The housing and economic development. Congress established the Gulf Opportunity Zone Act of 2005 to provide tax incentives to individuals and businesses in certain presidentially declared disaster areas. In contrast with grant programs, where funds come directly from the government, GO Zone incentives provide investors with relief from certain tax liabilities. Affordable housing challenges existed for both homeowners and renters in Louisiana and renters in Mississippi before the 2005 Gulf Coast hurricanes, particularly in the areas most damaged by these storms. According to HUD, the generally accepted definition of “affordable” is for a household to pay no more than 30 percent of its income on housing. Families who pay more than 30 percent of their annual income for housing are considered cost burdened. Like renters nationwide, renters in Louisiana and Mississippi were generally more cost burdened prior to Hurricanes Katrina and Rita than homeowners. For example, according to the 2004 American Community Survey, for the areas most damaged by the hurricanes, in the New Orleans metropolitan area (St. Charles, Orleans, St. Tammany, St. Bernard, and Plaquemines parishes) 48 percent of renters and 24 percent of homeowners spent 30 percent or more of their income on housing costs, compared with 50 percent of renters and 21 percent of homeowners statewide.

In the Gulfport-Biloxi-Pascagoula metropolitan area in Mississippi—which includes Hancock, Harrison, and Jackson counties—48 percent of renters and 21 percent of homeowners spent 30 percent or more of their income on housing costs compared to 50 percent of the renters and 24 percent of homeowners statewide. Hurricanes Katrina and Rita increased the need for affordable housing in both Louisiana and Mississippi. For example, of the 82,000 rental units that were damaged or destroyed in Louisiana, about 54,000 were affordable to individuals earning less than 80 percent of the area median income, according to state officials. Similarly, in Mississippi nearly one-fourth of the 25,000 affordable rental units in three Mississippi coastal counties were damaged, with Hancock and Harrison counties sustaining the most damage to their affordable rental housing stock.