In The News › LRA’s rental program criticized

Sep 9, 2006

Source: Times-Picayune

LRA’s rental program criticized

LRA’s rental program criticized
It’s too focused on low incomes, bureau says
Saturday, September 09, 2006
By Laura Maggi
Staff writer

Instead of focusing on rebuilding the rental units ruined by Hurricanes Katrina and Rita, the Louisiana Recovery Authority’s programs to revitalize the rental market are geared too much toward subsidized housing for poor people, the Bureau of Governmental Research said in a report issued Friday.

Much of the billions of dollars of federal aid for repairing storm-devastated property will be spent on owner-occupied houses. But the LRA has allocated $869 million of Community Development Block Grants to repair units owned by small landlords, who own just a few houses or apartments. Another $594 million of block grants will be paired with low-income- housing tax credits to create or rebuild larger rental developments.

But the bureau said not enough resources are being allocated to the small landlord program — a particular problem in New Orleans, which has about 63 percent of the rental housing damage and where many of the rental units are owned by people with a double or two. The group suggested expanding that program and removing a provision that restricts future rent rates.

“If you don’t take care of small rental properties, we are going to have a huge blight problem in city,” said Janet Howard, president of the group, which estimates that in the Mid-City area around 90 percent of the rental units with major damage were owned by small landlords. She argued that the rental restrictions would convert current market-rate properties into affordable units.

LRA officials countered that they have designed programs geared toward replacing as many destroyed units in New Orleans as possible, using all the available resources, while trying to target the lower-income workers needed to help rebuild the city.

While the bureau was critical of the LRA’s focus on affordable housing, other groups have argued that not enough recovery dollars have been targeted at lower-income people, particularly former renters who are unable to come back to the city because of the astronomical rise in rents since Katrina.

The small landlord program is designed to provide “soft loans” to landlords, which would not require repayment unless the property is sold. Landlords who accept the loans would agree to restrict rents based on how much assistance a property received. For example, the lowest allocations, likely up to $25,000 per unit, would be geared toward families at 80 percent of the area’s median income, which in New Orleans is about $41,800 for a family of four. Their rent would be capped at $840 a month.

A contractor hired to run the program has indicated that it will start taking applications in late October.

LRA officials said the goal is simply to restore some rents to pre-Katrina levels. They also pointed out that the largest soft loans are reserved for those at 50 percent of the area’s median income, which is above the poverty level.

Andy Kopplin, the LRA’s executive director, said the group tried to create rental programs that targeted workers who can’t afford current rates, such as those in the tourism industry. At the same time, the focus of the larger development program is to “deconcentrate poverty” with mixed-income housing that combines market-rate and various levels of subsidized housing.

But Howard said the group has strayed from its original vision of mixed-income projects, allowing for developments that will be completely subsidized and provide housing at a variety of rent levels, from the very poor to working-class families.

The comment period for revisions the LRA has made to its rental programs ends Monday. Comments can be posted at www.state.la.us/cdbg/DRactionplans.htm

Sep 9, 2006

Source: Times-Picayune

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