In The News › Rental programs facing questions

Dec 8, 2009

Source: The Times-Picayune

Filed under: Housing, Statewide

Rental programs facing questions

Finally gearing up, impact is unclear

Tuesday, December 08, 2009
By David Hammer
The Times-Picayune

More than four years after Hurricane Katrina, the state’s troubled rental housing programs are finally bearing fruit, but recent market studies are making some leaders nervous about whether they should continue as they are.

“We want to determine if the programs we developed 3 ½ years ago are still having an impact,” said Walter Leger, chairman of the Louisiana Recovery Authority’s Housing Task Force, which met for the second time in a year on Monday. “Are we producing enough affordable housing, and alternatively, are we having a bad impact on the market? We’re trying to understand what the real rental market is.”

The LRA review comes after Louisiana House Speaker Jim Tucker, R-Algiers, proposed redirecting unused federal housing grants to fighting blight in New Orleans. Tucker raised the issue at last month’s LRA board meeting, calling on the agency staff to identify available money. Monday, state staff reported that $320 million of the $1.4 billion left in the Road Home budget hadn’t been earmarked.

Concern over the future of rental aid programs took on added urgency last week when the nonprofit Greater New Orleans Community Data Center produced a report that found the city of New Orleans will likely face a surplus next year of more than 6,500 market-rate apartments, but a deficit of more than 13,000 units for lower-income families who need subsidies to be able to afford their rent.

Additionally, the state faces a December 2010 deadline to spend $209 million in Low Income Housing Tax Credits for large rental property developers, or lose it.

The impending deadline, combined with talk about moving money into other programs, worries community organizations such as the faith-based Jeremiah Group, which fought hard a few years ago to make sure enough money was dedicated to restoring affordable housing.

“We need to continue to dedicate money to affordable housing,” said task force member and Jeremiah Group leader Nell Bolton. “If the federal government doesn’t give us an extension on the tax credits, that will create more uncertainty, but if we have more time, maybe we can get some certainty in the numbers. But it’s definitely premature to shift any money away from the housing recovery.”

At the same time, some members of the task force and others worried that any big increase in subsidized housing would cause a spike in market-rate rents, further hindering the recovery.

“There’s a need for government intervention, but we accept there are consequences if subsidized housing is poorly planned,” said Steven Stewart of the Bureau for Governmental Research, another nonprofit watchdog. “There are issues of supply, demand and sustainability.”

The LRA used federal Community Development Block Grants after Katrina to subsidize affordable housing. The goal was to restore 33,000 rental units by giving government aid to rebuilding landlords and developers.

Two years after the storm, the progress was negligible. An $869 million program for mom-and-pop landlords had paid exactly two property owners to rebuild and offer affordable rents. A $592 million subsidy for building bigger apartment complexes had just a few projects under construction. Meanwhile, thousands of lower-income, minimum-wage workers looked in vain for rental housing, usually having to drive in from the outskirts of the city to work construction or service sector jobs in New Orleans.

But in 2009, the two rental subsidy programs have gotten going. The small rental program, for one- to four-unit properties, has paid $116 million to finish rebuilding 2,543 units, with another 3,371 units under construction. The so-called piggyback program for apartment complexes, meanwhile, has doled out $245 million to build 2,444 units in 17 projects with a mix of affordable and market-rate units.

Some well-known mixed-income developments have opened in the past year, including Nine 27 in the Warehouse District, the Preserve in Mid-City, Walnut Square in eastern New Orleans, and 200 Carondelet, a restored historic hotel downtown.

Another $171 million is ready to go to 13 other projects under construction, which should produce another 2,564 units soon.

The goals for the two rental subsidy programs have been scaled back considerably. Instead of 33,000 subsidized units to replace the 81,000 destroyed by the 2005 storms, the target is now to bring fewer than 20,000 back on line, according to the latest data supplied by the LRA.

Dec 8, 2009

Source: The Times-Picayune

Filed under: Housing, Statewide

Fair Use Notice

This site occasionally reprints copyrighted material, the use of which has not always been specifically authorized by the copyright owner. We make such material available in our efforts to advance understanding of issues and to highlight the accomplishments of our affiliates. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is available without profit. For more information go to: US CODE: Title 17,107. Limitations on exclusive rights: Fair use. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.