New Orleans, Louisiana
Credit: Rob Carr / Getty Images

New Orleans, Louisiana

New Orleans didn't just rebuild after Katrina; it reinvented itself with an entrepreneurial energy and urban activism that transformed the city into an exciting laboratory for urban design. "A lot of us were forced to burn our boats after Katrina – to ask, 'Do I really want to be here?' says Robbie Vitrano, whose healthy-pizza chain Naked Pizza opened in a building that was once under six feet of water. "But if you love the city, the question became, 'How do I best use my footprint?'"

New Orleans's template for the future was basically drawn up by devoted locals, who favored neighborhood-driven development and an influx of entrepreneurs from all over the country, and who saw it as one of their generation's biggest challenges. Ground zero for the movement is the once-quiet Warehouse District, an elegant yet funky mix of repurposed traditional and industrial buildings near the river. These days it's a buzzing spot to live, work, and play. "The neighborhood has become a magnet for people from all over who want to help rebuild one of America's great cities," says Tim Williamson, cofounder of the Idea Village, which links local start-ups to corporate brainpower and seed money. "Now they're connected to the soul of New Orleans."

That spirit is in obvious contrast to the clumsy efforts of post-storm FEMA, which is why a scarred New Orleans spurned a top-down makeover in favor of more focused development. Case in point: the architecturally striking, reasonably priced, very green, and seemingly storm-proof homes built by programs like Brad Pitt's Make It Right in the Lower Ninth Ward and architect William Monaghan's Build Now. While many of the hardest-hit neighborhoods won't truly bounce back for years, the showcase homes inject grace notes of optimism and a new way of thinking.

Traditional neighborhoods like Bayou St. John, which was spared the worst of the flooding, emerged as havens for creative types as well. Citywide, the qualities that have always earned New Orleans such deep affection are back and better than ever. Traditional music is thriving, and the city has more restaurants than prior to the storm. Meanwhile, enterprises ranging from Mr. Chill's barbershop to Renee Brown's Bayou Brew Wellness Tea used seed money to rise up and prosper. Seven years ago, the city's population stood at less than half its pre-Katrina total (455,000). Today, it's 79 percent of the prestorm total – and growing.