Should New Orleans voters OK millions for affordable housing? No, good government group says.

By Joni Hess

Source: The Times-Picayune | Nola.com

October 9, 2024

A good government group has come out in opposition to a plan that would dedicate millions in public funding to affordable housing programs each year if approved by New Orleans voters this November.

According to a report released Wednesday by the Bureau of Governmental Research, a permanent housing fund proposed by the City Council is too restrictive for the city’s budget and could leave city leaders’ hands tied should financial challenges arise in the future.

Rejecting the plan “could mean less local investment for affordable housing, but it gives the council greater flexibility to address other city needs as well,” said BGR research analyst Nate Pabon-Trinidad.

BGR does support a “back-up” ordinance that would take effect should the council’s ballot measure fail, rules that could be undone by future councils.

The fund, championed by City Council member Lesli Harris, would direct 2% of the city’s general fund budget to affordable housing and homeowner programs, and to financial support for affordable housing developers.

Harris said BGR has endorsed a “short-sighted plan of throwing money at the problem” instead of long-term solutions and that if rejected, residents will lose out.

“We do not need temporary solutions to our very real housing crisis. We need year over year investment by the city to spur the economy, support our residents and attract private investment,” Harris said in a statement.

The fund has drawn widespread support among housing advocates, developers and policy experts who say cementing a stable funding source into the city’s charter would address a growing housing crisis for years to come.

“We have to do something different. Otherwise we’re just repackaging the same failing practices,” said Andreanecia Morris, executive director of Housing Nola. “Its a permanent way we’d always have our own money invested in the city’s health and prosperity. That’s what this does,” she said.

If approved by voters, the housing trust fund would double the amount currently dedicated to housing — about $15 million in federal grants. But under the back-up plan, at least $20 million would be set aside for housing programs, including current federal grants, BGR noted. The City Council could also change or eliminate funding at any time.

In their report analyzing the ballot measure, BGR said the back-up plan would allow money to come from various sources, instead of city resources already choked by obligations such as drainage issues and employee pensions.

The trust fund, meanwhile, would require a 2% dedication of general funds or an amount equal to them each year. The council could approve a reduction only in emergency situations and by a unanimous vote.

That’s a high bar, BGR argues. The entire proposal would enshrine a funding source in the city’s charter that would require another public vote to undo.

Though supporters of the more-binding solution say developers want assurance the city will fund affordable housing projects for years to come, and that holding it in charter won’t subject it to political whims, BGR CEO Becky Mowbray said the issue is important enough to voters that a future council would take heat for backing away from it.

Both plans showcase the council’s willingness to support housing, she added. But the back-up ordinance “just seemed to us like a safer way to go,” Mowbray said.

BGR’s position comes years after the organization discouraged voters from approving a 2021 ballot measure that would have renewed a previous housing and economic development fund called the Neighborhood Housing Improvement Fund.

That report called out Mayor LaToya Cantrell’s administration over a lack of spending breakdowns and said the city frequently diverted the fund, which generated about $4 million annually in its later years, to other priorities.

Voters narrowly rejected the measure, ending a relatively small property tax that had supported the fund since 1991.

Housing advocates at the time responded to BGR’s report with unified criticism saying it continued the organization’s pattern of discouraging investment in affordable housing, pointing to a 2009 report where BGR raised alarms about a “radical” increase in subsidized housing.

Editor’s Note, 10/09/24: This story has been updated with remarks from City Council member Lesli Harris.

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