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affordable housing
Hard Lessons From Katrina We’re Still Learning 20 Years Later
Hurricane Katrina not only exposed the vulnerability of communities to extreme weather events exacerbated by climate change, but also systemic injustices and a deeply flawed US insurance system.
Aug 29, 2025
It’s been 20 years since Hurricane Katrina struck the Gulf Coast of the United States, wreaking havoc in Louisiana, Mississippi, and Alabama. An estimated 1,833 people died in the hurricane and the flooding that ensued. The storm destroyed or damaged more than a million housing units and more than 200,000 homes, causing one of the largest relocations of people in US history.
In the months and years that followed, entrenched inequalities, questionable policy choices, and predatory practices by private insurers decided who could return home and rebuild. For instance, countless residents impacted by the hurricane learned too late that their standard homeowners’ insurance offered no protection against flood damage, leaving them to shoulder devastating repair costs themselves. In cities such as New Orleans, these dynamics further marginalized Black residents, who were more likely to live in flood-prone neighborhoods. The result was widespread and often permanent displacement, with longtime communities effectively erased from the map.
Hurricane Katrina not only exposed the vulnerability of communities to extreme weather events exacerbated by climate change, but also systemic injustices and a deeply flawed US insurance system. Private insurers pour billions of dollars into the fossil fuel industry, which is the main contributor to climate change. Thus, insurers help fuel the very crisis that is driving more frequent and severe climate disasters like Hurricane Katrina. Meanwhile, they are passing the financial risk of the escalating impact of climate change onto policyholders and forcing them to bear the costs of the crisis the industry itself helps perpetuate.
As climate-driven storms grow more frequent and increasingly destructive, the same insurance failures, housing crises, and inequitable recovery that followed Katrina now threaten communities nationwide. Two decades later, Katrina’s hard lessons cannot be ignored. Everyone deserves to live in safety and the opportunity to stay in the place they call home. Corporate greed and government negligence cannot continue to undermine these rights.
The Hurricane
On August 29, 2005, Hurricane Katrina made landfall with winds that reached 140 miles per hour. These high-velocity winds drove a storm surge that raised sea levels 25 to 28 feet above normal along parts of the Mississippi coast, and 10 to 20 feet along the southeastern Louisiana coast. The surge breached protective levees, causing catastrophic flooding. Two days after the hurricane struck, 80% of the city of New Orleans was underwater. Other coastal towns and cities in Louisiana, Mississippi, Alabama, and along the western Florida panhandle also experienced significant storm surges and destructive winds, which caused widespread flooding and damage to homes.
The Great Displacement
Approximately 1.5 million people aged 16 years and older had to leave their residences in Louisiana, Mississippi, and Alabama because of Hurricane Katrina. In New Orleans, where the mayor issued a mandatory evacuation order, a population of around 500,000 was reduced to a few thousand people within a week of the storm.
As water was pumped out of the flooded areas and basic services and infrastructure were restored, New Orleanians were allowed to return. But tens of thousands were not able to do so. One year after Katrina, approximately 197,000 residents had not come back to the city; many relocated to the relatively close cities of Houston and Baton Rouge, but others as far away as Alaska and Massachusetts. Still today, many of those who evacuated the city, hoping to return, remain displaced. New Orleans’s metropolitan area population remains 20% below pre-Katrina levels.
The Impact On Black Communities
The development of New Orleans has been fraught with injustices. Racial segregation, redlining, and chronic underinvestment in Black communities pushed residents and renters into areas with crumbling infrastructure, poorer-quality homes, and greater exposure to environmental hazards and contaminants.
When Katrina hit, Black residents were concentrated in the most vulnerable parts of New Orleans, located well below sea level and poorly protected by inadequate levees. Accordingly, neighborhoods with the highest percentages of Black residents saw greater housing destruction from the storm.
Did You Know?
The disparate impact of climate disasters on property and infrastructure in US minority communities is the result of nearly a century of discriminatory home lending and insurance policies.
In the 1930s, the US federal government used a rating system in its low-cost home loan program to assess lending risk. Assessors created maps ranking the perceived risk of lending in certain neighborhoods, with race often used as the determining factor in assessing a community’s risk level. Black and immigrant neighborhoods were typically rated as “hazardous” and outlined in red, warning lenders that the area was a perilous place to lend money. Known as redlining, these and other discriminatory practices led to a lack of investment in minority communities.
This lack of financial access resulted in shoddy construction and poor infrastructure that have made minority neighborhoods less resilient to climate disasters and more prone to other financial risks. For instance, insurers are more likely to increase premiums if they determine that properties are less resilient to climate damage. This new financial practice is known as bluelining, and it occurs when insurers raise their prices or pull out of areas that they perceive to be at greater environmental risk.
Reconstruction: A New Pathway to Segregation?
For Lousina’s Black residents, Katrina’s damage was compounded by discriminatory recovery policies that deepened inequalities. After the storm, the federally funded Road Home program was launched to help residents repair or rebuild damaged homes. It offered grants of up to $150,000 per homeowner, but payments were based on whichever was lower—the home’s pre-storm value or the cost to rebuild.
Because property values in Black neighborhoods were often far lower than in white neighborhoods, this meant many Black homeowners would receive only a fraction of what they needed to rebuild. In one case, a woman had rebuilding costs of over $150,000, but because the estimated value of her home pre-storm was much lower, she would’ve received an essentially useless grant of $1,400. As a result, the program was alleged to discriminate against Black homeowners, and a federal class action suit was filed on November 12, 2008, on behalf of 20,000 homeowners. The litigation settled with Louisiana agreeing to reward approximately 1,300 homeowners with $62 million in additional compensation.
The Blow to Affordable Housing
Renters fared no better. Hurricane Katrina damaged or destroyed 82,000 rental units in Louisiana, 20% of which were affordable to extremely low-income households. The impact on public and federally subsidized rentals was especially severe. In New Orleans, public-housing residents were displaced at a rate of nearly 90%. And reconstruction policies only exacerbated the disparities these residents faced.
Consider this.
Before the storm hit and floodwaters rose, the Housing Authority of New Orleans evacuated all residents living in its 7,379 public housing units. After the waters receded, residents were allowed to return to approximately 1,600 units. Most other units were sealed off with steel doors and barbed wire—officially due to storm damage—before being slated for demolition. Yet, the redevelopment that followed included far fewer mixed-income apartments. By 2010, five years after the hurricane, less than half of the original 7,379 units were open in any form. The dramatic decrease in public housing contributed to the permanent displacement of many of New Orleans’ longtime residents.
After Katrina, renters faced a range of economic pressures. Many landlords delayed repairs or rebuilding, especially in low-income areas, which are seen as less profitable. Some used the disaster as an opportunity to renovate and target higher-paying tenants, further shrinking the supply of affordable rentals. Within five years of the Hurricane, the stock of mid-priced housing units in New Orleans had declined by more than two-thirds, pushing the median rent from $689 in 2004 to $876 in 2009. These rising costs hit Black residents hardest, forcing many to leave and permanently altering the city’s character.
Even those who could afford to return to New Orleans and buy a new home after Katrina faced soaring prices—up 14% in the first year alone—as demand outpaced the reduced housing supply. In addition, homeowners’ insurance premiums jumped 22% in Louisiana between 2005 and 2007, adding yet another barrier to homeownership.
The Flood Exclusion Trap
Then, as now, and to the surprise of many victims of the Hurricane, standard home insurance policies in the US did not protect homeowners from floodwater damage. This means residents must buy additional flood insurance to be protected in the event of a disaster like Katrina.
New Orleans residents had among the highest participation rates in the country in the National Flood Insurance Program (NFIP), a federal government program that provides flood insurance to homeowners, renters, and businesses. However, the majority of residents in areas affected by Katrina had not purchased flood insurance. Uninsured property losses due to flooding were economically devastating, exceeding an estimated $41.1 billion (USD 100 billion in 2024 prices). In addition, the NFIP incurred some $16.1 billion in losses and a deficit exceeding $18 billion as a direct result of the flooding caused by Katrina.
Even for New Orleanians with flood insurance, coverage likely fell short. Policies typically covered about $152,000—the city’s median house price at the time. But this was rarely enough to replace the damaged household contents or to pay residents for temporary housing while their home was uninhabitable.
More and more, whether people hit by climate-driven storms get anything from their insurers depends not on the fact that their homes were damaged, but on how they were damaged.
While the standard home insurance policy does not cover water damage from a hurricane, it does cover wind damage. This gap left residents and insurers arguing about whether Katrina’s destruction to their homes was caused by its high-velocity winds or the flooding that followed, with multiple lawsuits challenging the validity of flood exclusions in insurance policies. Even before the flooding receded and residents of Louisiana and Mississippi could start to rebuild their lives, courts were inundated with litigation, with about 6,600 insurance-related lawsuits being instigated in the US District Court. Yet, Katrina’s destructive flooding was driven by a storm surge powered by the hurricane’s high winds—the very peril homeowners’ policies are supposed to cover.
On September 15, 2005, Mississippi’s Attorney General Jim Hood filed a case against five of the largest homeowners’ insurers in the state. Attorney General Hood sought a court declaration that the flood exclusion provision in standard home insurance policies was “void and unenforceable” and in violation “of the public policy of the State of Mississippi.” However, in that case and others, courts ruled that the flood exclusions were spelled out clearly in homeowners’ insurance policies and did not violate public policy.
The exclusion of water damage from insurance coverage remains a present issue for existing homeowners. According to the Federal Emergency Management Agency, since 1996, 99% of US counties have been impacted by flooding, but only 4% of homeowners have flood insurance. And, more importantly, over half (56%) of American homeowners don’t know that their home insurance policy excludes flood damage. As hurricane season intensifies, many homeowners will be shocked to learn that their insurance does not cover flood loss.
Insurers’ Favorite Loophole: Wind vs. Water Damage
After Katrina, some insurers exploited the false dichotomy between wind and water damage, classifying losses as water damage to shift liability onto homeowners or the NFIP.
In 2013, a federal jury in Mississippi found that State Farm Fire and Casualty Co. defrauded the NFIP after avoiding covering a policyholder’s wind losses from Katrina by blaming the damage on storm surge, which is covered by federal flood insurance. Almost 10 years later, in August 2022, State Farm settled the case, agreeing to pay $100 million to the federal government.
State Farm was not the only insurer engaged in nefarious behavior, attributing Hurricane Katrina damage to flooding instead of wind. In oral argument before the Mississippi Supreme Court in 2009, insurance company USAA publicly admitted that it shifted its own costs to the NFIP and thus taxpayers.
The false dichotomy between the wind and water damage resulting from a hurricane remains nebulous. The damage caused by Hurricane Ian in Florida, North Carolina, and South Carolina in 2022, with its record-high wind speeds, generated $63 billion in private insurance claims. In contrast, 2018’s Hurricane Florence primarily caused water—not wind—damage in North and South Carolina, leaving uninsured flood losses estimated at nearly $20 billion and letting private insurers largely escape liability. More and more, whether people hit by climate-driven storms get anything from their insurers depends not on the fact that their homes were damaged, but on how they were damaged.
Regulators Must Act: People over Profit
Hurricane Katrina exposed widespread gaps in home insurance coverage that persist today. In the 20 years since Katrina, unmitigated climate change has fueled rising temperatures and made extreme weather events such as hurricanes both more frequent and more severe. As storms grow costlier and more destructive, insurers have raised home insurance premiums and declined to renew many policies, leaving households with fewer options for protection. This escalating cycle has produced today’s insurance crisis.
Federal and state lawmakers must respond. The federal government must reform the NFIP to improve federal flood insurance and ensure it provides affordable coverage for more hazards. At the same time, the NFIP should do more to support community-based mitigation. States, meanwhile, must use their regulatory authority over insurance markets to address skyrocketing insurance costs and growing coverage gaps resulting from mounting climate change impacts.
Regulators should adopt legislation, like New York’s Insure Our Future bill, to prohibit insurers from underwriting new fossil fuel projects, require them to phase out support for existing projects, and force insurers to divest from fossil fuel companies.
The insurance industry cannot ignore its role in fueling the very crisis it now faces. Climate change-induced disasters are indisputably driven by fossil fuel emissions. And insurance companies facilitate climate change by investing in fossil fuel companies and underwriting fossil fuel projects. US insurance companies have investments of more than $500 billion in fossil fuel-related assets, including coal, oil, and gas. In 2022 alone, insurers worldwide collected $21 billion in premiums for underwriting fossil fuel projects—directly enabling their expansion.
Regulators should adopt legislation, like New York’s Insure Our Future bill, to prohibit insurers from underwriting new fossil fuel projects, require them to phase out support for existing projects, and force insurers to divest from fossil fuel companies. Without bold action, insurers will continue to profit from climate destruction while leaving families and communities to bear the costs.
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Providing Housing to End DC Homelessness Would Be Far Cheaper Than Trump’s Takeover
If the guard remains deployed for three months, it would cost more than operating public housing for the entire unhoused population in DC for an entire year.
Aug 23, 2025
US President Donald Trump mobilized the DC National Guard under the guise of restoring security in the nation’s capital—despite DC’s crime rate being at a 30-year low. What began as a deployment of 800 DC National Guard troops has grown to encompass 2,091 as of this writing, as Republican governors send hundreds more.
Trump hasn’t just complained about alleged crime in the district—he’s placed a target on people experiencing poverty and homelessness. Claiming that we’re “getting rid of the slums,” Trump has called on troops and police to forcibly remove unhoused people from the city.
Federal law prohibits deploying the military on US soil, except under certain extraordinary circumstances. Trump is currently facing legal challenges over his 60-day deployment of troops in Los Angeles earlier this year under equally unfounded claims about violence and risk—and against the wishes of the troops themselves.
Now he’s ordering soldiers into our streets for the fourth time as president to viciously target some of the most vulnerable members of our society—despite abundant evidence that prosecuting homelessness only makes it worse.
The cost of this cruel power grab is borne by taxpayers like you and me.
The daily expense of deploying troops to DC is more than four times the daily cost of operating public housing for Georgia’s unhoused population, five times for Nevada’s unhoused population, and 15 times for all unhoused people in Wisconsin.
Previous reporting found that National Guard deployments cost the US government $530 per guard member, per day. So the price tag of deploying 2,091 troops to DC is well over $1 million per day—and the number of troops will likely continue to grow. And with no deadline for the DC deployment, those costs could add up for months or even years.
This militarized spending comes at the expense of federal programs—like public housing—that actually do prevent crime and improve health and education outcomes.
Using those figures and other publicly available data, I calculated that the daily cost of operating public housing for all 5,616 people who are unhoused in DC on any given night is one-quarter the daily expense of deploying the National Guard. If the guard remains deployed for three months, it would cost more than operating public housing for the entire unhoused population in DC for an entire year.
This is true for every community across the country—including the states whose GOP governors are voluntarily sending National Guardsmen to the capital. Across those six states—Louisiana, Mississippi, Tennessee, Ohio, South Carolina, West Virginia—some 30,000 people are unhoused. The daily cost of operating safe shelter for all 30,000 would be less than one day of the DC occupation.
This holds true for just about every state, I learned.
The daily expense of deploying troops to DC is more than four times the daily cost of operating public housing for Georgia’s unhoused population, five times for Nevada’s unhoused population, and 15 times for all unhoused people in Wisconsin.
If you want numbers for your own city, county, state, or congressional district, you can use the National Priorities Project’s trade off calculator at NationalPriorities.org to learn more about what taxpayers in your area are paying toward militarism—and the services we could be enjoying instead.
Trump’s decision to hyper-militarize our streets is transpiring on the heels of the MAGA budget bill, which cuts food and medical services for millions across the country to further enrich billionaires and war profiteers.
Deploying troops in our nation’s capital, rather than investing in what makes communities safe and prosperous, is yet another attempt to scapegoat struggling people—especially communities of color—to advance a draconian agenda in service of billionaires, war profiteers, and white supremacy.
Government spending on straightforward solutions that help poor and working-class people faces constant political backlash. But providing affordable housing to end homelessness in DC would be far cheaper than deploying troops—and would do far more to improve the city’s security.
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Trump's DC Occupation Costs 4 Times More Than It Would Take to House City's Entire Homeless Population
"This militarized spending comes at the expense of federal programs—like public housing—that actually do prevent crime and improve health and education outcomes," said researcher Hanna Homestead.
Aug 22, 2025
Last week, when Trump federalized Washington, DC's police force and deployed the National Guard to occupy its streets, one of his main orders was to "end vagrancy" by destroying homeless encampments and arresting and forcibly relocating the people taking shelter there.
But according to an investigation published on Wednesday by Hanna Homestead of the National Priorities Project, in collaboration with The Intercept, deploying the National Guard and "getting rid of the slums" is costing far more than it would cost to simply provide housing to every homeless person in the city.
Governors from six US states have sent troops to Washington to help Trump's effort, swelling the ranks to nearly 2,100 who will soon be on patrol.
According to previous reporting, National Guard deployments cost the US government $530 per guard member each day. Using that figure, Homestead estimated that it would cost just over $1.1 million.
She added that "the number of troops will likely continue to grow. And with no deadline for the DC deployment, those costs could add up for months or even years."
According to the most recent data from the Department of Housing and Urban Development (HUD), there are about 5,600 people experiencing either sheltered and unsheltered homelessness in DC on a given night. Operating an affordable housing unit for each one of them, the data shows, costs about $45.44 per person, per day, on average in DC.
Providing affordable housing to every homeless person in DC would cost an estimated $255,166, which is 4.3 times less than the cost of Trump's military deployment.
"Taxpayers like you and me bear the cost of this cruel power grab," Homestead said. "This militarized spending comes at the expense of federal programs—like public housing—that actually do prevent crime and improve health and education outcomes."
Last week, White House Press Secretary Karoline Leavitt told reporters that over 70 encampments had been cleared since Trump's order to federalize the police. She also said that over 600 people had been arrested, though it was not specified how many of them were homeless.
Trump has sought to conflate homelessness with criminality, suggesting that the nation's capital had been "overtaken by violent gangs and bloodthirsty criminals, roving mobs of wild youth, drugged-out maniacs, and homeless people."
While his solution has been a show of military force against people with nowhere to go, a large body of research suggests that the approach of providing "Housing First"—meaning a stable place to stay with no preconditions for sobriety or treatment—reduces crime.
A 2021 study from UCLA found that providing homeless people with targeted housing assistance reduced the probability of committing a crime by 80%.
"Arresting or ticketing people for sleeping outside makes homelessness worse, wastes taxpayer money, and simply does not work," said Jesse Rabinowitz of the National Homelessness Law Center. "The solution to homelessness is housing and supports, not handcuffs and jails."
But in addition to a crackdown on the homeless, the Trump administration is also pushing to eliminate funds for public housing. The White House's proposed budget for fiscal year 2026 slashes funding for HUD's Continuum of Care program, which provided cities with funding for initiatives to house the homeless.
According to the National Alliance to End Homelessness, the proposal would effectively end funding of permanent supportive housing for 170,000 residents and potentially increase the number of homeless people in the US by 36%.
"Arresting people for no reason other than the fact that they have no home is inhumane and unjust," said Amber W. Harding, executive director of the Washington Legal Clinic for the Homeless. "It is particularly cruel to do so knowing that federal and local housing programs have been slashed and that DC does not have enough shelter beds."
"Fines, arrests, and encampment evictions make homelessness worse, further traumatize our homeless neighbors while disconnecting them from community and support," said Dana White, Director of Advocacy at Miriam's Kitchen, a DC-based homeless services organization. "If policing resolved homelessness, we wouldn't have homelessness here in DC or anywhere else in this country."
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