There are actually things we could do

Despite the fact that it's currently fashionable to pretend we still live in the 19th Century, modern democratic governments do, in fact, operate with the expectation that they can and should do things to protect the most vulnerable among their constituents from the often uncaring, inequitable ravages of Market Forces. 

The recovery of New Orleans  after the levee failures has been an uneven one. Real estate values and rents have skyrocketed in the "historic" (and better elevated) neighborhoods while the most heavily flooded areas continue to struggle.  The economy has enjoyed a relatively prosperous period thanks to heavy federal investment in rebuilding and in the new medical complex. Yet overall wages remain stagnant and have actually lost ground relative to housing costs.

Much has been made of the "brain gain" influx of young, well-educated entrepreneurs to the area but this is, at best, overstated in importance. At worst, it's.. well, this.

Hype is a key component for any entrepreneurial venture, and it’s been supplied in droves for New Orleans. (It’s telling to note that, at the time she wrote the article, Lopez also ran a public relations firm, Gen Nola, whose clients included a number of hip new startups.) The notion of a formerly insular city rising from the ashes to be reborn as the country’s next great Creative Class success story is too appealing for the media to resist. A running theme in these articles is that that Katrina’s devastation had the welcome side effect of opening up space for new developments. And the city responded in kind — in 2011, the New Orleans Downtown Development District unveiled a promotional campaign that included light-pole banners emblazoned with the slogan: “Welcome to your blank canvas.” Echoing this sentiment, NPR filed a report in 2012 that began, “New Orleans became a blank slate after Hurricane Katrina struck in 2005. And ever since, entrepreneurs have rushed in to experiment with new ideas for building and running a city.”

The NPR piece outraged a number of New Orleans residents for its perceived boosterism of transplants essentially building a profitable playground atop the pain, death, and devastation of tens of thousands of indigenous residents. The concept of a “blank slate,” in fact, is a key component in what Naomi Klein calls “disaster capitalism,” a process repeated throughout the 20th and 21st centuries in which business interests — in collusion with government — exploit crises for their own financial gain and to the detriment of those still reeling from trauma and shock. She targeted the privatization of New Orleans’ school system and other elements of the post-Katrina recovery in her 2007 book The Shock Doctrine: The Rise of Disaster Capitalism.

The good news is there actually are policy tools available to us which might help mitigate some of this.  Imperfect tools, of course, but still there are options.

The preservation and expansion of affordable housing is central to equitable development.  Recognizing the link between appreciating real estate prices and affordable housing needs, cities throughout the country have created housing trust funds to combat gentrification. Housing trust funds support the creation or of affordable housing through fees from commercial development or real estate transfer taxes and can help low- and moderate-income families remain in revitalizing and gentrifying neighborhoods.

Another strategy is to create permanently affordable housing through community land trusts. Community land trusts take real estate off the speculative market and ensure long-term affordability for renters and low-income homeowners.  In New Orleans, the Crescent City Community Land Trust, a two-year old non-profit, is working to create permanently affordable housing by forming land trusts in neighborhoods experiencing escalating property values and a shortage of affordable housing options.

It is not enough to attract new, well-educated residents to the city. We need to increase the low incomes of our current residents.  This entails concerted efforts to attract and grow businesses that pay wages sufficient to support households in the higher cost, post-Katrina environment and workforce development initiatives that connect low-income workers to economic opportunity. Through interventions such as these we can help build strong, economically diverse neighborhoods and help ensure that a broader base of residents benefit from revitalization.

Our current policy is to do practically none of that and instead cheer on the so called entrepreneurial renaissance.  At least we've got some pretty slickly produced methods of cheerleading.