New Orleans after Katrina: A tale of two cities

There are still reminders of Katrina. The high water line is immortalized at Starbucks. But Lakeview is back. A supermarket opened in 2010. The St. Paul's Homecoming Center has moved on, and Connie Uddo now heads a group replanting the 65,000 trees Katrina killed around New Orleans.

In New Orleans, happy or sad, you dance to the music. And yesterday, on the actual anniversary of Katrina, people danced in the Lower Ninth Ward, where the most damage was done.

Almost entirely African American before the storm, only 37 percent of its pre-Katrina residents have returned. Brad Pitt's Make It Right and other charities have built hundreds of homes, but thousands were destroyed. The closest thing to a grocery store opened last year.

Someone else's roof was on top of Betty Bell's house when the retired social worker finally was allowed back for a look a month after Katrina. The city demolished it.

Why, after ten years, there's nothing but a slab here explains a lot about why the Lower Ninth Ward remains an urban wilderness.

A view of the Lower Ninth Ward. CBS News

"You know, I just try to be strong and not let it really affect me too much, 'cause I don't wanna run my blood sugar up," Bell said.

Her insurance settlement nowhere nearly enough to rebuild -- the bank took most of it to pay off her mortgage, anyway.

Construction is about to start on Bell's lot, but it's taken 10 years of fighting -- and the intervention of a local advocacy group -- to get her barely enough money for a house one-third the size of her old one.

"It's not what I had, but at least I'm getting something," she said. "And it took a long time to get to this point."

For Bell, the problem was Road Home, Louisiana's nearly $10 billion federally-funded program intended to bridge the gap, to provide homeowners enough money to rebuild. For many, many Katrina victims, it ended up a bureaucratic nightmare -- a symbol of incompetence.

But for residents of African-American neighborhoods, such as the Lower Ninth Ward, it was a symbol of something else: discrimination.

Road Home based its payment formula on the value of a property before Katrina. In New Orleans, historically, homes in African-American neighborhoods have been valued significantly lower than similar homes in white neighborhoods.

Never mind that construction costs are the same regardless.

The appraisal of homes was essentially based on race, said Rivlin: "It was just a fundamental flaw in the program. A federal judge ended up concluding that the Road Home did, in fact, discriminate against black homeowners."

"It's not that they were not made aware that it was not a good policy," said Alden McDonald, who heads Liberty Bank and Trust Co.. "Myself and others personally appealed to the powers-that-be to not use that policy."