Yeah, sounds good to me. Not only would a smaller New Orleans make sense, but it would be cool as fuck. Imaging something like Austin or Portland if you go that way and things work out right. Maybe that's what they have in mind.
Also, to be completely insensitive about the whole thing, I don't know how much incentive they should give the poor to come back. Not that I don't think you shouldn't help the poor. There were just way, way too many in New Orleans. Here's wishing them well in their new home cities! Spread out like they are now, I figure there's less danger of crime and maybe a better chance of them getting a leg up if they try to since they aren't completely surrounded by the poverty. Or, not as much anyway...