( CNN ) -- Five years ago this month , Katrina hit New Orleans . What it created is a tale of two cities , the haves vs. the have-nots . Enormous progress in the city 's Business District overshadows the lingering blight in the 9th Ward and St. Bernard Parish , where folks are still struggling to rebuild and many lots remain empty . Unfortunately , Katrina attacked the two poorest states in America , Mississippi and Louisiana . It destroyed or disrupted the economic engines of both states : their tourism , shipbuilding , fisheries , port operations industries and petroleum production in the Gulf . Katrina left about 1,836 people dead , destroyed about 275,000 homes in Mississippi , Alabama and Louisiana , and cost the federal government about $ 114 billion . But there is good news . Post-Katrina tax incentives have had a dramatic impact . The region has more hotels and restaurants than it had before the hurricane , and its major infrastructure -- sewer , water , public service buildings , police and fire departments , National Guard -- has new or rebuilt buildings . Federal money has transformed the schools in New Orleans , reorganizing them into charter schools , which are a far cry from pre-Katrina 's dysfunctional schools operating in dilapidated buildings . Public health in New Orleans before Katrina meant treatment in run-down , understaffed public hospitals . Chief of those was Charity Hospital , known as `` Big Charity , '' the state-run teaching hospital for Louisiana State University Medical School . But it is no more . The Veterans Hospital , next to Big Charity , was also destroyed during Katrina . Afterward , much discussion revolved around whether to repair or replace Big Charity . The Federal Emergency Management Agency insisted on providing only repair money versus money to replace Charity with a hospital that could share a campus with a new Veterans Hospital . It took four years to get a FEMA decision on helping to pay for replacing Charity , yet during this period of indecision , the city and state public health systems built community-based clinics . This is a 21st-century medical system far superior to pre-Katrina hospital-based public health . New Orleans ' levee and water control systems have been steadily improved by upgrading pumps with backup generators . Gates have been installed at critical canals to help block water from entering the city during storm surges . About 325 miles of levees are around the city and surrounding parish , and work on the levees continues . But seemingly intractable problems that affect the poorest residents still beset the city . Two years ago , during Hurricane Gustav , water was splashing over the levee protecting the 9th Ward , the neighborhood most devastated by Katrina . Gustav reminded us the city remains vulnerable to levee failure -- any levee is no match for nature . The enduring erosion of the coastline , caused by bad water management all the way from the upper Mississippi River and the coastal canals , erodes the marshes and leaves coastal Louisiana exposed to the full brunt of future hurricanes . Public safety and housing remain the most difficult issues . Crime is a major problem in the Big Easy , and the police department is under enormous strain . Several groups of New Orleans Police Department employees are under federal investigation , accused of abuse of power -- including murder charges . Today , in these tough economic times , police officers are being asked to accept a 10 percent pay cut . Most officers can not take their police cars home without paying for that privilege . Public safety has a long way to go . Also , more bad than good has been said of Louisiana 's `` Road Home '' program , designed to help displaced residents get back into their houses . The shining star of home rebuilding , instead , is the enormous amount of volunteers who work tirelessly to help poor folks get back into their homes . Many middle-class neighborhoods still include blighted houses . The only option for the owners , who do n't have the cash to rebuild , is to tear them down . The 9th and 7th Wards and St. Bernard Parish have the worst problems . Many people remain frustrated with the `` Road Home '' program . Although some got enough money to rebuild , most complain that the amount of provided by insurance and FEMA falls far short of actual repair costs . FEMA used pre-Katrina values to determine repair costs , but the costs of building materials and labor were a lot higher after the hurricane . New Orleans also had one of the highest number of renters in the country , at about 37 percent of residents . Initially , FEMA did not provide funding to rebuild rented housing . The slow economy that followed Katrina put limits on the amount of cash for building affordable housing . Most of the city 's public housing projects were demolished . The city and private companies are building mixed-use public housing , but most of the poor people I speak with are suspicious of the effort . The Business District is in better shape than ever , but the legacy of Katrina 's destruction lives on in the poorer neighborhoods of the 9th Ward and St. Bernard Parish . The opinions expressed in this commentary are solely those of Russel L. Honoré .
Russel Honoré : Post - Katrina New Orleans is a tale of two cities , haves vs. have nots . Progress in the Business District but lingering problems in poorer neighborhoods , he says . Honoré points to new hotels , restaurants , public transit stations , charter schools . But crime remains high , many businesses still a wreck , little public service for poor , he says .