Black and Still Underwater After Katrina

“Bring a map of New Orleans.” That was all that Alden J. McDonald Jr., president and chief executive of Liberty Bank and Trust Company, said when I first asked to meet him. It was the summer of 2005, less than two weeks after the city’s flood-protection system failed to keep out the storm surge created by Hurricane Katrina, and I was reporting in Louisiana for this newspaper. The Gulf of Mexico was sitting in the lobby of his New Orleans headquarters. The flood had destroyed Liberty’s mainframe computer; a good many of the bank’s most essential documents — deeds for houses, titles for cars — were ruined as well. Six of Liberty’s eight branches were flooded and a seventh had been battered by looters. The bank’s central operations had to be moved to a branch office in Baton Rouge, 70 miles away.

McDonald started Liberty, one of the Deep South’s first black-owned banks, 33 years earlier. He was 29 then and a college dropout, but by the time of the flooding, the bank ranked as the country’s sixth-largest black-owned bank, with more than $350 million in assets, and he was chairman of the city’s Chamber of Commerce. Yet as we sat in a windowless conference room in Baton Rouge, he said that he wasn’t certain Liberty would survive long enough to celebrate its 34th anniversary. That’s when he asked me to take out the map I had brought.

McDonald picked up a black marker and drew a line down its middle. He pointed to the western half. ”That’s the New Orleans you know,” he told me: the French Quarter, the Superdome, the Warehouse District, the Garden District, St. Charles Avenue. Those areas had largely remained dry. Then he pointed to the eastern half of the map. ”Where you saw water up to the rooftops?” he said. ”That’s where most of the city’s black people lived. That’s where my customer base lived. My employees lived out there.” McDonald, who was only a couple of weeks from turning 62, shook his head and gave a rueful laugh. ”Hell, that’s where I lived.”

What McDonald saw on the map scared him, and over the next five years, many of his fears were borne out. New Orleans would become home to a greater concentration of neglected properties than any city in the United States, Detroit included. One in every four residential properties across the city, more than 50,000 addresses, was categorized as blighted or vacant. The city had a population of 455,000 before the storm, two-thirds of whom were black; by 2010 there were 24,000 fewer whites and 118,000 fewer blacks. That year, the city elected its first white mayor in 32 years. A 5-2 white supermajority controlled the City Council, which had been majority black before the storm. Orleans Parish had a white district attorney; its Police Department, a white chief. White-majority boards ran most of the city’s schools and the housing authority. ”The perception among most African-Americans,” Lance Hill, executive director of Tulane University’s Southern Institute for Education and Research, said in 2012, ”is that they are living politically as a defeated group in their own city.”

Today, however, the city’s official mood is triumphant. The current mayor, Mitch Landrieu, declared during his annual State of the City address in May that New Orleans was ”no longer recovering, no longer rebuilding.” Indeed, according to him and others, the city is in far better shape now than it was before the storm. ”One of the greatest urban revivals of our lifetime,” in the words of Michael Hecht, who heads the economic-development nonprofit Greater New Orleans, Inc. The city’s three-month toast to itself — a pageant of conferences and ceremonies called Katrina 10: Resilient New Orleans — does include a somber moment of remembrance on Aug. 29 to mark the beginning of the flood and the roughly 1,800 people who died over the next few days. But for City Hall, Katrina 10 is a celebration of the New Orleans miracle and the lessons it can teach the rest of the country.

To Landrieu, Katrina is also about commemorating racial harmony. To make his point, the mayor likes to mention a picture he remembers seeing from that week when nearly 50,000 people were trapped in the city: a black girl holding hands with a white woman in a wheelchair. In this version of the Katrina story, nature’s wrath was an equal-opportunity storm. It didn’t matter whether you were rich or poor, black or white: If you lived in a low-lying part of the city, including Lakeview, a prosperous white community — one of the very few low-lying neighborhoods in the western half of the city — when Katrina struck, your neighborhood and your house flooded. Small groups of dedicated souls were heroes. ”We decided we were not going to wait for government,” says Jeb Bruneau, who was president of the Lakeview Civic Improvement Association at the time. ”We weren’t waiting for a handout like other communities.”

You could say Alden McDonald triumphed over adversity, too. Today he runs the country’s third-largest black-owned bank, according to the Federal Reserve. But despite his personal success, McDonald is still focused on the eastern half of that map that he marked up at our first meeting. There, the recovery is far from complete — and in some areas things are worse than before the storm. In this frustration, he represents what might be called the black Katrina narrative, a counterpoint to the jubilant accounts of Landrieu and other New Orleans boosters. This version of the story begins by noting that an African-American homeowner was more than three times more likely than a white one to live in a flooded part of town. Where Landrieu sees black and white coming together, many African-Americans recollect a different New Orleans: rifle-carrying sheriffs and police officers barricading a bridge out of an overwhelmed city because they didn’t want the largely black crowds walking through their predominantly white suburbs; a white congressman overheard saying that God had finally accomplished what others couldn’t by clearing out public housing; a prominent resident from the Uptown part of the city telling a Wall Street Journal reporter that in rebuilding, things would be ”done in a completely different way, demographically, geographically and politically” — or he and his friends weren’t moving back.

 

Now there are still 100,000 fewer black residents living in New Orleans than at the time of Katrina. McDonald estimates that one-third of his friends have not returned, because their homes were destroyed. ”I still have family members stuck in Houston, some cousins,” McDonald says. ”They’re terribly homesick.” Only about 80 percent of the residents of New Orleans East, where a good portion of the city’s African-American middle class as well as a large share of the city’s black elite lived, have returned. In the Seventh Ward, he says, where he grew up, only about half of the homes are restored a decade after Katrina. ”There was never a plan to bring people back home,” he says. ”There was never a plan of any kind.

The Seventh Ward, for most of McDonald’s life, has been a working-class enclave filled with the city’s barbers, waiters and factory workers. McDonald grew up in a two-bedroom shotgun house that needed to accommodate a family of seven, and at times McDonald’s grandparents, who lived with the family on and off throughout much of his childhood, or the stray friend one of his sisters occasionally brought home.

McDonald’s parents slept in the front bedroom. The back bedroom had a pair of bunk beds for McDonald, the oldest of five siblings, and his two brothers. There was also a pullout couch for the grandparents. His two sisters slept on another sofa bed in the living room. When the whole family was there, nine people shared a single bathroom. ”We came up hard,” the family’s middle son, Byron, says.

McDonald’s father worked at the Boston Club, an exclusive whites-only redoubt at the time, whose sole identifying sign outside was a B etched on its frosted-glass door on Canal Street. During a 52-year career, Alden McDonald Sr. rose to the position of headwaiter. He worked lunch, the cocktail hour and dinner and often stayed late for the private parties, including for Rex, the secretive Mardi Gras krewe made up of members of the city’s white upper class. His father was highly regarded, McDonald said, but he never made more than $15,000 a year including tips, and the job had neither health insurance nor retirement benefits. Anyone in the family who fell sick saw a doctor at Charity Hospital.

McDonald’s mother, Celestine, devised any number of ways to bring extra money into the house. She sold burial insurance to neighbors and hired herself out as a kind of community taxi service in the family station wagon and later in a van she bought to accommodate her growing business, carting old people around on their errands; she added extra pickups in the morning when taking her own children to school. She made and sold pickles and candy and, in the warmer months, sold a frozen sugary concoction the kids called huckabuck.

A couple of McDonald’s uncles were bricklayers with their own company. By the time they were 10 or 11, the McDonald boys worked ”the pile,” as Byron put it, cleaning and sorting bricks, mixing mortar, dragging cinder blocks. All three of them also helped their father when he worked weekend parties at the houses of wealthy whites. But the eldest son, Alden, stood apart as an entrepreneur. One Christmas, he persuaded his younger siblings to agree to accept a movie projector as their sole gift that year. He draped a white sheet over a clothesline in the empty lot next door, charged kids a nickel to enter and sold popcorn and lemonade at a concession stand he set up. He split the take with his siblings, who, as co-owners of the projector, were his business partners. ”He always took care of us that way,” Byron says. ”He was a good older brother.”

McDonald assumed he would be a bricklayer after high school. His uncles had done well for themselves in that line of work; another bricklayer was among the first in the neighborhood to have a television. At his parents’ behest, though, he gave college a try, matriculating first at Xavier University, a historically black college near the center of town, and then Loyola, across the street from Tulane in Uptown New Orleans. But he and a childhood friend worked as exterminators right after graduating from high school, and that consumed ever more of his time. ”I was always more interested in making money than books,” McDonald says. After only a few semesters, he dropped out of Loyola and signed up to study accounting and other more practical skills at a local trade school.

His father’s Boston Club connections led to his big break. Working at a private party Uptown, the senior McDonald was approached by a guest who was starting a new bank in town. The man sought to hire several industrious young black men or women, which is how the 23-year-old McDonald became, in 1966, one of the first black bankers in New Orleans history. By 28, he was a vice president, sent by his bosses to help right underperforming departments. He was a black man working in a pedigreed, almost all-white industry, but the bank’s president, McDonald says, made sure he never had a problem. ”He’d call a department head into his office and say: ‘Alden is being brought in to clean up. So whatever he tells you to do, you’ll do.’ ”

When McDonald was 29, shortly after he started dating Rhesa Ortique, a public-school teacher who would soon become his wife, a group of white and black investors put up $2 million to start the city’s first minority-owned bank. Norman Francis, the president of Xavier University and the chairman of the group, asked McDonald to run the start-up. He said no. ”I think Alden was genuinely scared that he wasn’t ready,” says Rhesa, whose mother also taught in the New Orleans schools and whose father was Louisiana’s first black State Supreme Court justice. Francis tried again. ”You can be part of history, Alden,” he told him. Again McDonald said no. He said yes the third time only because Francis practically made it sound as if the future of black New Orleans depended on him. Thirty days before opening its doors, in 1972, Liberty named Alden J. McDonald Jr. its president.

Its first branch was a trailer set up on an empty lot in a run-down part of town a few minutes from the central business district. ”This bank represents freedom of our community,” McDonald said when it was his turn to talk at the bank’s opening ceremony. ”A light shining the way for a better New Orleans.” They would accelerate black homeownership, McDonald and other speakers said, and provide the essential seed funding to would-be shopkeepers, restaurant owners and other entrepreneurs in the black community. Two thousand people opened accounts at Liberty that first day. ”Liberty would become this test of black consciousness in the community,” says Jacques Morial, the son of Ernest Morial, an original Liberty investor and the city’s first black mayor, and the brother of Marc Morial, the city’s third black mayor.

But mortgages and commercial loans would have to wait at a bank with only $2 million in cash. Instead, McDonald started where he knew the need was great: fairly priced consumer loans for things like refrigerators, bedroom sets and home repairs. Because there were so few banks in black neighborhoods, so-called hard moneylenders like Household Finance and Beneficial could charge annual interest rates around 18 percent on loans. McDonald said he believed that he could offer cheaper loans and still be profitable by creating a loan process that depended on more than just credit scores. ”We want to hear that person’s story and judge eye to eye if we think they’re going to pay us back,” McDonald says. He offered consumer loans at around 6 percent to the same working-class families who had been going to Household Finance and Beneficial.

Once a week, the staff stayed late to work on delinquent accounts. ”Even if someone is willing to pay you just $10 or $20 a month, that shows a commitment,” McDonald told his staff. That’s not to say McDonald was a soft touch. One evening a customer told McDonald on the phone that he had no intention of paying his car loan and then hung up. McDonald had one of his employees call the New Orleans police officer they kept on retainer for repossessions and then rode with him and an employee, Ronnie Burns, in search of the car. ”It’s like midnight when we find it,” recalls Burns, who today sits on Liberty’s board of directors. The off-duty cop jumped out brandishing a shotgun while another Liberty employee jimmied his way into the customer’s car and drove it back to Liberty. ”I’d go along just to make sure no one does something stupid,” McDonald says, but Burns says he thinks McDonald was, perhaps, also out for a bit of justice. ”Alden worked hard each and every day,” Burns says, ”and he expected the people we did business with to do the same.”

Most of Liberty’s customers lived in New Orleans East. The area had been swampland before developers realized its moneymaking potential in the 1960s and started draining it to make room for tracts of homes. Its first residents were mainly white, but McDonald was among those African-Americans who began moving to the area at the start of the 1970s. New Orleans East flourished. A reporter for The New Orleans States-Item, the city’s now-defunct afternoon paper, wrote in 1979 about a ”unique, racially integrated enclave of middle-class homes … almost unnoticed by the rest of the city.”

Eventually, other banks opened in the eastern half of the city. But Liberty still played a vital role for customers who did not feel welcomed by a mainstream lender. ”Before Alden McDonald, it was hard to even get a conversation with a banker,” says Leah Chase, the chef and co-owner of Dooky Chase’s. In 1982, she says, she borrowed around $120,000 from Liberty to expand; her restaurant has since hosted Presidents George W. Bush and Barack Obama.

When oil prices crashed in the mid-1980s, many of those who worked on the oil rigs off the Louisiana coast were affected. People lost jobs, homes were taken through foreclosure and banks around the state went out of business. Liberty posted its first-ever loss in 1987, and then its second and third in 1988 and 1989. Yet McDonald also saw opportunity in hard economic times. The steep fall in home prices made it possible for a wider range of people who still had jobs to afford the monthly payment on a home loan. But many of them did not make enough to be able save up for a down payment, so Liberty offered to make loans for down payments at as low as 3 percent. ”Alden would scare me sometimes, but he understood the need for us to take risks more than I did,” Francis says. ”Not willy-nilly risks, but the risks that would let the bank serve its core function helping the black community grow.” Liberty’s program proved so effective at increasing black homeownership that officials from Fannie Mae, the government-backed mortgage company, brought McDonald to Washington so they could learn from his experience.

Over the next decade, New Orleans East started to change. When the ratio of black-to-white households in a subdivision hit roughly 50-50, McDonald and others say, the white residents started to move away. There still remained black lawyers and accountants and junior executives commuting each morning to downtown office towers, but by the late 1990s, the East was a black community, and a prosperous African-American community is not always perceived the same way as a prosperous white one. The Plaza, the area’s upscale mall, became a dumping ground for clothes and other merchandise department stores couldn’t sell at their other outlets. Landlords started renting units to federally subsidized, low-income Section 8 tenants. Check cashers, payday lenders and dollar stores followed. The nice wine shop shut its doors. Eventually, an area with nearly 100,000 residents was without a single white-tablecloth restaurant. ”No one would invest out here,” McDonald says.

On Wednesday nights in the early 2000s, local residents gathered in a Liberty Bank conference room to talk about fighting back against the decline. McDonald thought his role would be that of host, but he often ended up playing ambassador. He would meet with businesses to try to attract them to the East, armed with a study funded by the bank showing that there was more discretionary income in the East than any place outside Uptown. (Another Liberty-funded study revealed the challenge he faced: The area was home to 40 percent of the city’s Section 8 housing.) ”We were very close to getting some national restaurants out there,” McDonald says. ”Then Katrina hit.”

McDonald escaped to Atlanta ahead of Hurricane Katrina. It was there, at the home of family friends, that he saw the first images of New Orleans after the levees failed — people stranded on rooftops and elevated highways, entire neighborhoods under water. The news didn’t mention New Orleans East, but the longer McDonald watched, the more he felt his business was doomed. Liberty had lent tens of millions of dollars to homeowners and entrepreneurs in the East, and now their properties were probably sitting in four to six feet of water, if not more.

”I’m wiped out,” McDonald told himself.

Two days after New Orleans started to flood, McDonald flew from Atlanta to the modest bank branch in Baton Rouge where crucial personnel had long planned to meet in the event of a disaster. The bank’s loan department now consisted of two people sitting in mismatched chairs at a folding table. Next to them sat another person assigned to figure out which Liberty borrowers carried flood insurance and which did not. McDonald himself worked at a small table in the conference room. He was a man in perpet­ual motion, bouncing among the main room, the branch lobby and his own office. He had two cellphones, and it was not uncommon for one to ring while he was already talking on the other.

Regulators working for the Federal Deposit Insurance Corporation were constantly checking on Liberty, asking about its reserves and its recovery plans. State banking officials were also a presence in those early months. ”Regulators were worried about the whole system in New Orleans collapsing,” McDonald told me. ”But I think it’s fair to say they were more worried about me than anyone else.”

Right after the flooding, McDonald imposed a $100 daily limit on all A.T.M. withdrawals. Until Liberty was reconnected to the global banking network, he and his colleagues could have no idea how much money each customer had in his or her account. But imagining his customers camping out in hotels around the country, racking up expenses, he increased the daily maximum withdrawal to $500 and hoped they had the money to cover the withdrawn cash. He was intent on playing Jimmy Stewart’s George Bailey in ”It’s a Wonderful Life” and not Lionel Barrymore’s Mr. Potter. ”A banker is someone who gives you an umbrella when the sun is shining and takes it away when it starts to rain,” McDonald says, repeating an unflattering adage about his profession. ”We try not be that banker.” That decision cost Liberty roughly $1 million in payouts to people who didn’t have the money to cover their withdrawals.

That was small compared with the bank’s other losses. McDonald offered a four-month, no-questions-asked grace period on any loan for a home, business or auto in a flooded area. (Fannie Mae advised banks to offer moratoriums of ”up to three months.”) That represented millions of dollars in checks the bank wouldn’t be cashing in the weeks ahead. And once Jan. 1, 2006, came, then what? Eighty percent of his customers lived in the flood zone. Could he expect most people to resume payments on homes, cars and businesses that had been destroyed by water? Liberty deferred interest charges on credit-card balances, which meant more lost revenue, and for months they didn’t collect loan fees, late charges or other payments that banks levy to boost profits on loans. ”Everywhere I look,” McDonald said six weeks after the storm, ”I’m losing money.”

Liberty had to contend with the damage to its own banks as well. It hired an outside crew to gut and clean its water-damaged properties, but the job of sifting through waterlogged file cabinets, folder by folder, looking for any surviving paperwork, fell to bank employees wearing protective gear. Good news came one day when the mortgage department announced that only seven homeowners living in the flood zone had allowed their flood insurance to lapse before the hurricane. The Liberty staff cheered, but McDonald reminded them, ”Now the question will be, did they have enough coverage?” He instructed his staff to request copies of the insurance policies their customers carried and then coach property owners on what they needed to say to their insurers. If the initial offer from an insurer was too low, someone from the bank would walk a loan customer through the appeals process. The bigger the settlement check, the less likely the bank would take a loss on a loan.

But every day, longtime customers were closing accounts because they were now living nowhere close to a Liberty A.T.M. McDonald anticipated losing thousands more. He began showing up at conferences and other events that focused on socially responsible investments to try and raise money for the bank. ”He was everywhere afterward, pushing Liberty as the community bank in New Orleans in the middle of this disaster,” says William Michael Cunningham, a black economist and the founder of Creative Investment Research, who had been attending such gatherings for decades. McDonald was promoting new certificates of deposit he called Katrina Investment Deposits, or KIDs. These were C.D.s offering a below-market interest rate that promised to help out a cash-starved bank; they raised $10 million. Liberty used the money to make loans without down payments available to homeowners seeking to rebuild.

McDonald approached Walmart and other big-box retailers to discuss putting banking centers in their stores and considered opening loan centers in strip malls — storefronts that would make the kind of small-denomination loans that were Liberty’s specialty at its inception. He also considered expanding into other parts of Louisiana, Texas and Mississippi. ”If we were going to survive,” says Ronnie Burns, the Liberty board member, ”Alden was going to have to rebuild this thing brick by brick.”

Seven months after Katrina, as McDonald drove me around his New Orleans in a tan minivan, the East was still barren. A new federal program called Road Home had just been announced. Publicized as the largest housing-recovery program in the country’s history — it would eventually grow to more than $10 billion — it promised to pay out as much as $150,000 to homeowners who had flood damage, depending on the size of their losses.

But McDonald had already diagnosed Road Home’s racial bias: Compensation would be based not on the actual cost of rebuilding, but on the appraised value of a property. The cost of restoring a 2,000-square-foot house in mostly white Lake­view, just west of City Park, or Gentilly, a black middle-class neighborhood to its east, would be the same — but the Road Home payment would differ. In Lakeview, that home was valued at a little over $300,000. A Lakeview couple who received a $150,000 flood insurance payment would receive the full $150,000 from Road Home. But in Gentilly, a similar home was valued at closer to $160,000. If a Gentilly couple received a flood insurance check of $150,000, they would receive only $10,000 from Road Home. It wasn’t just the poor, McDonald understood early on, who would have trouble rebuilding, but also middle-class people who didn’t have the savings or family wealth to make up the shortfall and fix their homes.

”If we use pre-Katrina assessments for compensating people, nobody in the black community is coming out anywhere near whole,” McDonald said at the time. By the time a federal judge reached the same conclusion, nearly five years later, it would be largely too late. All but $148 million of the original $10 billion had already been spent. (The federal government agreed to set aside another $500 million specifically to help homeowners shortchanged by Road Home.)

McDonald was also frustrated by the response to a 17-member panel he sat on created by Mayor Ray Nagin shortly after Katrina to develop a plan for rebuilding the city. In addition, dozens of out-of-town experts descended on New Orleans 10 weeks after Katrina to help. McDonald ”holed up in a hotel room with all these brilliant minds,” he recalls, to discuss an idea he had for resurrecting Pontchartrain Park, a once-grand middle-class black community devastated by the flooding. The residents of Pontchartrain Park tended to be older African-Americans. What if the city used a small share of its redevelopment dollars to build a senior center there and attract a dialysis center, a grocery store within walking distance and other amenities appealing to older people? Many still would be unable to return, but McDonald, working with planners and other experts, devised a land bank that would allow someone in another part of the city to swap a ruined home for a similar-size renovated house in Pontchartrain, in that way providing an incentive for people to cluster together and recreate a community. That idea, along with others, was submitted to the mayor. But another member of the panel recommended that the city temporarily ban rebuilding in its lowest-lying parts while officials made up their minds about whether to reinvest in neighborhoods that were in harm’s way. This idea infuriated those eager to start work on their homes. Nagin, with an election only a few months off, did not want to step into this controversy and simply thanked his commission for its hard work and then ignored its suggestions, as if every proposal were tainted by the proposed temporary ban.

McDonald himself was still undecided about moving back to the East. He split time between his family in Baton Rouge and an R.V. he had bought and parked behind his restored New Orleans headquarters. Three years passed before the McDonalds came back to the city; they would be among the first of their friends to do so.

Brick by brick, McDonald began rebuilding his bank. He hired consultants to teach him how to take advantage of federal programs that gave big tax breaks on investments in low- and moderate-income communities. He had fewer customers in New Orleans now, so he needed to look outside the city to replace lost business. The bank bought mortgage companies in Baton Rouge and Houston and purchased land in Jackson, Miss., to build a branch there.

The subprime-mortgage crisis hit a few years after Katrina. But this blow to the global banking system proved another opportunity for McDonald and Liberty. It had subprime customers — those with low credit scores — but, McDonald said, ”we were always careful to put them into loans they could afford.” By 2008, when much larger institutions needed bailouts, Liberty was turning a profit. Those same regulators who after Katrina were worried about Liberty now came to McDonald as a potential buyer for other troubled black-owned banks, including one with three branches in Kansas City, Mo. McDonald bought that bank, along with others in Chicago and Detroit. By 2010, Liberty was operating 24 branches in six states.

Since then, Liberty has acquired other distressed black-owned banks in Chicago and Alabama. McDonald now finds himself confronting a new, enviable worry: slowing down the pace of growth so that his bank doesn’t cross the $1 billion threshold. If it does, it would have to submit to more rigorous regulatory exams. ”I’m too old for that,” he says. At the same time, he has watched enviously as the big chains and other businesses flocked to Lakeview, but not New Orleans East and certainly not the more modest parts of black New Orleans. In 2011, The Times-Picayune ran an article about the revitalization of Lakeview and noted the lack of commercial vacancies there. At the time, McDonald pointed out a trio of strip malls on or around Lake Forest Boulevard, near his office. ”All of them 100 percent occupied pre-Katrina,” he said. All three were now vacant. McDonald worked to rebuild the eastern half of the city. But wherever he looked, it cost much more to rebuild a house than what the house was worth. The bank created a $20 million loan fund, which Liberty called its Gentilly Homeowner Initiative. One early applicant, McDonald told me, was a family of four confined to a couple of rooms because they needed another $80,000 to finish fixing the rest of their house. Both parents worked service-industry jobs and didn’t make enough to justify a loan half that size. Acting more as a social worker than banker, a Liberty loan agent linked them to a nonprofit that could supply free labor and then wrote them a loan for the cost of materials.

Yet there is only so much a single for-profit entity can do. In recent years, Liberty tried making loans in the Lower Ninth Ward. McDonald’s employees needed to be just as hands-on there. Contractor fraud was rampant then, especially in lower-income communities, and Liberty’s staff, as it did elsewhere in the city, would offer lists of recommended contractors and monitor their progress to make sure the work was being done. But only a small fraction of potential borrowers qualified for even a modest loan — before Katrina, the typical resident of that neighborhood had been living on $16,000. Ten years after Katrina, only 36 percent of the Lower Ninth Ward’s population has returned, according to the New Orleans Data Center.

Today the New Orleans City Council is again majority black. The city again has a black police chief. McDonald is wealthy. All three of his children are grown up and accomplished. He’s a grandfather several times over. Yet he’s thriving despite New Orleans, not because of it. His life’s mission has been to improve black New Orleans, but his outlook on his half of the city is gloomy, McDonald told me in the winter, as we sat in the boardroom on the top floor of Liberty’s six-story headquarters. Rents have soared since Katrina; home prices in some historically black neighborhoods have doubled — because of gentrification, because of lack of supply and because of the high cost of building — pricing out those black families who still harbored hopes of returning home. Property taxes have doubled, too, and flood-insurance rates have tripled. Water bills will more than double by 2020 to pay for much-needed repairs to the city’s water and sewer system. Meanwhile, many of New Orleans’s service employees are still earning close to minimum wage.

The walls of Liberty’s boardroom were decorated with original artwork by Jacob Lawrence, Elizabeth Catlett and other renowned African-American artists. The views from its high perch were limitless. Yet looking out the window facing east meant staring at a stretch of emptiness that once was the great Plaza mall. While much of New Orleans thrived, McDonald said he saw little hope of a better future for many of his customers. ”The poor will stay poor and the middle class can never get ahead,” he said, revealing a rare flash of anger. He paused and added a phrase I don’t imagine he has used many times in his life: ”And I don’t have the solution.”