This paper examines household adjustments to Hurricane Katrina by estimating the effects of Katrina-induced damages on changes in household demographics and income distributions in the Orleans Parish between 2000 and 2012. Adjustment patterns are found to be heterogeneous across ethno-racial segments, income classes, and educational attainment. Shares of middle-income and affluent households along with educated individuals decreased in severely damaged areas relative to less damaged ones. Also the share of individuals with lower educational levels and incomes below the poverty line increased in severely damaged block groups. Furthermore, the share of the white population decreased and the share of the black population increased in damaged areas for both home owners and renters. Overall adjustment patterns suggest that resource and financially constrained population adjust by moving into previously damaged areas, while economically capable households adjust by relocating to safer areas within or outside of the parish. Given estimated increases in vulnerable segments of the population in hazardous hotspots, public efforts should focus on either revitalizing poorer neighborhoods, by investing in long-term hazard mitigation measures and improving infrastructure, with segregated housing or assisting gradual population retreat to enhance community resilience and reduce vulnerability and exposure to future catastrophic events.