Who’ll return, and to what?

Paupers don’t own homes next to multimillionaires in Brentwood, Bel-Air, San Marino and the other expensive enclaves of Southern California. But it’s a different story in New Orleans, where many families inherit Grandma’s house free and clear.

The result is that poor families live side-by-side with wealthy ones, making New Orleans one of the few places in the country that is not economically segregated. And that remarkable quality, some fear, may be lost in the new New Orleans.

“The thing about New Orleans that is so interesting isn’t the housing stock or the beautiful architecture or walking down Bourbon Street,” said Kristina Ford, the former executive director of the New Orleans planning commission. It’s that you have an incredibly rich house two or three houses away from a very poor house, she said. “Blacks live next to whites, and Creoles live next to Hondurans.”

Attempting to re-create that demographic jumble will further complicate the formidable task of rebuilding thousands of homes destroyed by Hurricane Katrina and the subsequent flooding.

Some wonder whether it’s even possible to preserve that patchwork quilt of class and race that New Orleans was or to avoid developing the Stepford mansions and cookie-cutter villas that make some streets and subdivisions indistinguishable in Southern California.

Because of the New Orleans diaspora, attention is turning to who will actually return -- and to what.

Public policy experts predict that the wealthy -- aided by insurance and financial resources -- will rebuild, and that those without aid or resources will not. In most cases, the path back to New Orleans will be arduous.

What are homeowners facing? Those with minimal insurance coverage and little home equity will find it difficult or impossible to rebuild or even repair their homes, said Anthony B. Sanders, professor of finance at Ohio State University. The reason is that those who do not own their homes outright and are making mortgage payments must continue to pay on their loans even if they’re currently unemployed, which is the case for many of the evacuees.

“They’re cooked,” Sanders said.

Although some lenders are offering temporary payment reprieves, many Gulf Coast homeowners will be unable or unwilling to continue paying for ruined homes on what may be environmentally tainted land. When payments cease, said J.R. DeShazo, an associate professor at UCLA’s School of Public Policy and Social Research, banks will likely foreclose on the properties. Those banks will get stuck holding the land while they hope and wait for a federal bailout. Meanwhile, land speculators are waiting in the wings, expected to swoop into town ready to purchase blighted areas.

“Developers and builders will make a lot of money,” DeShazo said.

Those who walk away from their mortgages will face soiled credit ratings and, starting Oct. 17, a new bankruptcy law that is less sympathetic to their plight.

In a city that was 80% under water, about 60% of the homeowners did not have flood insurance.

Many plans exclude coverage for flood damage and as many as 50,000 owners may have no coverage at all, said Barry B. LePatner, a lawyer and consultant to developers. Often, when homes were inherited, the owners didn’t carry insurance for various reasons -- the inability to pay for it chief among them.

And then there are homeowners who are covered by insurance, but with policy limits. If repairs come to $200,000 -- a likely scenario in flood-ravaged New Orleans -- and the policy payout is capped at $100,000, the owners must either try to rebuild with the $100,000, attempt to sell the house or walk away from the property with the cash.

Barbara and Michael Bariclev are loaded with insurance, including flood protection -- but it may not be enough to bring them home to the city that Barbara’s ancestors helped found in the early 1700s. Last the Bariclevs heard, their beloved 80-year-old home, an architectural beauty in the low-lying Lakeview area two miles from a broken levee, was awash in toxic water.

“My heart and soul say ... return to my home,” Barbara Bariclev said, “but my brain is telling me no.”

From their safe harbor at a relative’s home in Baton Rouge, La., the Bariclevs and their three children wait for now. Experts predict it could be up to two years while their neighborhood is drained of water and detoxified and the damage to their home assessed by their insurer. They then will need to comply with new building codes before they can reinhabit or rebuild their home.

“Even with all the insurance I bought, I still have a feeling my flooded house will be a financial disaster,” Michael Bariclev said.

Mark Davis, executive director of the Coalition to Restore Coastal Louisiana, also hasn’t decided yet what he and his family will ultimately do. He wants to return to their Craftsman-style bungalow in the Carrollton section of the city. For now, his wife and 3-year-old son are staying with relatives in Indiana.

Davis believes floodwaters reached the ground floor of his house, and although he’s concerned about the damage, it’s not his top priority.

“First thing we have to do is find out whether there is [an environmentally sound] future,” Davis said.

Another issue likely to come into play is whether homeowners will establish roots in other cities while they are waiting it out. Many news accounts quote people from New Orleans saying they will never return.

Meanwhile, some envision temporary shelters for reconstruction workers springing up around the city -- manufactured homes and tent cities -- and “huge convoys of double-wides barreling down the north-south highways to the delta,” said Larry Rosenthal, a UC Berkeley public policy expert.

Workers also will commute from Louisiana’s suburbs to help rebuild the bridges and interstate highways.

“It will look like the Marshall Plan at first,” Rosenthal said. “A city that’s been bombed.”

Katrina survivor D. Joan Rhodes, in her 50s, is staying in Baton Rouge, along with her 96-year-old godmother and other family members. Her family owns six funeral homes and has lived in the city for three generations. She owns six houses in New Orleans, including a Creole cottage, with an enclosed courtyard and slave quarters, built in the late 1700s.

She survived the storm, which caused the second floor to crash into the first at her Victorian near downtown, in the Treme section not far from what she said is the “still beautiful” French Quarter. And perhaps most importantly, she intends to return.