Because of the depth of the city, breaking the levee on the other side lets in water from the Mississippi. I searched around on Google Earth. This is what the mayor must have meant by 80% of the city underwater. It just had not filled in yet.
Maybe the mayor misspoke and meant that 80% of the city is below sea level, not underwater. That makes it a reminder of the difficulty of the situation, not breaking news, and can explain the nonchalant way in which he said it.