"We're running out of time on individuals deciding whether to move back, when to move back ... and whether they're comfortable they have the resources to move back," Mayor Ray Nagin told the House Financial Services Committee.
"As we think about the redevelopment of New Orleans — a city of haves and have nots — we need to create an instrument to maintain home ownership in areas we need the most," he said, referring to numerous blighted areas.
The House committee is reviewing a bill to help property owners in areas of Louisiana hit by Katrina avoid massive defaults on home and business loans while working to rebuild communities.
The bill would create a federal entity, a Louisiana Recovery Corporation, that would purchase the property of willing sellers and pay off lenders through bond sales. Former owners would have first right to repurchase the lots after they've been restored.
Nagin said the bill would provide for restoration of blighted areas to benefit New Orleans residents, two-thirds of whom are poor and black. Since the Aug. 29 storm, the nearly 100,000 residents who returned have been mostly white and middle class.
Rep. Maxine Waters, D-Calif., expressed concern about the impact of rebuilding efforts on the racial makeup of New Orleans. She cited news reports indicating that Nagin met with business leaders to discuss how to reduce the number of poor black residents.
Nagin, who is black, acknowledged some leaders had that sentiment, but said his focus was improving the overall economic situation for the city's residents.
"If we want to talk about getting back to the New Orleans of 1812, I'm not interested," Nagin said, pointing instead to a vision of New Orleans of 2012, "akin to Chicago and Atlanta," with more equity and fair economic opportunities.
Rep. Richard H. Baker, R-La., the author of the bill, said the legislation was needed soon to avoid mortgage foreclosure notices on up to 100,000 homes as early as January.
"We have to rebuild the community," he said.