Tuesday is the one-year anniversary of Hurricane Katrina's landfall on the U.S. Gulf Coast. The storm devastated large areas of Louisiana, Mississippi and Alabama. It produced a surge of water that breached levees protecting low areas in New Orleans and flooded 80 percent of that city. Thousands of people were stranded for several days. One year later, the city has less than half its pre-Katrina population and is still struggling to recover.

Many businesses in New Orleans need more tourists and residents to come back so they can survive

New Orleans is using a new $7 million advertising campaign to draw tourists back to the city once known as "The Big Easy."  Tourism revenues are less than half of what they were before Hurricane Katrina. Many businesses are struggling to survive.

Even some lifelong residents who returned and found good jobs here say the current scene is depressing. This hotel worker calls herself Miss Jones. "The pictures cannot describe what is really here. Trust me. You have to come see for yourself -- boarded up buildings and businesses. People who never came back. I mean, you see mildew growing outside people's houses."

Some jobs can be found, but housing is a big concern for workers, such as Ms. Jones, a hotel employee

Miss Jones says her rent has doubled since Katrina and her neighborhood is crime-infested.  She now questions her decision to return.

"If I had a choice, I would take it all back and would not be here right now,” she told us. “I really would not. I would have relocated me and my kids somewhere else."

Small business owners are also worried. Many wonder how long they can sustain losses as they wait for things to get better.

Karen Rowley

Karen Rowley, of the Public Affairs Research Council of Louisiana, has written a report on Gulf Coast recovery. She shares their concern. "It is a little frightening because you wonder how long are they going to be able to hold out. When will people start coming back? Will they come back in time for these people to stay afloat? Yeah, it is a worry."

Tourism officials say there are signs of hope. Many conventions have been scheduled for the coming months.

But New Orleans also faces a housing shortage that prevents skilled workers from returning.

Public Affairs Research Council president Jim Brandt says other Gulf Coast communities have addressed such problems with clear, comprehensive plans -- something New Orleans has failed to do.

"Unless people know -- and there is a hunger out there for information -- they want to know what the situation will be before they invest, before they rebuild.  Will they get insurance? Will they have city services? And that, unfortunately, has not been forthcoming."

Damaged homes and rubble along the streets are still common sites in some neighborhoods

One of the most contentious areas of the city is the Lower Ninth Ward. It is just a few kilometers east of downtown in a low area devastated by flooding. The U.S. Army Corps of Engineers closed the breach in the levee here. Officials say the new wall is stronger than what existed before.

But as workers tear down some of the most badly damaged homes, people who had long-standing ties to the area clamor to return.

New Orleans Mayor Ray Nagin stepped back from the recommendations of his own recovery commission, refusing to abandon any neighborhood. Many experts think rebuilding in such low-lying areas makes no sense. But some urban planners disagree.

Mukesh Kumar

Mukesh Kumar is an urban planning professor at Jackson State University in Mississippi. He says, "Can we really argue that New Orleans should never have existed at all because it was built in a swampy area, lying below sea level? I don't think so. I don't have a clear answer, but it is a collective decision. It should not be experts' decision, for sure. It should be the decision of the people."

But one year after the flood, most of the city's people still reside elsewhere. Many say they will not return.

Boston College political science professor Mark Landy says people from both ends of the economic scale need reasons to come back.

"In a funny way, the incentive for very poor people to move back may not be that great and then the incentive for the most mobile and the most professionally successful is not necessarily that great either. I read a statistic -- that I cannot corroborate -- but it was that something like 95 percent of the psychiatrists from New Orleans are not here anymore. Why? Because a psychiatrist is a pretty mobile person. You can shrink heads in New Orleans or you can shrink heads in Memphis. This is a terrible risk to the fabric of the city."

One year after the flood, New Orleans shows signs of progress. But it is still a long way from full recovery.