They are evacuating the entire city. Everyone.
I finally understood all the talk about flooding and levees and ‘New Orleans under sea level’ better when I saw this graphic of New Orleans.
If you were to draw a line from the top of Lake Pontchartrain across the city, you’ll see that the entire city would flood. The levee on that lake is what is broken. The water will not stop filling up New Orleans until the water level in NO is equal with the lake.