1. Is this the right plan to rebuild New Orleans? Why or why not?
No, it is not. From your NYT article:
Mr. Baker's fellow conservatives, in Congress and out, are worried about the huge scale of his proposed intervention. In the House Financial Services Committee, several members tried unsuccessfully to limit the proposal's spending and duration, or to require that it break even. "It is irresponsible for Congress to write a blank check, drawn on the account of American taxpayers, bound only by the imagination of politicians," said Representative Jeb Hensarling, Republican of Texas. "We need to ensure that taxpayers are not asked again two or three years from now to pay for the same disaster."
Homeowners are highly unlikely to be foreclosed upon because the land is virtually worthless and foreclosing means the bank must fix up the property in order to sell it (as well as being liable for any hazards on the property).
The government is not likely to develop land after it buys it. What's it going to do with 1,000s of homes?2. Does this plan truly benefit homeowners or is it a boondoggle for developers?
It probably would benefit homeowners. They would be able to recoup equity that they otherwise would not have. But at what cost? To me, this amounts to the federal government buying a lot of "swampland in Florida". Of course it benefits the sellers, but the buyer (the government) will likely to be left with large tracts of swampland.3. Given Baker's previous comments, should his motives be questioned?
I don't think so. Baker claims that he has always wanted to clean up the low income housing in Louisiana. I guess this is his chance. Unfortunately, this plan is far too under-developed and sketchy. $80 billion is a lot of money to spend. At this point, there is no guarantee (or even guess) that property in NOLA will be developed by anyone, let alone by the federal government.