OVERVIEW OF THE PROBLEM
The development of affordable housing in New Orleans has not kept pace with the growing demand. The term “affordable housing” is a broad term that encompasses many middle-income working families with good jobs who nevertheless struggle to buy or rent decent housing at an affordable price. HousingNOLA, a local affordable housing advocacy organization, released a report in 2015, which estimated that 33,000 new housing units at all income levels are needed by 2025 to keep up with demand.
RISING RENTS PUSHING PEOPLE OUT
Many long-time residents of neighborhoods that are currently high-demand areas are being displaced by rising rents. The real estate firm Rentcafe reported that the average rental price per month for a two-bedroom apartment in New Orleans is $1,137. The U.S. Department of Housing and Urban Development recommends that a household spend no more than 30% of its income on housing. Given the averages above, meeting that target is a serious problem facing many New Orleans families. The average household income citywide is less than $50,000 per year, and in the African American community it’s less than $33,200. At that income, to meet the HUD target, these families would need to spend no more than $830 per month on housing, more than $300 per month below the Rentcafe average (and that’s before utilities are added). The problem is even more acute for African American males and young people, where unemployment rates are especially high and average income especially low—many in these demographic groups have incomes below $10,000 per year. And this problem affects the entire city. The dearth of affordable housing has already decimated some of the city’s historic neighborhoods and it threatens even more.
SHORT-TERM RENTALS CAN MAKE THINGS WORSE
Technological advances have produced a spike in short-term rentals (via AirBnB, VRBO, etc.), which can change the character of neighborhoods and remove affordable rental housing from the market. New Orleans is a city where 60% of residents rent, so the damaging effects are profound and make a citywide impact. In short, housing policy is not just about buildings; it’s about the very social fabric of our city. It’s also not just about new construction, but also about helping people stay in their neighborhoods.
My administration will tackle this problem from both ends: housing policy to create more affordable housing and protect our neighborhoods, as well as economic development to get people jobs that allow them to afford decent housing. This position paper will focus on affordable housing and neighborhood protection policies.
GOALS & PLANS
The City of New Orleans has participated in a comprehensive process to produce and execute an aggressive citywide plan for affordable housing. An unprecedented effort to unify the efforts of many non-profit and government agencies behind a strategic vision and efficient processes, this plan is a product of a broad coalition of the public, private, and non-profit sectors with substantial input from citizens. Deliberations included city officials, non-profits, business leaders, and citizens. Public meetings have been a strong feature and are an ongoing part of the process. I applaud and support the breadth and depth of this ongoing collaborative effort and commit to continuing it. The target set for the city We will further commit to the principles and goals elucidated in the plan. Those principles and goals are (source: HousingNOLA):
• Preserve existing and expand the total supply of affordable rental and homeownership opportunities.
• Prevent future displacement through development activities and continued study and policy review.
• Enforce and promote fair housing policies throughout New Orleans.
• Encourage sustainable design and infrastructure for all New Orleanians, including an emphasis on energy efficiency in existing homes.
• Increase accessibility for all walks of life, including special needs residents.
• Improve Quality of Life in New Orleans neighborhoods.
My administration will approach this problem aggressively. In addition to following through on the commitments above, my administration will:
1. Prioritize the development of safe, healthy and affordable rental units and homeownership near jobs and essential public services.
2. Focus on Quality of Life issues including blight reduction and transit-oriented development.
3. Improve and develop policies and programs to preserve and protect established residential neighborhoods, including additional restrictions on short-term rentals (STRs) and improving planning and enforcement processes. I will support amending the Short-term Rental Ordinances (covering, for example, AirBnB and VRBO) to place greater restrictions on STRs. Possible additional restrictions include limiting the number of STRs in neighborhoods zoned for single-family residences, possibly to one per block, and requiring the property owner to have a homestead exemption. Additionally, I support fully maintaining the prohibition on STRs in the French Quarter.
4. Emphasize improving energy efficiency, which (in addition to being environmentally responsible) adds green jobs to our economy, preserves historic New Orleans architecture, makes older homes more affordable to live in and maintain, and helps minimize pest infestations.
5. Encourage and work with the City’s major employers, (e.g. higher education institutions, health care institutions and the hospitality industry) to offer and develop programs to help their employees rent apartments and purchase homes near their jobs.
6. Implement the Smart Housing Mix to foster widespread opportunities for affordable housing.
7. Develop and improve the planning process and enforcement policies to protect and preserve long established neighborhoods.
8. Make a concerted effort to assist seniors in securing the property-tax freezes they are entitled to. There are thousands of seniors in New Orleans eligible under current policy to freeze their property taxes who are not participating in the program. It’s vital to helping many of them keep their homes.
9. Work to clear the title and tax issues preventing many languishing, blighted properties from being put back into commerce and developed.
10. Encourage banks to invest in Community Developed Finance Institutions. The word “investment” is used deliberately – these would not be gifts, donations, or grants, but investments in the community that financial institutions will profit from, but from which our neighborhoods and city will also benefit greatly.
11. Increase funding for HousingNOLA initiatives by creating a sustainable, dedicated, new source of funding for housing issues, planning and financial assistance for renters, homebuyers and programs for the homeless. Specifically, I want to link major new projects, the development and redevelopment of properties throughout the city, with improved affordable housing. With each new project that commences in New Orleans beginning in 2018, new money would be dedicated to additional affordable housing. This method of generating financial support has the potential to generate more resources than the current methods of funding affordable housing plans (see “Illustration” below).
MORE INFORMATION ON FUNDING THE CHARBONNET HOUSING APPROACH
1. Fiscally, affordable housing will be among my highest priorities. My administration will create new partnerships as well as deepen existing relationships with non-profit organizations, government entities, and business and financial institutions to fund housing programs. Every possible avenue for increased funding will be explored.
2. My administration will also prioritize developing funding mechanisms that make New Orleans more independent, sustainable, and less reliant on federal money.
3. As an example of creative funding approaches we should take: my administration will dedicate revenue from major new developments built in New Orleans after 2018. A fixed percentage of property and sales taxes from all major new developments will be dedicated to housing programs.
4. Furthermore, a fixed percentage of rents or commissions of public assets will also be dedicated to housing programs.
ILLUSTRATION OF REVENUE DEDICATION FORMULA FOR MAJOR NEW DEVELOPMENT PROJECTS
As an example of how such a funding plan might generate considerable revenue, the World Trade Center is a new major development which will generate millions of dollars annually in rent, property taxes and sales taxes.
The proposed lease and development agreement between the city and private developers include the following projections of rent and taxes which can be dedicated to public safety and housing.
The above is only an illustration of how the principle works. What the illustration should make clear, above all, is that this way of dedicating funding to our top priorities could greatly enhance the financial resources committed to affordable housing. The resources must be commensurate with the priority of the problem and the requirements of solutions. The lack of affordable housing in New Orleans is a complex problem, and the HousingNOLA initiatives, along with my additional action items, represent a holistic approach fashioned in consultation and collaboration with a large, inclusive coalition of stakeholders across the city. The problem of affordable housing is interwoven with so many of our other challenges including crime and economic development. It is imperative that we work to ensure that everyone has access to safe, affordable housing near their place of work and with access to transportation and basic amenities such as grocery stores. My commitment is to prioritize that goal through practical plans.