The Army Corps of Engineers did indeed make a huge effort to divert the river and drain New Orleans, which lies below sea level. John McPhee reports on this effort at length in his terrific book The Control of Nature. Basically, the city is surrounded by a ring of earthen dykes which keep the waters at bay. They work in normal conditions, but should they be breached by a storm surge in a direct hurricane hit, they would actually turn the city into a giant bathtub, preventing water from escaping and basically drowning the city at a depth of up to 20 feet. Scary.
It was interesting to read the comments by BEK and Planderella. I'll offer another perspective, secondhand but I hope interesting because it's a story of relocation. When we're used to our own communities it's hard to pinpoint what might jump out at people from another region.
My brother and his wife lived in New Orleans for two years after relocating from New York. They had visited several times, and just fell in love with it. Since they were just starting their careers they thought, "why not New Orleans?"
Well, they found out. At first they were delighted, as was I when I made my visits to them. They loved the restaurants, culture, nightlife, music, everything. Loved the 14-foot ceilings, marble countertops, live-oak moldings, French doors, hot tub, courtyard, and hibiscus-strewn veranda that came along with their $550/month rental house in the Irish Channel. What a quality of life for such an affordable amount, they thought!
They left after two years. Their reasons:
1. The climate. Although they adapted to the heat and even liked it, they found that the particular thick atmosphere of New Orleans had the tendency to sap motivation, energy, and industry. As they often remarked, it's amazing anyone ever starts a business or constructs a building down there, when it's oh so much more pleasant to drink a cool drink in the shade and then sleep through the afternoon. The constant 99-100% humidity really does encourage sloth. It's one thing to stroll along a promenade as a tourist at a languid New Orleanian pace, but quite another to try to accomplish your errands, go grocery shopping, sweep your sidewalk, etc.
2. Crime and related issues. My bro & sister-in-law participated in their "neighborhood association", which was basically a code for "cop bribery group". Twice a year they would take up a collection to present to their local police as a 'gift'. This collection amounted to several thousand dollars. This system is apparently well embedded in New Orleans city life. The cops apparently make under $20,000 a year (and that in a city with one of the highest murder rates anywhere). So citizens feel comfortable taking matters into their own hands and essentially paying for policing. Neighborhoods where people can't afford that are underpoliced.
Although most of the violent crime seems to be drug-oriented and centers around poor neighborhoods where there's high drug activity, a couple who were close friends and neighbors of theirs were victims of an armed home invasion burglary in which they were bound and forced to lay face down on the floor while their home was robbed. There are a lot of guns in New Orleans. Many homeowners have them, and some folks make a habit of carrying handguns around on their person. The drug situation does appear to be acute, probably associated with the desperate poverty that many New Orleanians live in.
3. Government corruption. I don't remember enough about specific issues to comment on this, but I know they were continually disturbed by the old-boy politics and back-room machinations of the city government.
4. Hurricane Threat. This was the straw that broke the camel's back. My brother and his wife were there during Hurricane Mitch. Mitch was still two days away when they decided to follow the advice of city government and evacuate. They got in their car and pointed it toward Texas, and ended up a short time later stuck in motionless gridlock. They sat on the same section of two-lane highway -- one of only two major routes out of the city -- for 10 hours. Authorities were unable to get traffic moving; an entire city trying to leave all at once just created an incredible foul-up. Had the hurricane indeed hit (instead of veering off and petering out) they and thousands of other people stranded on that highway (which is suspended over a swamp) would have been dead ducks. Meanwhile, city residents who didn't have cars were corralled in the city football stadium for a couple of days, sleeping on cots and using stadium bathrooms. Not fun!
And that was the best-case scenario -- Mitch didn't even hit. After they went through this there was no question in their minds that a direct hit would have been catastrophic, miserable, grisly. They were very shaken by the experience, because it seems that the city has no viable emergency plan (other than "deny reality and hope for the best!"). If a hurricane hit the city directly, there's simply no way to evacuate New Orleans in time to prevent mass death. The infrastructure isn't adequate. The city itself has fatal flaws in its construction that would make it a giant basin in the case of storm surge.
So, taking all this into account, they decided that while they loved the Cafe au Lait, the "real" Mardi Gras, the Zapp's chips and muffalettas and jazz and Rock'n'Bowl, they weren't willing to make the sacrifices in quality of life that New Orleans demands. And that's why those rents are so cheap on those beautiful, gorgeous apartments.
I've painted a pretty negative picture here, but believe me, I'm also seduced by New Orleans' charms. Clearly, lots of people do accept the city's terms and live delightful lives there. But there's more to the place than meets the eye. It's one thing to fall in love with the magic of the place, especially when you're from out of town and dazzled by the joie de vivre; but it's quite a different proposition to make it your home. If it were as idyllic as it seems, everyone would want to live there, and those apartments would be $1500 instead of $500. So think it over before you pack your bags!