NEW ORLEANS, Jan 31 (Reuters) - New Orleans' latest plan to recover from Hurricane Katrina calls for a 10-year rebuilding program costing $14 billion that will leave some neighborhoods still sparsely populated. The proposal, compiled by planning experts and residents, calls for $1.2 billion in incentives for elevating homes either by raising the ground level or by putting them on stilts, $831 million to repair or rebuild schools and $650 million to rehabilitate low-income housing. Billions more would go to rebuild sewer and drainage systems and invest in the local economy, devastated when 80 percent of the city was flooded by Hurricane Katrina in 2005. The new proposal doesn't advocate converting flood-prone neighborhoods into parks as did previous recovery plans that failed to gain popular support. The plan says all city neighborhoods could be rebuilt but encourages residents to locate in "clusters" of homes to make delivery of city services easier. Troy Henry, a consultant who managed the plan's development, said many of the city's residents are more open to rebuilding in a different part of the city than they were shortly after Katrina struck in August 2005. "No one wants to live amidst the blight forever," Henry told Reuters. Only about half of New Orleans' 455,000 pre-Katrina residents have returned. Many neighborhoods remain sparsely populated, with potholed streets and debris-littered yards. The city's tourism and convention business has yet to recover. Before becoming a blueprint for rebuilding, the plan must win the approval of the city's Planning Commission, City Council and Mayor Ray Nagin, who has said he would be inclined to approve it.
