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Rate of housing aid up in N.O.

By Katy Reckdahl
Staff writer

A larger share of New Orleans families receive federal housing subsidies now than before Hurricane Katrina, even though thousands of affordable apartments approved for financing through federal housing programs have yet to materialize, according to a new Bureau of Governmental Research report.

By 2012, the nonprofit organization estimates, one in four households in New Orleans will be subsidized, compared with one in 10 pre-Katrina. In three years, Orleans Parish will have 70 percent of the subsidized housing in the seven-parish region. The parish with the next highest rate of subsidized housing, Jefferson, will have 20 percent, the report estimates.

The report suggests the city may be in danger of having too much subsidized housing. “Policymakers should strive for a housing market that accommodates different income levels without placing a disproportionate burden on the city,” it says.

The agency’s predictions are clearly meant to lay the groundwork for the city’s forthcoming master plan. The plan “provides a prime opportunity” for debates about subsidized housing, according to the report, which noted that subsidized housing can both hurt and benefit a city, depending on location, management and whether low-income people are segregated in islands of poverty.

The increase was triggered by an infusion of federal aid to city residents and developers, including Community Development Block Grant funds and Gulf Opportunity Zone tax credits, a special allocation of low-income housing tax credits.

The report cautions, however, that its projections of nearly 36,000 subsidized households in New Orleans by 2012 may be high, since the total includes everything in a pipeline badly fractured by the housing crisis. In particular, the report singles out one-fourth of the total that “might not” proceed to completion: 1,000 units in tax-credit projects that haven’t yet closed, 1,200 units in still-unfunded public housing redevelopments, and more than 6,500 units in the Road Home small-rental program, which has sputtered but holds promise because of recent changes.

The report documents how the city’s stock of subsidized housing has changed since Katrina. Before the storm, about half of the area’s housing subsidies were linked to public housing units and specific affordable apartments. Now about two-thirds of subsidies come through portable housing vouchers, given to low-income families to help pay rent in the private market.

The report found an 82 percent jump in the number of vouchers since 2005, with most of them going to two groups: the approximately 4,500 families whose public-housing apartments were demolished and the nearly 9,500 families who qualified for emergency aid through the soon-to-end Disaster Housing Assistance Program.

A few thousand more, many of them elderly, used to live in apartments subsidized by the Department of Housing and Urban Development but now receive portable vouchers. Those apartments made up 5 percent of the city’s rental stock before the storm. Advocates estimate that about one-third of the elderly and working-poor households that had lived in such units now get no aid because they didn’t realize they were eligible for vouchers until it was too late.

Overall, although a higher proportion of New Orleans families now get housing aid, the increase in aid tends to be shallower and targeted at more moderate-income families.

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