The Big Blank Canvas

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And in one crucial area, there has even been what looks like an important breakthrough. After months of inaction, the pieces have come together for a real plan to get money to homeowners for rebuilding. Two weeks ago, George W. Bush promised to ask Congress for an additional $4.2 billion for that purpose. That would come on top of $6.2 billion allocated last year. Within days, Governor Kathleen Babineaux Blanco proposed a $7.5 billion plan that relies on the federal money. It would make available to the owners of storm-damaged homes a combination of grants and affordable loans worth up to $150,000, depending on the prestorm value of the house, minus whatever insurance payouts and Federal Emergency Management Agency (FEMA) aid a homeowner might get. In New Orleans alone, the payouts could apply to about 108,000 homes. The Governor also wants to earmark $1 billion to encourage construction of mixed-income housing, mostly apartments. That's a must in a city where most of the poor rented and rents have risen 50% or more since Katrina.

Of the 455,000 people who once lived in New Orleans, only 144,000 have returned. The hope behind the new scheme is that the combination of more money and clearer formulas for distributing it will create real incentives to draw people back. "The last two weeks have been more than encouraging. They've been awesome," says Walter Isaacson, a former managing editor of TIME who is vice chairman of the Governor's Louisiana Recovery Authority, which holds the purse strings for all federal recovery funds. "There's more money, and most importantly, there's a plan."

It's one that could help defuse the fraught racial politics of the rebuilding process. Those grow out of the fact that many of the city's most flood-prone areas, like the Lower Ninth Ward, are home to a substantial number of its African-American residents, who look long and hard at any sign that the city may forbid them to return. The city has been eager to discourage piecemeal redevelopment, in which a handful of residents here and there try to re-establish themselves in vulnerable neighborhoods. But after Mayor C. Ray Nagin hinted last year that he would consider declaring certain neighborhoods off limits, the angry reaction of black residents and politicians got him to back down. For now, his Bring New Orleans Back Commission (BNOB) has been content to go on supervising a process in which residents in heavily damaged neighborhoods are being paired this month with planners and other specialists to determine how--or even whether--their area can be brought back to life.

Governor Blanco's new housing formula, which improves on one put forward by Nagin, has the advantage of allowing people to rebuild pretty much anywhere. But there's one important catch: wherever they build, they must meet stringent new state building codes and FEMA rules that require houses in low-lying areas to be raised several feet above ground level. The most flood-prone neighborhoods, many of them poor, will probably require the most new protections, at a cost that could discourage residents from going back to the same spot.