The beginning of the 20st century was marked in India by two major disasters. In January 2001 a severe earthquake stroke Gujarat. Less than four years later the Indian Ocean tsunami hit coastal Tamil Nadu. The two states' reconstruction process varied significantly. In Gujarat affected communities could choose between different agencies and approaches. This led to 87 percent of the reconstruction being owner-driven. In Tamil Nadu reconstruction pursed a top-down approach and was mainly contractor-driven. What are the causes and what are the consequences of such different reconstruction processes? This paper is based on a review of secondary data, policy documents and empirical research in Gujarat and Tamil Nadu. In Gujarat we found that owner-driven reconstruction achieved the highest level of satisfaction among all categories of people and was the fastest and most cost-effective reconstruction approach. In Tamil Nadu housing reconstruction was socio-culturally and environmentally insensitive. The research revealed a number of perverse ˜side-effects' of contractor-driven reconstruction combined with over-funding and prejudices towards local housing culture and building practices, such as the systematic demolition of undamaged and reparable houses to gain land to build new houses and the massive cutting of trees. These interventions transformed the natural habitat and built environment of coastal Tamil Nadu beyond recognition with detrimental effects on coastal communities' social cohesion, resilience, and wellbeing.