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If any city should have accessible, low-cost housing, it’s New Orleans. The city’s economy revolves largely around tourism. That means a bunch of jobs waiting tables, bartending, and cleaning hotel rooms—the kind of work that doesn’t bring in high enough wages to rent market-rate condos, let alone buy a house. But some, mainly developers, maintain that construction and insurance costs are too high, and subsidies too limited, to build housing that’s within those workers’ price ranges.
A new ordinance passed by the city hopes to bridge this gap. Under an amendment to the city’s comprehensive zoning ordinance signed into law on September 9, developers can now take advantage of density bonuses awarded to those who include below-market units when building multifamily dwellings (apartment/condo buildings). As NOLA.com reporter Robert McClendon explains it:
The zoning code requires a certain amount of lot space for each unit in an apartment building. Since a developer’s cash flow on a multifamily building is based, in large part, on the number of units in it, a project’s profitability is limited by the size of the lot. Under the new rules, the more affordable housing developers include, the smaller the lot-size requirement. This would allow developers to put more units on smaller lots, lowering overhead and increasing profitability. Developers would be able to build on lots up to 30 percent smaller than they otherwise would, provided enough units are reserved for low-income residents.
Similar density-bonus proposals for increasing the supply of affordable housing are being considered in San Francisco and other cities.
New Orleans councilwoman Latoya Cantrell, the bill’s author, called it “the first step in a long journey to fixing the affordability crisis we have in the city,” when discussing it at a recent city council meeting before it was passed. Cantrell also took time during that meeting to explain how the city reached the “affordability crisis.” Referencing a CityLab article on the matter, Cantrell pointed to the moratorium that the Louisiana state bond commission imposed on subsidized multifamily dwellings in 2009. The moratorium lasted roughly four years and triggered a Fair Housing Act complaint. Said Cantrell at the September 3 meeting:
The issues of affordability were greatly exacerbated by local organizations and state officials [who] … raised the alarm about their projections showing that there would be too much subsidized housing in New Orleans as a percentage of the rest of the market. Based in part on that report, the state bond commission stopped the issuance of bonds for the creation of affordable housing, effectively killing actual projects and causing hundreds of millions of dollars in subsidies that would have been used in supporting the lower and middle ends of the housing market to be used on other things. And now we’re in a housing crisis. … It’s very important that we understand how we got here, and that there were some decisions that were made just a year or two after the storm that has led us to this.
The density bonus ordinance shifts significant pressure to private developers for filling the low-income housing void, perhaps as a sign that federally subsidized housing has done about all that it’s willing to do for New Orleans. In a phone interview with CityLab, Cantrell says she hopes she can leverage support around the density bonus into a mandatory inclusionary-zoning law that would force all developers to include affordable units in new housing projects. She’s also pushing to dedicate more of the Neighborhood Improvement Trust Fund, a pot of city money created from millage fees, to helping finance more manageably priced housing.
“I want to build it to where the private side sees the city creating incentives and showing them that we understand our role in government,” says Cantrell. “We can’t solve the problem 100 percent, but we do have a responsibility of making sure that policies and resources are available to strike that balance that we need in these neighborhoods.”
Cashauna Hill, executive director of the Greater New Orleans Fair Housing Center, says the new density ordinance is “one critical piece” in making sure the affordable housing supply is expanded.
“It’s not too late for New Orleans,” Hill tells Citylab. “We haven’t seen the majority of our communities lost to displacement yet, so we are in position where we can catch up with the [affordability] problem and work to reverse it. So, from where we stand, this [ordinance is] something that should help us.”
“It’s not too late for New Orleans.”
But both Cantrell and Hill say this ordinance is just one component of a large arsenal of tools needed to really resolve the housing problem. A citywide task force called Housing NOLA has been taking inventory of the problem and will release its policy recommendations on what’s needed to solve it in a final report this fall. Cantrell says the ordinances she’s pushing through now are in alignment with the task force’s thinking.
One of the things she believes should be reconsidered are the city’s restrictions on how high developers can build these multifamily structures. The historical character of most neighborhoods across the city include mostly single-family homes, semi-detached houses, and shotgun homes—and many want to keep it that way. This could, however, be counterproductive to efforts to make the city more resilient to storm flooding, said Cantrell.
”We have to make sure we’re moving people into high, dry areas,” says Cantrell, “So we have to have height, because we not only need the greater density in units, we also need people living in safer areas of the city. The farther we have gotten away from the disaster [Katrina], we have lost the thinking about how vulnerable we are to the flooding.”
That probably won’t curry favor with those who believe New Orleans’ Katrina woes are owed completely to the failures of the U.S. Army Corps of Engineers’ levee design in securing the city. But Cantrell says the city’s housing issues are much bigger than that.
“[People] are struggling to find housing across [all incomes], but it’s our lower-income residents who are really seeing the brunt of all of this,” she says. “With housing costs the highest they’ve ever been while our wages have not increased, the gap has grown even wider. I don’t see us on the right track at all in regards to creating balance in affordability, particularly for our working poor, who are the backbone of this city. The gap is only widening.”