Mercatus on Policy: All Go in the GO Zone?

February, 2008

In 2005, the Federal Government created the Gulf Opportunity (GO) Zone to spur Gulf Coast recovery. The GO Zone designation gave these hurricane-affected areas special tax incentives and the authority to issue tax-exempt bonds. State and federal policy makers favor such geographically targeted tax incentives believing that they stimulate economic development. However, evaluations of the success of other similar approaches show mixed results. While it is too early to assess the GO Zone directly, the performance of other federal zones offers some guidance on the overall effectiveness of tax incentive programs.

The Road Home: Helping Homeowners in the Gulf Post-Katrina

May 5, 2008

Following the destruction wrought by the 2005 Gulf Coast Hurricanes, Louisiana and Mississippi instituted disaster recovery programs for homeowners. Louisiana’s disaster recovery program, the Road Home program, is “the largest single housing recovery project in U.S. history.” It is also mired in controversy with a record of slow payouts, confusing and conflicting policies and goals, and extremely frustrated applicants.

This comment explores Road Home’s policy goals and design, placing them in the context of the destruction wrought by the hurricanes and the role of insurance and government before and after a disaster. It then contrasts Road Home’s goals and design with the policy goals and design of Mississippi’s Homeowner Assistance Program.

Mississippi’s clearer eligibility criteria and the prioritization of applicants allowed for faster progress than in Louisiana. Louisiana’s decision to distribute funds widely (both geographically and temporally) and without regard to the severity of damage has contributed to a slower recovery in neighborhoods that experienced the full force of flooding. Furthermore, Louisiana’s decision to use Road Home as a community development program by assigning exit penalties to those who do not return to their former homes has limited the personal autonomy of those most affected by the storms and may lock them into highly detrimental situations.

Clearly defining culpability and determining eligibility is vital in structuring disaster assistance. Road Home’s failure to do this could be catastrophic for the long-term recovery of both Louisiana and the evacuees.

Citation (Chicago Style):

Norcross, Eileen and Anthony Skriba. "The Road Home: Helping Homeowners in the Gulf Post-Katrina." Mercatus Policy Series, Policy Comment No. 19. Arlington, VA: Mercatus Center at George Mason University, May 2008.