After Katrina, the New Orleans Population Goes Upscale

Five Years After Katrina, Demographic Changes in New Orleans
Five Years After Katrina, Demographic Changes in New Orleans

In the five years since it hit New Orleans, Hurricane Katrina has reshaped the city's population -- and perhaps its financial future as well. The aftermath of the 2005 storm, which took 1,835 lives and caused an estimated $81 billion in property damage, has left the city with an older, wealthier and less diverse population, according to data recently released by the Nielsen company. If its findings are confirmed by the 2010 Census, that information could go a long way in helping the city attract businesses and outside capital to continue rebuilding.

According to Nielsen, New Orleans lost 595,205 people prior to and shortly after Katrina, dropping it from the country's 35th largest market in 2000 to the 49th largest market in 2006. Atlanta, Houston and Dallas received the bulk of Katrina refugees. Now in 2010, New Orleans ranks as the 46th largest market with 1,194,196 persons. Nielsen projects the city will have a population of 1,264,365 in 2015 and will likely remain ranked as the 46th largest market in the U.S.

"The city has become older (the median age rose from 34 to 38.8), less diverse (the white non-Hispanic population increased from 25.8% to 30.9%) and a bit wealthier (median income rose from $31,369 to $39,530)," says the Nielsen report. The challenge now for New Orleans is to find ways to use some of these changes to help attract the developers and corporations who could help the city rebound.

No Surprise: Having Money Made It Easier to Rebuild

The numbers suggest that older, more financially stable residents were able to weather the storm, rebuild their lives and return to the city in greater numbers than other population segments. African Americans, many of whom lived in the lower-lying eastern parts of the city, were particularly hit hard by the storm, and large numbers of them were unable to obtain insurance settlements quickly enough to allow them to rebuild.

"People needed money in the bank to start rebuilding their homes, and the neighborhoods that came back the fastest were the affluent ones," notes Allison Plyer of the Greater New Orleans Community Data Center. "Those in poverty tended to be renters, and there was little assistance for rebuilding rental properties."

The report also shows a higher percentage of younger, upper-middle income renters in the city today: That demographic grew by 31% from 2005 to 2009. Michael Mancini, Nielsen vice president of data product management and author of the report, says growth among this segment of the population could mean that more younger people with higher incomes have come into New Orleans, or that older people with less money left and did not come back, raising the percentage of younger, upscale residents overall.

"It's probably some combination of both," he said.

Young People Make a City More Attractive to Business

Data suggesting an influx of younger, upscale persons to New Orleans could mean positive things for the city's ability to market itself to major businesses in the future. Mancini said Nielsen's data helped convince General Growth Properties (GGP) to rebuild a shopping center in the city and is helping it attract retailers to come back to the shopping center as well.

He also said the 2010 Census data will be even more important to New Orleans, because it will provide key characteristics of individuals -- information corporations covet when targeting their products and services to a specific community.

"American business is very tied to data like this," said Mancini, noting that corporations use census and demographic data to make key decisions, such as locating in a city. He also points out that New Orleans can also use the data to highlight positive demographic data that can help them find "a mix of financial and development incentives to convince private interests to come in and rebuild sections of the city."

Such a successful effort would go a long way to rebuilding the city's financial strength as well.