NEW ORLEANS -- Carmen Mills had enough. Her husband was carjacked. Then there was a murder on her block in the Bywater neighborhood of New Orleans, long a rough part of a city that was falling to pieces.

This wasn’t long after Hurricane Katrina. The levees had failed and the city was in tatters. Mills and her husband decided to head out for New York City, like so many others leaving behind their beloved but wrecked City that Care Forgot.

Six months ago they moved back and found a city transformed. As with Miami-Dade after Hurricane Andrew, money had poured in when the storm receded. New Orleans neighborhoods that were bleak and crime-ridden even before the 2005 flood now had coffee shops, art galleries, bookstores and restaurants with local, seasonal ingredients.

Many residents say New Orleans is a better place to live now than even before the devastating flood. There is a surge in entrepreneurship, with newcomers and native New Orleanians launching tech startups and other new businesses, saying there’s a spirit of creativity and possibility the hidebound city lacked before the storm. The traditional, clubby networks that ran the city were broken up by the disaster, said Tim Williamson, who runs a group that helps entrepreneurs attract investors. Everyone had to start over, he said, and that demanded ingenuity and risk taking.

“New Orleans became a startup city,” Williamson said.

The Brookings Institution reports entrepreneurial activity in New Orleans at 40 percent above the national average, with an average of 450 out of 100,000 adults starting businesses each year. That is nearly double the rate it was before the hurricane.

The city has become a magnet, in defiance of those who forecast its downfall. New Orleans grew faster than any major U.S. city in the 15 months following the 2010 census, the latest figures available.

Mills is back in the Bywater neighborhood she left. Now her worry is the potential of too much development in what has become one of the city’s hottest neighborhoods, changing its funky and unique character of music, cafes and artist studios, pushing gentrification too far over the edge.

“I don’t want my neighborhood to change,” she said.

New Orleans has become a little more accessible, less an outpost. But it remains a place like nowhere else, with its own culture of music and food, where streets have names like Desire, Royal and Elysian Fields, a city that celebrates misfits and living.

Some things about New Orleans haven’t changed. It’s still a place that manages to be sublime and heartbreaking at the same time.

Not all New Orleanians benefit from the city’s renaissance. It is a different city for the very poor. Much of the Lower 9th Ward, a low-income African-American neighborhood hit the hardest by the storm, remains blighted. In some parts, where there used to be a house every 60 feet or so, homes where families had built their lives for multiple generations, it is now overgrown with thick Louisiana vegetation that harbors garbage, snakes, possums, raccoons, rats and worse. The charred body of a murder victim was found last August inside a white Dodge Charger that was abandoned and torched.

“Everything is about race here, everything is about class here, and everything is about not wanting certain parts of the city to come back,” said Vanessa Gueringer, who lives in the 9th Ward and is pushing for schools and a grocery store there.

New Orleans has the highest per-capita murder rate in the country, with killings concentrated in the city’s poorer neighborhoods. The city is still sick from the storm. An estimated one out of every four homes in New Orleans remains vacant.

There are about 40,000 such abandoned buildings throughout the city, many still bearing the search-and-rescue markings indicating whether dead bodies were found inside after the flooding. There are twice as many homeless people in New Orleans as before the storm. They often seek shelter at night in the derelict buildings, living amid garbage, filth and rotting floorboards, relieving themselves in a bucket in the hallway while not far away people enjoy a city renewed, a place that draws movie stars and entrepreneurs with astonishing music, culture and cuisine.

“It is a tale of two cities,” said Martha Kegel, who leads an alliance of nonprofits that fight homelessness.

There’s hope mixed with despair, often in the same block, in the Lower 9th Ward. Nice, well-kept homes sit between boarded-up derelict structures. This neighborhood became the national symbol of the flooding, a place where a massive red barge rode a torrent of floodwater into the neighborhood, landing atop houses and a yellow school bus. It’s a place that tour buses now come, bringing out-of-towners from the French Quarter for a “Hurricane Katrina Tour.”

“An eyewitness account of the events surrounding the most devastating natural — and man-made — disaster on American soil! … We’ll drive past an actual levee that ‘breached,’ ” declares Gray Line, which charges $48 for the excursion.

Robert Green doesn’t need to take the tour. He and his family tried to evacuate to Nashville, the day before the hurricane hit but couldn’t make it out of the city because the traffic was snarled and they worried about his sick mother. They went to the Louisiana Superdome for shelter but the lines were long and, he said, his mother was turned away from receiving medical help, told that the staff wasn’t ready. They decided to try again the next day.

“We came back home. At four o’clock in the morning we were fighting 25 feet of water. We got to the attic and kicked our way to the roof as our house lifted off its foundation and started floating down the street,” Green said in a recent interview. “The house literally broke up underneath our feet. We lost my granddaughter, who was only 3 years old.”

Green and his brother were able to pull their 73-year-old, Parkinson’s-afflicted mother out of the water and revive her. But she was soon lost as well in the churning torrent. It took four months for Green and his brother to find her body.

Green now lives steps from his old home, in an ultra-energy-efficient house built by actor Brad Pitt’s nonprofit foundation, which plans to build 150 brightly colored, modernist homes in the Lower 9th Ward. Green said that where he lives maybe 5 percent of the families have returned, but many others still ask about coming back, seven years after the storm.

“Every house that comes back brings back another family,” Green said. “Every family that comes back brings back more generations to the city.”

New Orleans is growing, although it’s still smaller than before the hurricane. The U.S. Census Bureau puts the population at some 360,740 residents, or about 79 percent of what it was before. The city has seen a massive influx of federal recovery dollars go to public works jobs, billions for rebuilding the city and strengthening the levee system. That helped it to weather the recession, as has the resurgence of the tourism industry. The city has become “Hollywood South,” with 46 tax-subsidized films or television shows shot in New Orleans last year alone.

Sal and Antonio LaMartina, fourth-generation New Orleanians, were at a Gulf Coast beach when Antonio got the idea of putting frozen margarita drinks into a squeezable pouch, kind of like a Capri Sun for adults. The product, “Big Easy Blends,” is now in thousands of Walgreens stores across the nation, among many other retailers. Sal is 32 years old and Antonio is 28. They have 135 employees and $27 million in projected revenue this year.

“There is so much young talent and new ideas here now,” Sal LaMartina said. “People are coming to New Orleans now, instead of everybody just leaving.”