Really a very good idea. I visited Venice once several years ago and was never so impressed by a working city. You get to it by crossng a causeway, and find yourself in something like a real world Renissance Disney World. You can get around the city only one of two ways--by boat or by foot. The canals being so narrow, boat speed is restricted to about 5 m.ph. All of this means it's just like stepping back in time for about 600 years, except most modern amenities are still there and the city's mostly for tourists. This means the welfare/criminal class isn't there any more than it's present at Disney World.
Yup, thats the idea in a nutshell. Preserve the French Quarte etc and remake New Orleans into a quaint Old Town while allowing nature to work its wonders. Build new developments and smaller towns on higher ground where the workers will live and have mass transit to get them into New New Orleans and get their asses out in a hurry when the next Cat 4 hits.
I was in Venice in 1968. Long long ago. If you saw no crime then you were not a young woman walking around. Scary smelly place.