Buyouts after a disaster — may be the most cost-effective recovery option

Hurricane Katrina Video from NASA GOES Satellite

Image by NASA Goddard Photo and Video via Flickr

From a book review in, March 17, a Harvard economist looks at urban life in the future: Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Healthier and Happier, by Edward Glaeser.Penguin Press; 352 pp; $29.95.  Athough the book is primarily about urban planning, one quote from the review is worth considering:

The author’s prescription for Detroit, as well as Buffalo and Leipzig, is to “shrink to greatness” by searching for fresh advantages. What if they fail? Well, that would be too bad, but Glaeser believes cities are about people, not places or buildings. Does it make economic sense to resurrect Detroit when the cost of building a house is greater than the reward from selling it? It could have been cheaper, he notes, to hand every household in New Orleans $200,000 after Hurricane Katrina rather than pump vast quantities of public money into rebuilding a city of waning economic significance. As disturbing as this may sound for New Orleanians, there exists a far more disturbing thought: Glaeser may be right. As the latest U.S. Census figures prove, the city’s capital is disappearing in droves.

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