In storm's eye, Mississippi town recovers – slowly

Keeping Susan and Dan McManus sane these days is a fence: eight-foot-tall planks that stretch around their nearly finished cottage two blocks from the beach in Waveland, Miss. Outside the fence is the devastation that is still left a year after hurricane Katrina. Inside is a swimming pool, flowering hibiscus, and the dream that one day things will be back to normal.

"Even if no one else comes back, that backyard is my little oasis," says Mrs. McManus. The often-bantering retirees are some of the first residents to rebuild here at the eye of the Category 3 storm that swept away miles of waterfront homes and businesses.

"A lot of people think we're crazy to come back," she adds. "But this is where we chose to spend our golden years. We love the area, and it's frustrating to us that others aren't as proactive as we are."

Today – one year after Katrina – they plan to move from their federally provided trailer to their new two- bedroom Arts and Crafts-style home.

Even for the McManuses, who could have relocated anywhere, rebuilding hasn't been easy. The 1934 house that Katrina leveled was insured for $350,000 and the couple received half of that, because they were told they did not live in a flood-prone area and therefore didn't have insurance against the hurricane's surge of water, which created most of the damage. Mr. McManus says he would have gotten even less were he not a retired insurance agent with the same company that issued the policy. He receives many calls from former clients who are getting much less. "I am ashamed to tell people I meet that I was in the insurance business," he says.

The couple has also taken out a disaster loan with the Small Business Administration for $115,000 and is still waiting for federal community development block grant money.

But costs are going up. Labor and materials are now much more expensive than before the hurricane. Even with Mr. McManus doing most of the work himself, he and his wife are spending between $150 to $175 a square foot to build their home – some $250,000, excluding landscaping.

For those with less means, moving to Waveland has become harder. Beachfront property prices have jumped an average of $50,000 per parcel, says John Thomas Longo, Waveland's mayor – and that's just for the land. "Even though they want to come back, a lot of the blue-collar folks and senior citizens don't have the wherewithal to come back," he says.

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