What Government Destroys, Economic Freedom Can Rebuild, Part II

Last week I wrote about how private enterprise, in profit or non-profit form, can rebuild urban areas that have been devastated by decades of welfare-state policies. Here is another story on the same issue. In this case, from New Orleans, the cause of real estate decay is partly different – some of the properties involved were badly damaged by Hurricane Katrina – but many of them have been blighted and left to deteriorate for many years. What is so interesting about this story is that the efforts to improve these New Orleans neighborhoods are not funded and led by private entities. Instead, it is all in the hands of government-appointed bureaucrats, and bankrolled by taxpayers. From the Times Picayune:

Three and a half years after it produced one of the biggest scandals of former Mayor Ray Nagin’s tenure, the quasi-city housing agency known as New Orleans Affordable Homeownership is finally dissolving for good. But a different anti-blight agency, the New Orleans Redevelopment Authority, also known as NORA, isn’t thrilled that it has to pick up the mess left by its sister nonprofit. NOAH was supposed to have shut down in 2008 after blogger Karen Gadbois and television reporter Lee Zurik found that it had paid $1.8 million in city money for contractors — some of whom had ties to NOAH’s then-director Stacey Jackson — to gut and board up 870 storm-damaged homes that in many cases did not get remediated.

And where did those $1.8 million come from? Obviously not some private investor. They came from the taxpayers. And who owns the real estate in question? Not some private company. It is, again, the taxpayers. Because the NOAH was dealing with other people’s property and other people’s money, mismanagement came at no financial risk to them. They could allow contractors to get paid before the job was done:

The city attorney’s office … found that six firms — including two that figure in a state ethics complaint — had not performed the work for which they were paid, to the tune of about $218,000.

 After all, it was taxpayers’ money not the personal funds of the NOAH board members.

To make matters worse, the real estate fraud and corruption did not even start with NOAH:

In particular, two properties on Chef Menteur Highway have a troubled past. The city awarded millions in federal grants to a nonprofit, Desire Community Housing Corp., to restore the blighted Bayou Apartments, but had to seize them back when they remained in disrepair. Why they were transferred to NOAH is unclear.

Probably because that way, someone could keep milking the city for taxpayers’ money without having to work for it. At least it looks like New Orleans Mayor Mitch Landrieu has decided to do something about the situation:

After The Lens and WVUE began asking about those properties, Mayor Mitch Landrieu replaced NOAH’s remaining board member, Ed Shanklin, with three city officials. The new board voted to transfer the agency’s remaining assets — nine properties and $26,000 in a bank account — to NORA. NORA is set to approve those actions at a board meeting Monday. At a NORA committee meeting Thursday, Assistant City Attorney Brenda Breaux said while there are code enforcement liens against three of the nine parcels and back taxes owed on one, NORA would get clear titles so it could dispose of the properties quickly.

Contrast this mess to the successful urban renewal projects in Baltimore and Cleveland: there, the funding is private and the work is being done by private entities. There is no government involved. The people who provide the loans have a personal interest in seeing that something gets done and that the money they lend is being used properly.

New Orleans needs economic freedom, not more tax-funded, bureaucrat-run “projects”.