Rebuilding New Orleans and the Gulf Coast
By Bill Bynum
CEO of Hope Enterprise Corporation and Hope Credit Union
Posted August 31, 2011
The Gulf Coast is a unique region, built by a diverse population that balances a rich cultural heritage with a thriving business environment. And at its heart is New Orleans; a city that is truly unlike any other in the world.
It blends old-world charm with contemporary style. It combines a strong local flavor with global trade. You can experience the energy of a bustling urban center and the quiet backwater bayous that are only a few miles apart.
And it continues to live and breathe and grow and prosper after the worst disasters in our nation’s history. Its people and its heritage have been battered by Katrina’s high winds and rough waters. It has felt the effects of the worst economic crisis since the Great Depression. It has also weathered the storm of the greatest man-made environmental disaster in the Deepwater Horizon oil spill.
Looking beyond Mardi Gras, and Jazz Fest, and the Quarter, we see some things that provide critical insight into socially responsible investing (SRI) outcomes and teach valuable lessons to those interested in creating a more just and sustainable society.
One of the most significant outcomes of Katrina, and one that continues to bear fruit, has been the attention of and support from socially responsible investors across the nation. Katrina turned hearts and minds to the need that has existed for generations in one of America’s most impoverished regions—a status that was only exacerbated by subsequent events.
Millions of dollars have been directed to emergent and ongoing needs. We see individuals and organizations consistently engaged in discovering what their deposits, donations, and program-related investments have done. The new awareness has provided an opportunity to broaden the conversations we have and to open dialogs that yield financial and social returns to Gulf Coast residents and to people who continue to be concerned about the area.
While a great deal has been accomplished, there are still years of rebuilding ahead.
Communities and families from Alabama to Texas still need the dedication of people engaged in developing SRI agendas and directing funds so the gains that have been made do not fall by the wayside for lack of resources to complete critical work.
There has been a great deal of positive activity relating to business growth and job creation in New Orleans and across the Gulf Coast in the years following Katrina. In the early days there were a number of specialized programs that provided incentives and low-cost financing to companies to help them rebuild, stabilize, and even grow to support jobs and the communities that needed employers, tax revenue, and the critical services they supplied.
SRI funding was critical to business redevelopment. A number of financial institutions, including HOPE, used SRI allocations to make emergency bridge loans available to small businesses. Investments made it possible to support microlending programs that deployed loans to entrepreneurs that would never have been considered for a traditional bank loan.
Several rounds of the Louisiana Business Recovery Grant and Loan program delivered grant funding and low-interest loans to companies who were rebuilding and helping the region to recover.
There are positive signs that growing small businesses continues to have solid support. Mayor Mitch Landrieu and community leaders are supporting a number of efforts that are bringing funding and support to develop businesses and support job growth. As part of that effort, HOPE is participating in the Goldman Sachs 10,000 Small Businesses Initiative, which is providing training and a funding pool available to entrepreneurs that are positioned for growth. HOPE is also the lending partner for the New Orleans Fresh Food Retailer Initiative, a program that addresses the lack of affordable quality foods that has not been adequately addressed since the hurricane.
But companies across the Gulf Coast are also facing the pressure from restricted lending due to the ongoing economic environment. And more entrepreneurs and small businesses were affected by the Gulf oil spill but did not receive the kind of support that was seen after Katrina. Community Development Financial Institutions (CDFIs) will continue to remain a vital part of providing resources to viable companies that are not being served by mainstream financial institutions.
The years since Katrina have seen an unprecedented coalition of nonprofit, religious, and charitable institutions working together to restore the region. Across the Gulf Coast, partnerships are have been created that have made a wide variety of successes possible. Funding activity, resource sharing, and policy advocacy are all areas that have benefited from strong involvement by a large number of concerned organizations.
Nonprofits have been filling the gaps left by private industry and government services. They have been successful in addressing needs for business development, affordable housing, personal financial services and counseling, and cultural preservation.
Of particular note has been the large number of interfaith endeavors. HOPE has seen leadership from a wide range of coalitions that include diverse constituents and represent broad geographies. The coalitions that have been built continue to provide services to the region’s most vulnerable families and communities.
Nonprofits will be an invaluable resource as long as rebuilding remains unfinished. There are still years of work ahead and that will require the expertise and services these organizations offer to the people in areas that have been affected by difficult times. We need to keep individuals and institutions focused on investing in the work that nonprofits are doing and the lives they are changing so they have the support to do their work.
After the hurricane, things started slowly on the housing front. Removing debris, insurance delays, construction resources, and incomplete building codes all delayed a speedy recovery. While the post-Katrina deficit remains in the thousands of homes, significant progress has been made.
A number of national, regional, and local housing groups are working to develop single- and multi-family homes for the region. Thousands of affordable apartments and houses have been constructed, often times replacing structures that were deteriorating and burdening families with high maintenance and repair costs.
Several high-profile projects have kept a spotlight on the rebuilding process and the needs that still exist. Brad Pitt’s Make It Right and Habitat for Humanity’s Musicians Village in New Orleans and HOPE’s Home Again program on the Mississippi Coast helped demonstrate innovative approaches to creating housing opportunities.
The new homes are often part of sustainable developments, including community services, shopping, schools, and cultural resources in the planning and development. There is also a heavy emphasis on going green: low VOC flooring, energy efficient appliances, recycled and recyclable materials, and environmentally friendly construction methods.
Blight has decreased significantly, but remains above 25 percent. Rehabilitating homes and providing affordable mortgages to homeowners is still a difficult challenge.
There continues to be a void of soft second subsidies needed to bridge the gap between housing prices and the mortgages that many people can afford. There are also thousands of rentals and owner-occupied dwellings that remain vacant five years after the storms because residents and landlords aren’t able to obtain the short-term financing to repair damaged property. While prices for livable homes have escalated, vacant properties continue to deteriorate, making the likelihood that those families can ever rebuild more remote.
Immediately following the storm, people had a tremendous need for access to their financial resources. The difficulty and confusion surrounding people’s accounts was made worse by the lack of infrastructure to access banks and credit unions physically or electronically.
Many banks and credit unions were closed or destroyed. Many people were eligible to receive financial support from government entities or insurance companies but were unbanked, leaving them without the account necessary to receive proceeds. HOPE and other community-based institutions were important lifelines that served as a depository for people who needed a way to manage their funds and the additional services that only local organizations were able to provide.
Funds from socially responsible investors were used to support emergency bridge loans to individuals who needed financing to meet immediate needs such as debris removal and water damage mitigation. HOPE directed millions of dollars to organizations and individuals who were able to quickly and effectively use the funds to mitigate the damage and start the recovery process.
These unique partnerships and innovative programs have continued to serve residents of the Gulf Coast region. There are numerous Individual Development Accounts (IDA) programs that are helping people build assets, often supplying matching funds for participants who are saving money, and providing them with the financial education to help change financial attitudes and habits. Organizations are working together to provide financial education that is more important than ever to families who have traditionally lived on the edge of financial sustainability.
HOPE and other institutions like it are also offering a payday loan alternative that rescues individuals from the high cost of doing business with predatory organizations such as check cashing outlets and pawn shops. SRI investments have supported loan funds and reserves to make this program available to residents across the city during the rebuilding process.
What people still lack is the ease of access to affordable financial services. Many bank branches have never reopened and some lower-income individuals don’t have a computer or Internet access at home. Promoting alternative banking solutions like HOPE’s mobile banking or shared branching options helps reach them where they are. HOPE is working with other nonprofits in the region to continue building its HOPE Affinity Network, a mechanism that delivers HOPE’s products and services to residents through employers, nonprofits, and religious institutions.
The Gulf Coast is steadily making its way towards a better future. It continues to need the support and attention of federal, state, and local governments; business and community leaders; religious institutions and social groups; and socially responsible investors and volunteers.
People often speak of “the new normal,” a phrase that does indeed have some validity. Some things will never be the same again. In some cases this is a great loss. In others, however, this is an opportunity to find a new and better way forward, – one that creates more opportunity and a more sustainable environment for businesses, communities, and families.
We must work to see that our future is given every chance to be a good one that considers the needs of all its people and provides a place at the table for even the poorest and the most challenged.
Socially responsible investors have meant a lot to New Orleans and to the Gulf Coast. Without people who realized that this area needed help that wasn’t coming from other places, the progress we have made would have been impossible. We thank you for your support and for believing in this region and its people. We invite you to experience the place we call home and we know you will see in it the same things that make us love it and keep us committed to seeing it prosper.
For more information on HOPE go to http://www.hope-ec.org
Article by Bill Bynum, CEO of Hope Enterprise Corporation & Hope Credit Union
- Gulf Coast marks a difficult 6 yrs since Katrina (cbsnews.com)
- Katrina’s 6th anniversary finds Gulf Coast on mend (seattletimes.nwsource.com)
- New Vibe In New Orleans 6 Years After Katrina (npr.org)
- Katrina’s Children – The Hurricane Through Children’s Eyes (freetech4teachers.com)
- Post-Katrina New Orleans (americanunion.wordpress.com)