This article examines the interlocking nature of racialization and rescaling in post‐Katrina New Orleans, focusing specifically on the implementation of the Louisiana Road Home program, the largest housing recovery program in US history. Based on interviews and long‐term ethnographic fieldwork, I conceptualize the Road Home program as a racialized spatial strategy to revalorize disaster‐devastated spaces and enhance the exchangeability of damaged property. I trace the logic of rescaling in post‐Katrina New Orleans and reveal the ways in which state policies to accelerate the turnover time of flood‐damaged housing reflect and reinforce the racialization of space. New Orleans stands as a valuable laboratory for the study of government intervention under conditions of widespread upscaling, downscaling and outscaling processes, pushing trends found elsewhere to their limits while revealing the negative consequences of rescaling for local institutions and residents. The article illustrates the localized dynamics of rescaling in times of crisis and offers a novel processual account of the drivers and consequences of rescaling processes in a disaster‐impacted territory.