Of the Mississippi gulf coast, Arthur Strebcow of real estate management firm Latter Blum says it was more physically destroyed by Katrina than many other areas. "The storm surge was so violent that it took everything with it. There are slabs with steps that go nowhere. It's like someone clear-cut block after block of properties. So unlike New Orleans, the Mississippi coast is starting with a clean canvas in many areas. Since the water came in and went out—unlike in New Orleans, where the water stayed—Mississippians can rebuild the infrastructure faster, with no significant architecture or structural challenges to work around.

However, the problem in Mississippi is the issue of flood insurance. Many residents thought they were covered but their insurance either ruled they were not in a flood zone or the damage was not covered. As a result, many are relocating.

"Some residences will reappear but they won't be the big, old mansions that permeated the coast; they'll be Category 5 hurricane standard buildings, raised higher and pushed back farther from the coast itself," Strebcow says. "People are snapping up this real estate, and there's a momentous construction and industrial boom going on. Overall, the Mississippi coast will undergo a tremendous metamorphosis over the next five years."

One inducement to that boom is the recent Gulf Opportunity (GO) Zone tax incentive package pushed through Congress by Mississippi Senator Trent Lott, who says the package is one of his most significant contributions made in regard to real estate and investment along the coast (including 47 counties in Mississippi, 47 parishes in Louisiana and 10 counties in Alabama). The incentives are targeted squarely at businesses—helping to keep existing ones while luring new ones to the area. And, it has an entire section dedicated to the housing market along the coast.

"After the hurricane, Mississippians quickly saw that it was not the government but the private sector—corporations, charitable organizations, churches—which were really making the most impact in the immediate relief effort," Lott told Portfolio. "In fact, I talked to many business leaders in those days and weeks following the storm helping to secure and solicit help that people needed. A lot of companies, both large and small, really deserve credit for stepping up to the plate and getting things done.

"So, with the private sector helping so much in the relief effort, it's clear that private sector investment is going to play the pivotal role in the rebuilding and remaking of the Mississippi Gulf Coast," Lott says. "To that end, I think the tax incentives offered in the GO Zone legislation are going to be a real catalyst to get existing businesses back up to speed and attract new businesses, too. It's also legislation that is geared specifically toward our housing and real estate market, helping to ensure that we continue to have housing available and that our housing market can once again be robust. Business people and investors looking at opportunities along the Coast really owe it to themselves to take a close look at this tax package. These unique opportunities really have the potential to fuel not just a rebuilding, but a renaissance throughout the Gulf region."

Senator Lott adds, "As Mississippi and the Gulf region recover from Hurricane Katrina, our local economy will benefit greatly from tax relief provisions, and our rebuilding will be accelerated. I want Mississippians to enjoy the same low 4.9 percent unemployment rate that we're seeing nationwide. I want Mississippians at Katrina's point of impact to once again live in permanent homes and have a strong and steady income."

Leland Speed, founder and chairman of Mississippi-based EastGroup Properties and Parkway Properties, Inc. (NYSE: PKY), serves as executive director of the Mississippi Development Authority, the state's lead economic and community development agency. He says the GO Zone legislation is a major catalyst to investment, allowing a 50 percent depreciation, and $200,000 of small business expensing.

"As a result of this tax package, we have, among others, the country's top five home builders investing here, as well as foreign investors, with some $30 billion being pumped into Mississippi alone. This is creating a real building boom that should extend for years," Speed says. However, the GO Zone window is only open for 36 months (until the end of 2008), so investors must act now, Speed adds.