial to both the residents and the ecosystems of the area.  It works toward reducing the city—its population, its industry, and its infrastructure—and returning the wetlands to a healthy state.  It also insures that increasing subsidence, rising sea levels, and heightening storm intensity will have the least impact on human life. 

In order to put this cost in perspective we calculated the prices of reconstructing the city to pre-Katrina levels and of completely demolishing the city.  The first plan (Plan 1 on the Cost Calculation page) includes replacing all housing and infrastructure, rebuilding the topped and destroyed levees, as well as resurrecting the commercial and industrial economy.  However, it does not include improvements to levees, wetlands, zoning, or anything else regarding the enhanced safety of the city.  To do just that would cost approximately $48.5 billion in the next 10 to 50 years.  The projected costs are compiled from the United States Department of Homeland Security’s current plan for the city.  Many of the given numbers were funds designated to the gulf coast region affected by Hurricane Katrina.  We modified these numbers based on our estimations of the amount of money that would be allocated specifically to Louisiana for reconstruction.  (These numbers are approximations, but they are to be used solely for reference.)  This is not only more expensive in the short-term, but it only brings the city back to its previous state of preparedness.  It does nothing to address the issues raised by hurricane Katrina, such as faulty levees, wetland loss, or poor evacuation plans.  This would create many more long-term costs because it would leave the city vulnerable to further destruction in the future.  Quite obviously this is not the most appropriate solution to the problem facing New Orleans.

The final plan (Plan 3 on the Cost Calculation page) compares the cost of the opposite extreme.  Theoretically we could completely destroy the remaining infrastructure and remove all of the debris so that the river could overflow its banks and reclaim the area as a flood basin.  This would disregard the social and cultural benefits of the city of New Orleans.  The nation would not only loose a culturally and historically rich area, but it would also loose billions of dollars in income from tourism and industry.  In addition to this would be the actual cost of demolishing the city and safely removing and getting rid of the debris.  The total of these costs is approximately $293 billion in the next 10 to 50 years.  While this is more expensive in the short-term the long-term costs are relatively insignificant because the area would essentially be abandoned to nature.  The overall cost would be far greater than our plan.  But regardless of cost, it would be difficult to implement a plan like this. The remaining citizens of New Orleans are very loyal to their city, and it would be unjust to force them to pick up their lives so that the river could reclaim their land.   

Speaking realistically, the plan that we have created is the most cost effective and the most beneficial to the city of New Orleans.