(Opinion) Newell: Affordable housing amendment is a “recipe for disaster”

By Newell Normand

September 30, 2019

It’s number four on your ballot – the New Orleans Affordable Housing Property Tax Exemption Amendment is a result of Senate bills authored by Troy Carter, who I’ve had on the show a couple of times. As a result of our conversations, he actually amended these bills to put them in a better posture. But one of the observations I made was this – we’re voting on an Amendment that says nothing. Zilch. Nada.

The Amendment talks about an ideology in regard to affordable housing. Who isn’t for affordable housing? I would love for everyone to be able to afford their own home, but that’s not reality.

Here’s the full text of the amendment.

(O)(1) Notwithstanding any provision in this constitution to the contrary, and in accordance with procedures and conditions provided by law, the City of New Orleans may exempt properties comprised of no more than fifteen residential units located within Orleans Parish from ad valorem taxes for the purpose of promoting and encouraging affordable housing. The exemption may provide an exemption from ad valorem tax for the total assessed value of the property, or a portion thereof, or may grant the right to pay ad valorem taxes based upon the assessed valuation of the property for the year prior to the commencement of the exemption. Properties used as rentals for periods of less than thirty days shall not be eligible for any ad valorem tax exemption pursuant to this Paragraph.

(2) Notwithstanding any provision of this constitution to the contrary, any decrease in the total amount of ad valorem tax collected by the taxing authority as a result of an ad valorem tax exemption granted pursuant to this Paragraph shall be absorbed by the taxing authority and shall not create any additional tax liability for other taxpayers in the taxing district as a result of any subsequent reappraisal and valuation or millage adjustment. Implementation of an exemption authorized in this Paragraph shall neither trigger nor be cause for a reappraisal of property or an adjustment of millages pursuant to the provisions of Article VII, Section 23(B) of this constitution.

So when it says, “The City of New Orleans may exempt properties comprised of no more than fifteen residential units located within Orleans Parish from ad valorem taxes for the purpose of promoting and encouraging affordable housing,” that’s the most ill-conceived language I’ve ever heard of in a Constitutional Amendment. Almost without exception, everyone that I’ve asked about what that means says that means the City can exempt up to fifteen pieces of property. I think it was done intentionally, because that’s not the case. There is no limit, other than that if there’s a multi-dwelling piece of property, there can be no more than fifteen of those units in that development that can receive this tax exemption. It’s not capped at fifteen.

The Bureau of Governmental Research came out opposed to this. When I had my conversations with Senator Carter, I brought this up – when are they gonna promulgate the rules, because this actually says nothing. The Devil is in the details, where the rubber meets the road. It gives unfettered authority to adopt rules without any checks and balances. None! Zero! If this were to pass, the Mayor, the Council, whoever could wave a magic wand and say “You are a property taxpayer today, but you won’t be tomorrow.”

I can understand why they didn’t want to put any rules in the Amendment, because then they would be handcuffed. They gotta live by those rules, and they want to be more nimble and flexible. Okay, I’ll give you that. What I won’t give you is that you’re asking the public to vote on this Amendment that says nothing, provides no details about who’s gonna qualify. There’s been talk that once you qualify for this exemption, there’s consideration that it may be heritable to your descendents. To me, that sounds like Prop 13 in California, which has been a complete and total disaster.

Where are the rules? If this is so great, so worthy, so necessary, why are we afraid to adopt the rules? One would think it would be easy to do so. If we’ve gone through the thought process of understanding that this is a such a worthy cause, why do we have the fear to put forward the who, why and how of who’s gonna be able to qualify?

If this all sounds too complicated, I’ll make it very, very simple. If you vote YES on this, it may be the most irresponsible vote you’ve ever made. Don’t vote in favor of things that you don’t know what the impact will be!

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