In The News › N.O. faces public housing dilemma: Build it right or build it fast?

Oct 20, 2006

Source: Newhouse News Service

N.O. faces public housing dilemma: Build it right or build it fast?

New Orleans Faces Public Housing Dilemma: Build It Right
or Build It Fast?
BY LAURA MAGGI And GWEN
FILOSA
c.2006 Newhouse News Service

NEW ORLEANS — As the floodwaters from Hurricane Katrina receded last fall, academic experts pontificated that this city’s
profound loss also represented an opportunity to rectify its historic blights.
The most pressing obstacle would be the deeply concentrated poverty trapping families in public housing complexes and adjoining
ghettos, many of them lacking basic neighborhood necessities such as grocery stores.

But the vision of New Orleans’ poorest neighborhoods being remade as mixed-income meccas, with tree-lined streets and bustling parks,
has run smack up against another imperative of the post-Katrina era: building back low-income housing so that poor New Orleanians
can return home and land jobs in the recovery economy.

More than a year later, the quandary facing New Orleans comes down to some tough questions: Does the city build it right or build it
fast? At the same time, while it might be a noble goal to reinvent public housing in New Orleans over the long term, what does that do
for displaced poor residents who want to go home now?

The Louisiana Recovery Authority has championed reform and seeks to use lucrative tax credits awarded to the state by Congress
late last year, as well as direct allocations of federal dollars, to get developers to build rental housing that will be attractive to families at
a variety of income levels.

“The most important thing about doing a mixed-income development, it is not just the project itself. You are not just
remaking the development. You are remaking that neighborhood,” said Amy Liu, deputy director of the Brookings Institution’s
Metropolitan Policy Program, which has been supportive of the LRA’s effort.

The federal government is taking a similar tack with New Orleans’ public housing. The Housing Authority of New Orleans, which is run
by the U.S. Department of Housing and Urban Development, has mostly decided against rebuilding the aging public housing
developments, characterized by insular clusters of identical brick buildings and a low-income tenant population uniformly dependent
on government subsidy.

Instead, HANO will tap the same pool of tax credits to build new complexes, some of which are expected to follow the ideal of mixing
market-rate apartments with subsidized ones.

Those decisions have infuriated several constituencies who say the approach will proceed too slowly to help displaced New Orleanians
without ample resources.

Advocates for the poor clamor for opening the public housing developments as quickly as possible and argue that some of them,
including one known as Lafitte, remain viable. Yet thousands of apartments that once housed poor families remain vacant and
closed, including six of the city’s traditional complexes.

“Do part of Lafitte — bring people back home,” Lafitte resident Leah Green told City Council members days after HUD announced it
would tear down its four largest developments, including the Lafitte site in the Treme neighborhood.

Green said that at least 128 of Lafitte’s 865 units could have been repaired and reopened by now. Instead, the development has sat
empty and untouched since September 2005.

“Lafitte always was the model. It would be much wiser, instead of tearing down all of Lafitte,” to renovate the units, Green said,
arguing that Lafitte had minor problems compared with the nightmares that characterized life in some city complexes.

Developers of private affordable-housing complexes — the primary recipient of these tax credits — also have emphasized speed, saying
the credits should be distributed to projects that can be opened quickly to deal with the severe rental housing crisis in New Orleans.

At meetings this summer, many developers argued that state leaders are too focused on a utopian ideal of integrated housing at a
time when they should be focusing on quickly repairing housing for the low-income work force, now desperately needed in the New
Orleans area by industries ranging from tourism to construction.

Arguing for a third strategy, the Bureau of Governmental Research, a nonprofit watchdog agency, has argued that the LRA has focused
with tunnel vision on Orleans Parish, rather than the metropolitan area at large.

Rather than using the tax credits to replicate the pre-Katrina demographics of the city — specifically its heavy concentration of the
region’s poorest residents — state officials should seize the chance to create affordable housing throughout the suburban parishes, said
BGR President Janet Howard.

“So much of the money and jobs have gone to suburbs, leaving poverty in the city,” said Howard, who argued that it also would
make sense to aim the tax credits at building affordable apartments in the suburbs to help lower-income people relocate closer to jobs
that would help them climb the economic ladder.

One key question is whether developers will rise to the tax credit bait and, if so, whether they will succeed in creating the ideal mixed income
developments. Mixed-income projects are far more difficult to get off the ground than those that are usually built with low income
housing tax credits.

“It is a good thing. But it is a very challenging thing to do,” said Josh Collen, whose Bolden Development Co. has done some work in
New Orleans.

Instead of mixed-income developments, Collen said the state should direct the federal tax credits toward building apartments for workingclass
people, the income group that often takes advantage of the private rental units subsidized by these credits. Under current
federal rules for low-income housing tax credits, developers are allowed to rent to people who earn up to 60 percent of the local area
median income, which is well above the poverty level.

The LRA plan is more ambitious. It aims to use the post-Katrina windfall of low-income housing tax credits to essentially socially
engineer a “natural neighborhood,” said Peter Werwath. He directs the consulting business for Enterprise Community Partners Inc.,
which helped state officials develop the early outlines of the rental proposal. HANO recently selected Enterprise’s development arm,
along with Providence Community Housing, to redevelop the Lafitte complex.

“When you look at some of the well-functioning neighborhoods in New Orleans, you already find a mix of incomes,” Werwath said.
“You have people on fixed incomes next to people making minimum wage. And then people who may make three or four times more
than the lowest-income people.”

Previous public housing policies only made things worse for the very people they aimed to lift from squalor, said Pres Kabacoff, chairman
of HRI Properties Inc., which built the only mixed-income public-private development in New Orleans to date: the River Garden
complex at the former St. Thomas housing project.

“Concentrating the poor has been a proven failure,” he said. Others would levy the same charge at Kabacoff and River Garden,
which critics argue did little more than squeeze the vast majority of public housing residents out of their neighborhood.

And River Garden had an advantage that other developers might not have: a prime location in heart of the Lower Garden District,
making it more attractive to market-rate renters.

“If you had a site in the Warehouse District, everyone wants to live there,” said Collen, the developer. “You can make an apartment
complex work because market renters want to be there.”

Kabacoff agreed that a desirable location is important; a mixed income neighborhood will not succeed if it is surrounded by poverty.

But he argued that there are other areas — and available land — where a River Garden-style development could work.
Public housing advocates say the River Garden complex demonstrates the fundamental flaw with mixed-income
developments: that by definition many of the very poor will not be able to live there. To attract people who can pay market-rate rent —
or close to it — the number of subsidized units is limited.

“It’s all fine and good to say, `This is going to be better for you one day,”’ said Lucia Blacksher, an attorney with Greater New Orleans
Fair Housing Action Center. “The question is: What do people do in the meantime?”

Blacksher’s agency filed a formal complaint with HUD in November over the lack of available units for public housing at River Garden,
saying that its managers have yet to comply with the promise to include the working poor and give special consideration to housing
the St. Thomas families forced out by that development’s demolition.

“History has shown that, at least with respect to St. Thomas, it’s been an inadequate solution for the deconcentration of poverty,”
Blacksher said. “People are essentially put into a worse situation than they were before. That’s what we saw before the storm, and
that’s what we’re seeing now.”

The nonprofit developers HANO selected to redevelop Lafitte have promised the former residents that they will be able to return, paying
the same rents as before, which were based on 30 percent of their income. And they have promised that their plans will not reduce the
number of subsidized homes.

(Laura Maggi and Gwen Filosa are staff writers for The Times-
Picayune of New Orleans. They can be contacted at
lmaggi@timespicayune.com or gfilosa@timespicayune.com.)
10/20/2006 http://www.newhousenews.com/archive/maggi102006.html

Oct 20, 2006

Source: Newhouse News Service

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