Katrina's Silver-Lining. Three words New Orleanians didn't ever expect to hear, yet uttered this Sunday in print by both the Seattle Times and the New York Times. While the rest of the nation's construction industry and real estate market has steadily suffered over the past 12 months, in New Orleans real estate prices hold firm and the construction industry is 'booming.' Here is a quote from the Seattle Times article about the NOLA construction market, and even a quote from local contractor Landis Construction:
The recovery dollars are paying for projects large and small, including an $800 million replacement of the damaged "twin span" bridges over Lake Pontchartrain and thousands of homes being fixed under the state-administered Road Home program. The Army Corps of Engineers continues to use contractors to strengthen the levee system. In working-class neighborhoods such as the Ninth Ward, laborers are pounding away on small-scale renovations. "Katrina was a horrible nightmare, but the reality is that, for the construction industry, it's been a blessing," said Theresa Leger, a vice president of Landis Construction, a local firm that has remained busy since the hurricane.The New York Times article looked at the city's sustaining economy from a different angle; as evidence that a stimulus package can work to improve economic conditions. The article calls the federal government's $51 billion injection into post-Katrina Louisiana an "unintended trial rune" of the $787 billion national stimulus bill. And what are the results? The New York Times says the results are good - and especially for the construction industry. Here's a quote from the piece:
State economists specifically mention what one called “the ongoing building boom” from federal dollars as a main reason for the numbers. Largely a result of the damage caused by Hurricane Katrina, construction projects have not dried up as they have elsewhere, and a few can even be seen in downtown New Orleans. Construction has “really hung in there and done very well,” said Loren Scott, an emeritus professor of economics at Louisiana State University. “In most states construction is way down, but in ours it has been up.” The relatively low unemployment rate in Louisiana “tells you that the stimulus can have an effect,” Mr. Scott said.Read more about the Stimulus Package and how it relates to the Construction Industry on the Construction Law Monitor here.