Katrina: Sea change on the Gulf Coast – Part 1 • The people

Since moving back to New Orleans' devastated Lower Ninth Ward two months ago, Monica and Charles Williams have done all they can to re-create normalcy.

They installed DirecTV and are waiting for an Internet connection. They hooked up a new washer and dryer in the back so they don't have to haul their wash to the laundromat. Each weekend, they fire up the barbecue and invite in anyone who happens to pass by. But a peek out their trailer door reveals how much remains undone.

Rotting houses and rusting cars still litter the neighborhood. Flood-borne saltwater, oil, and chemicals killed off much of the vegetation, turning the ground into a gray moonscape. Now, weeds have taken over. At night, their block – and every block north of them – is dark and silent.

"Sometimes at night you can hear the rumble of those National Guard Humvees and airplanes overhead, but for the most part, it's dead around here," says Mrs. Williams. "I can't believe it's been almost a year and it still looks the same."

Hurricane Katrina created the nation's worst natural disaster since the Okeechobee, Fla., hurricane of 1928 and its costliest ever. It killed 1,577 people, destroyed or seriously damaged 493,000 structures, and subjected some 5.8 million people to hurricane-force winds.

But it hit minorities, like the Williamses, and the disadvantaged, like many of their neighbors in the Lower Ninth Ward, especially hard. Of the 700,000 people most affected by the hurricane, the Congressional Research Service estimates that more than 2 in 5 were black, 1 in 5 was poor, and better than 1 in 10 was elderly.

So when policymakers ask who will return, they're really asking whether areas like the Lower Ninth Ward will recover.

For many poor and blue-collar evacuees, returning will be difficult. Rents are up in most hurricane-damaged areas. So are real estate prices. Even those who can afford to rebuild to more stringent – and expensive – building codes may be shocked at the rise in taxes and insurance.

Such changes are not unusual after a major disaster, experts say. But it is a shock to America's blue-collar coast – the stretch of land from Texas to Florida's western coast where residents had, on average, less education, lower median income, and cheaper housing than people who live along the East or West coasts.

"The blue-collar element is going to find it harder financially to live there, and it will thin out," says John McIlwain, a senior fellow for housing at the Urban Land Institute in Washington. "There will now be some very rich along the coast and some very poor further inland working service-sector jobs."

The affected Gulf region will lose a fifth of its pre- Katrina population, estimates John Logan, a Brown University sociologist.

The question is especially critical for New Orleans, which suffered most of the hurricane's fatalities. A year later, only half of its 455,000 residents have come back.

Here in the Lower Ninth Ward, which saw the worst of the flooding, almost no one has returned north of Claiborne Avenue, where the Williamses live.

"In a lot of ways, it's brought a lot of peace to the neighborhood," says Mr. Williams, a supervisor at the Avondale Shipyard, his employer for the past 18 years.

After a 12-hour shift, he's out cutting the weeds in back of the house with a string trimmer, "trying to make the place look presentable."

The Lower Ninth was never quiet like it is now, says Mrs. Williams, the mother of six grown children, who was born and raised here herself. This neighborhood has always been known for its hospitality and familiarity. There was always someone pushing a lawn mower, grilling meat, or sharing the latest gossip with a neighbor.

But after talking to many neighbors, Mrs. Williams estimates that not even half the people on her block are coming back. Most of those who aren't are elderly, she says.

Many evacuees say the deciding factor will be this year's hurricane season.

"If New Orleans refloods, you can kiss off large parts of the city," says Loren Scott, president of an economic forecasting firm in Baton Rouge, La. "Some of the people will not come back and many of the businesses thinking of coming back will not."

Ryan Franklin, who used to live in the Lafitte housing project just north of the French Quarter, considers himself fortunate.

Evacuated to Fort Worth, Texas, he had a job to come back to and a temporary place to stay. It took him four months to find his own apartment, he says, mainly because so many apartments were destroyed, rents skyrocketed, and landlords were reluctant to accept Section 8 rental vouchers that the federal government provides to low-income residents.

Recognizing the problem, the US Housing and Urban Development Department (HUD) boosted the value of the vouchers 35 percent in June for New Orleans, allowing Mr. Franklin to secure a one-bedroom apartment within walking distance to his manager's job at McDonald's.

The spurt in rents has been matched by a rise in home values in many areas undamaged by the flood. So while Orleans Parish (which includes New Orleans) has seen average home prices barely budge since last August, St. Tammany Parish to the north has seen prices rise from 11 to 25 percent. The three parishes to the west of Orleans Parish have seen average home prices rise 55 percent.

Building more affordable housing will take time. Federal housing authorities had announced they would tear down four flooded-out housing projects in New Orleans and replace them with mixed-income units, which would have taken up to three years.

But Monday, they reversed that decision in hopes of getting low-income residents back more quickly. HUD Secretary Alphonso Jackson said he was opening the projects immediately, since most of the apartments are undamaged.

Critics are sounding the alarm because the longer rebuilding takes, the less likely it is that low-income people will return.

"Nobody is providing the kind of leadership that is needed. They are acting like it's not a crisis anymore, but it is a 10-year crisis that affects hundreds of thousands of people," says Professor Logan, the sociologist. "Depending on what decisions are made, there could be a very substantial relocation of the working-class population to the outermost reaches of the area, where there are no basic services."

Think trailer parks an hour or more from the city, he says. "It would almost look like the shantytowns around third-world cities."

Even a dramatic boost in housing costs wouldn't propel New Orleans to levels seen on the East Coast (where the median value of a home is nearly double the Gulf Coast level) or the West Coast (where it's triple).

"Before the storm, New Orleans had some of the cheapest housing in the country and some of the best free healthcare," says Arthur Sterbcow, president of Latter & Blum Realtors, a large brokerage firm in Louisiana. "There were tremendous incentives for the poor and elderly to stay."

The irony is that by hitting the poorest stretch of coastline in the continental US, hurricane Katrina may push out enough poor and enough African-Americans to cause its remaining population to become, on average, richer and less black, especially in New Orleans. With the economy in dire need of service-sector and low-skilled workers to support the massive reconstruction efforts, New Orleans has already seen its minuscule Hispanic population double, says Karen Paterson, Louisiana's state demographer.

"From the perspective of the people who live in New Orleans, that might be hunky dory," Logan says. "But there is always a cost [to society] in the long run, whether in increased crime or less investment in the labor market."

Even before Katrina, New Orleans was one of the fastest-shrinking cities in the US, having lost more than a quarter of its population since 1960. It would take a slightly larger drop – and bigger than Katrina's expected 20 percent reduction – to allow growing Tampa, Fla., to take over immediately as the second-largest Gulf Coast city after Houston.

The region does retain two powerful lures to bring its citizens back. First, it is home. "When you're rooted here, you're rooted here. You can't say why," says Ruby Garrison, who hopes to rebuild someday her crumbling bungalow in the Lower Ninth Ward.

And it has a laissez-faire, gumbo culture that tolerates, even celebrates, the nonconformist.

After a full day of construction work, Emonie Singleton is riding his horse, Star, along the beach in Waveland, Miss. He was able to move back after charities and church groups began rebuilding low-income housing.

While he knows many who have given up on the region, many others are biding their time, trying to figure out how to return, he says. "A lot of people who lived down here can't really blend in other places."

• Staff writer Ron Scherer, correspondent Matt Bradley, and contributor Liz Owuor contributed to this report.