How much will it cost to rebuild after Katrina? Judging from the way the federal government is throwing around money, the answer might well be: “How much you got?”
The figure Washington and the media are tossing around is $200 billion.
To put that in perspective, rebuilding after Hurricane Andrew in 1992 cost $26 billion even though the area hardest hit, Homestead, Florida, only has a population of 30,000. After 9/11 New York City got $21 billion for what amounted to the destruction of a few square blocks of city real estate.
The difficulty in estimating how much it will cost to rebuild the areas damaged by Katrina is compounded by a number of variables. Prices for critical building supplies such as lumber, steel and cement as well as fuel and tires are likely to soar. And labor costs are a big unknown. President Bush suspended the regulation that requires contractors to pay “prevailing wages” on federal jobs, but the already acute shortage of skilled craft workers and the lack of housing for out-of-state workers means skilled labor costs could skyrocket.
A rough breakdown of Katrina’s estimated rebuilding costs include:
· Roads and bridges: Norman Mineta, U.S. Transportation Secretary, says the first installments to repair the hurricane-damaged roads and bridges in the area will run $2 billion to $2.5 billion.
· Housing: The government hasn’t calculated any dollar amounts yet, but press reports indicate there are 200,000 homes in New Orleans that will need to be replaced and some 68,000 homes in Mississippi have been destroyed. With a rough estimate of $150,000 per dwelling plus $50,000 for demolition and infrastructure per unit, the cost of putting everybody back into a house will easily top $50 billion.
· Levees: The Army Corps of Engineers estimates it will cost $3 billion to repair the levees damaged by the storm. And, according to the New York Times, a study prior to Katrina estimated it would cost $14 billion to bring all of New Orleans’ levees up to a standard that would prevent similar disasters.
Damaged facilities for which rebuilding estimates are not yet available include:
· Water treatment plants: More than 1,000 are damaged in three states.
· Sewer plants: New Orleans alone accounts for 530, all damaged.
· Industrial/military facilities: The Port of New Orleans, ports and dry dock facilities in the Biloxi/Gulfport region, Keesler Air Force Base and Pascagoula Naval Air Station all report significant damage.
· Commercial real estate: Hotels, casinos and other commercial properties suffered moderate damage to total destruction.
· Petrochemical facilities: As a result of multiple storms this year, 37 shallow oil platforms are missing from the Gulf of Mexico and 20 have been damaged.
· Underground tanks at gas stations: More than 6,000 will have to be tested and inspected for leaks and repaired if necessary.