HOW DID WE GET HERE?
by Anitra D. Brown
According to the 2016 Katrina Index compiled annually since the storm, home values have risen 54 percent and rent is up 50 percent since Katrina. The annual household income needed to afford rent in New Orleans is $38,000, but 71 percent of workers earn on average $35,000.
And while the average doesn’t sound so bad; the reality is many people make far less.
Nearly 28 percent of the city’s residents live in poverty. According to the Data Center’s research on poverty in New Orleans, 39 percent of all children in the parish live in poverty, yet 82 percent of New Orleans families with children have at least one working parent, indicating that many of these children live in families where the bread winner is stuck in one of the many low-wage jobs offered in New Orleans. A full 12 percent of full-time, year-round workers in the New Orleans metro earn less than $17,500 per year, compared to only 8 percent nationally. And female workers in New Orleans are more likely to earn low wages. According to 2013 Census data, more than 64,000 working women in New Orleans earned less than $17,500 in the prior 12 months through either full-time or part-time work. For Black New Orleanians, these bleak statistics are even bleaker.
Meanwhile, New Orleans has only 47 affordable rental units for every 100 low-income residents. Thirty-seven percent of households in the city are paying half of their income for housing. And 36 percent of renters pay more than 50 percent of their income for housing, a more than 100 percent increase from 2004, when about 24 percent residents spent more than half their earnings on housing. The New Orleans metro area ranks second in the top 10 worst metro areas for renters, according to the Make Room Initiative, a nationwide campaign launched in 2015 to raise awareness about and bring an end to the rental affordability crisis in America.
For many—especially those struggling to find and maintain decent housing at an affordable rate while earning poverty wages—these dismal digits are neither new nor surprising. In fact, it seems the only folk feigning surprise at the affordable housing crisis in New Orleans are those who were in position to do something about it.
So when the New Orleans City Council recently approved plans for a new apartment complex by Sidney Torres and developer Edward Community in Mid-City, there was a little give and take. The developers got to make their apartment complex a lot denser—adding 110 units to the plan for a total 382 apartments—in exchange for making a scant 14 of the units affordable and within reach of a handful residents who earn about $12,600 a year. Fourteen affordable apartment units are hardly a drop in the bucket for a city that experts say needs as many as 5,000 affordable housing units right now, today! At that rate, the city of New Orleans would have to negotiate with the developers of another 350 or so, large-scale, multi-family developments to secure enough affordable housing in otherwise market-rate developments to accommodate current need.
To be sure, the need for affordable housing options in New Orleans is critical. Earlier this month, New Orleans ranked 14th in the nation in most expensive rent, according to an analysis by Zumper, an apartment real estate rental website. The survey looked at more than one million rental listings across the country. According to Zumper’s survey, the median rent in the city is $1,410. Just a few months earlier, New Orleans ranked 18th in the nation. Also according to Zumper, rents have risen sharply across the city in a short time, with rent for one bedroom unit in New Orleans rising by 4.4 percent and by 3.6 percent for a two-bedroom from September 2016 to November 2016.
What hasn’t risen nearly are the wages. According to the U.S. Census, per capita income for Orleans Parish was a little more than $27,255 or about $2,271 a month between 2010 and 2014, suggesting that way too many New Orleanians are spending half their earnings on rent. Meanwhile, leaders scramble to address and stretch to explain the shortage of affordable housing, with some all to happy to point a finger at a rise in short-term rentals throughout the city as a scapegoat. To be sure, the reasons many New Orleanians are having a hard time finding a reasonably priced place to call home are varied and have been in the making a very long time. Here at The New Orleans Tribune, we heard the death knell back in 1999 when the Hope VI revitalization of the then St. Thomas Housing Development was approved. As phrases like “deconcentrated poverty” and “mixed-income” were thrown around as the answer to society’s ills and developer HRI Properties prepared to convert the St. Thomas into River Garden, we cautioned that it was the first step in pricing and pushing the poorest New Orleanians out of the city.
And we weren’t the only ones. About 14 years ago when Pres Kabacoff’s HRI, which is also the private developer in the former Iberville transformation, was redeveloping the St. Thomas, Brod Bagert Jr., released a study titled Smoke, Mirrors and Urban Mercantilism wherein he noted a significant need for affordable housing and recommended putting 572 affordable units back into the St. Thomas–a proposition that Kabacoff called “unrealistic”, “unaffordable” and “the wrong thing to do.”
To be sure, while leaders and opinion shapers pushed the idea of “deconcentrated” poverty to justify the redevelopment and reduction of public housing, the reality is that it has only been moved and deposited to the furthest parts of the city away from jobs, transportation and other necessary services, such as New Orleans East and Algiers, two areas which account for about 25 percent of the Section 8 vouchers issued by HANO, according to report released by the Greater New Orleans Fair Housing Action Center earlier this year.
The Reduction of Public Housing
The lack of affordable housing in New Orleans has been created—arguably intentionally—by a combination of at least two occurrences. First, traditional public housing in the wake of Hurricane Katrina was demolished and replaced by the mixed-income, mixed-use redevelopment model embraced by the U.S. Department of Housing and Urban Development and egged on by private developers eager to benefit from the tax breaks and incentives that came with it. Secondly, other new development has focused on high-end, luxury apartments for market-rate renters, with little to no attention paid to meeting the housing needs of poor and low-wage earning residents by either the developers as they counted their profit or city leaders as they approved construction plans and permits.
With regard to public housing, following in the vain of the St. Thomas, the Fischer, and the Desire housing developments that were redeveloped under HUD’s Hope VI program before Katrina, the city’s biggest public housing developments—the Lafitte, the B.W. Cooper, the C.J. Peete, and the St. Bernard—were demolished after a 2007 vote by the New Orleans City Council and ultimately replaced with fewer units, with only a portion of those available to tenants who qualify for public housing. The Big Four, which when originally built totaled 5,300 public housing units, have so far been replaced with 1,918 units. Only 706, less than 37 percent, are designated public housing units, according to the Housing Authority of New Orleans. And according to HANO, all of its sites are at near capacity, with 79 vacancies in public housing and 85 vacancies in market-rate units across all of its properties, including scatter sites.
The last of the traditional public housing developments to be redeveloped, the former Iberville has also re-opened as a mixed-income, mixed-use development called Bienville-Basin, with its revitalization taking place under HUD’s Choice Neighborhood Initiative. Market-rate rents for a two-bedroom there are advertised at rates starting just under $1,500. Only 117 of Bienville-Basin’s 332 apartments are public housing units, replacing what used to be 858 units of public housing. Meanwhile, Bienville-Basin’s website boasts that the new development is in close proximity to Bourbon Street, the CBD, and the Bio Medical District, along with great restaurants and shopping. What it doesn’t mention is its immediacy to many of the low-wage, service industry jobs that a number public housing residents rely on to eke out a meager existence.
Hurt disproportionately by the decrease in the public housing stock are single, Black female heads of households with children under the age of 18. They were more than 75 percent of the residents in the Big Four developments prior to Katrina, according to a report from the Institute for Women’s Policy Research.
The Unchecked Growth of the High-End Rental Market
Now couple the demolition and replacement of public housing units to make way for mixed-used, mixed-income developments—a little less than half of which is public housing—with the trend of developers building high-end, highly-proclaimed luxury apartment communities for the market-rate landscape, and just how and why New Orleans finds itself deep in an affordable housing crisis becomes plain to see.
In the year following Katrina, rents in New Orleans increased by 35 percent. And recent apartment developments in the downtown area—just blocks from where the Iberville was transformed into Bienville Basin Apartments—are prime examples of the direction multi-family housing development in New Orleans has taken ever since—“luxury” living at what can easily be described as exaggerated market-rate prices. At The California Building at 1111 Tulane Avenue, a one-bedroom-one bath starts at $1,265 and can go for as much as $2,235 a month. The adjacent 144 Elks Luxury Lofts in the heart of the CBD does not advertise its rates on its website. A little further along the edges of downtown, the Paramount New Orleans has rents that start at $1,465 for a one bed-one bath; and rents start at $2,000 at the nearby Beacon at South Market. The posh, downtown developments are not the only units commanding rents that are out of reach of the poorest New Orleans. Consider The Marquis on Poydras a few blocks from Broad where one bedrooms command more than $1,100, while four bedrooms rent at just under $1,800; the Falstaff Apartments in Mid-City, where rents range from $850 to a little more than $1,100 for one to three bedroom units; and The Georgian on St. Charles Avenue, where rent rents start at $962 for studios and increase to a little more than $2,400 for two-bedrooms—all out of reach of anyone making $17,500 year. In fact, even a family of four with a combined income of $35,000 a year would have to spend well over one-third to more than one-half of their pre-tax dollars for a two-bedroom apartment at almost any of one these complexes.
To be sure, these developments are just examples of what is taking place in the heart of the city and throughout its boundaries. And while some of these developments have set aside a few units at affordable rates in exchange for the federal and state incentives and tax breaks received by the developers, their numbers still do not come close to helping ease the city’s affordable housing crisis. In fact, according to the city’s Katrina 10 recovery data, since Hurricane Katrina more than $543 million have been invested in about 60 new multi-family rental developments in the region for a total of almost 7,500 housing units, yet New Orleans still desperately needs housing that many of its citizens can actually afford. The entire scene makes it disturbingly evident that developers have been busy building housing for the people they want to see in New Orleans as opposed to the people that are here—including those who work the low-wage jobs in the city’s tourism-driven economy—all as the city’s leaders have watched it happened without discouraging or preventing it.
And the rental market isn’t the only place where folk are catching hell. The cost of homeownership in some of the city’s most historic neighborhoods has also skyrocketed since Katrina. As neighborhoods like St. Roch, the Marigny, Bywater and parts of the 7th Ward feel the impact of gentrification, rising home values, higher tax bills and ballooning insurance rates, working and even many so-called middle-class residents struggle to obtain and/or maintain homeownership. According to Katrina 10 recovery data, the average home sale price in New Orleans rose by almost 15 percent from $237,768 in 2005 to $279,369 in 2013. More recent home sales in some of the city’s quickly changing neighborhoods demonstrate the existing paradigm. A one-bedroom, one bathroom single, shotgun at 1811 Burgundy in the Marigny, which has seen an influx of wealthier White residents in the years after Katrina, sold just months ago for $365,000. Bloated home prices such as that could easily discourage low and mid-wage earning residents from considering ownership as a viable option. And to compound the problem, rising home values and tax bills have priced some New Orleanians out of the neighborhoods they and their families have lived in for generations.
The Supposed Solutions
Now that the sleeping giant has finally been awakened, city leaders are paying more attention to the affordable housing crisis that loomed for the better part of decade. And the deal Torres struck with the city is a part of New Orleans’ smart housing mix program, a pilot program and study designed to help beef up the city’s affordable housing stock. The Smart Housing Mix Ordinance Study, as requested by the New Orleans City Council, directs the City Planning Commission to conduct study on the creation and implementation of a Smart Housing Mix Ordinance that would influence market rate developers to build and preserve lower-priced housing, such as by requiring or incentivizing the addition of lower-priced homes and apartments by offering variances to the city’s zoning ordinances and codes. It is a step in the right direction—but a small one, given the immediate and large-scale need for more affordable housing.
Fortunately, it is not the only tool leaders are relying on to help address the problem. The HousingNOLA initiative was launched in 2015 with a 10-year plan to address the crisis. HousingNOLA is the city’s community-led housing plan that aims to address affordable housing needs of New Orleans over the next ten years by developing 3,000 affordable homes by 2018 and a total of 5,000 by 2021 with the use of local, state and federal money, through public policy and by working with private developers and nonprofits.
HousingNOLA released its first report card on the state of housing in the city in late September 2016, with an event that included a roundtable discussion with community members, guests and city officials will follow. In that report card, the organization, led by Executive Director Andreanecia Morris, gave itself a B for its efforts so far in meeting its six stated goals, which are:
Preserve existing housing and increase overall supply of affordable housing;
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;
Increase accessibility for all walks of life, including special needs residents;
And Strategic Goals.
Among its successes, HousingNOLA counts work with the City Planning Commission to study mandatory inclusionary zoning—essentially the Smart Housing Mix Ordinance Study that the city is embarking upon; the dedication of funding homeowners and landlords rehab housing to help stabilize neighborhoods; and HANO’s implementation of the criminal background policy it adopted in 2013, a revision of policy designed to help remove impediments for formerly incarcerated citizens in securing affordable housing.