Will affordable housing get steady funding? New Orleans City Council asks voters to approve.

By Sophie Kasakove

Source: The Times-Picayune | Nola.com

March 9, 2024

New Orleans City Council members are pressing forward with plans to enshrine an unprecedented local investment in affordable housing into the City Charter, a move aimed at expanding programs to help first-time homebuyers, rehab rental units and provide financial support to affordable housing developers.

Voters will decide in November whether the city should permanently set aside millions of dollars a year for housing programs after the City Council on Thursday unanimously passed an ordinance to create the ballot measure.

A separate ordinance, which is expected to be approved at the council’s next meeting on March 21, would establish annual funding for affordable housing even if voters reject the ballot measure. While the ordinance would create a steady funding stream, it could be more easily overturned by a future council.

Neither move would create a new tax. Instead, the moves would require that city officials use general funds in the annual budget for affordable housing.

The dedicated funding stream comes as advocates have pushed city officials for years to do more to address the city’s shortage of housing for low and moderate income residents.

New Orleans created just 97 new affordable housing units between September 2022 and August 2023, according to an annual report card for the city by HousingNOLA, and advocates say the city needs some 47,000 new affordable units to properly house all of its residents.

The crisis has been made more acute in recent years by high insurance rates, property taxes, and construction costs. In November, council members passed unanimously a measure that would create a housing trust fund.

The fund received its first investment the next month in the city’s 2024 budget — a one-time allocation of $17 million. That money is slated to be appropriated — likely to the Office of Community Development — through a capital budget ordinance that council will consider on March 21.

But it wasn’t clear how those programs would be funded going forward.

“More than ever, this annual funding is important and will help our residents stay at home in New Orleans instead of seeking other cities that offer better housing and economic benefits,” said District B Council member Lesli Harris, who sponsored the charter amendment, in a prepared statement.

If voters approve the ballot measure this November, it would amend the city charter to require an investment of at least two percent of the city’s annual general operating budget into the housing fund.

A charter amendment is not required for the trust fund to start receiving general fund revenues, but would make it more difficult for future city councils to re-appropriate the money.

The measure has the support of Mayor LaToya Cantrell’s administration.

Years in the making
Finding local funding for housing has long been an uphill battle for affordable housing advocates. For three decades, starting in 1991, a property tax millage generated funding for a Neighborhood Housing Improvement Fund to be used for housing and economic development.

But it raised only between $3 and 4 million in its later years and lawmakers dedicated little of that to housing.

Voters narrowly rejected a ballot measure to renew that tax in 2021 after the Bureau of Governmental Research, the non-partisan good government group, said that the city had failed to oversee the money appropriately.

Without local funding, the city has relied instead of federal and other grants, which are limited and often come with requirements that can make them difficult for developers to use.

Advocates and housing experts praised the council for its efforts on Thursday.

“It’s truly one of the most significant measures for affordable housing in a long time,” said John Sullivan, Gulf Coast director of state and local policy for Enterprise Community Partners, a national affordable housing nonprofit.

The next step is for housing advocates and officials to convince voters to support the measure, said Andreanecia Morris, director of HousingNOLA. She said that will require more transparency about how existing funds are being used.

“We hope that the council and administration spend a lot of time over the next few months talking about the funds that currently exist for affordable housing and what’s being done with them,” said Morris.

Two different ordinances
While the charter amendment, if passed, would require that at least 2% of the city’s general fund budget go towards the housing trust fund, the second ordinance introduced Thursday would require city officials to allocate $20 million for affordable housing per year, even if voters reject the ballot measure.

Because the ordinance wouldn’t change the city’s charter, it could more easily be repealed by future councils.

The ordinance, sponsored by District A Council Member Joe Giarrusso, would dedicate funding from a variety of local and federal sources. If the ballot measure passes in November, Giarrusso said he would repeal his ordinance.

Giarrusso’s ordinance would also establish a housing advisory committee that would advise the mayor and council on funding sources and uses.

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