Urgent need for affordable housing in New Orleans

Urgent need for affordable housing in New Orleans

Deon Roberts

When David Miller’s apartment complex on Oretha Castle Haley Boulevard began advertising units earlier this year, he found out how in demand affordable housing is in New Orleans.

He yanked down his advertising after hundreds of people expressed interest in the 42 low-income apartments in the former Handelman Department Store building, which opened in the spring.

“We had it 100 percent leased before construction was done,” he said. “I have actual, empirical, first-hand knowledge of how acute the need for affordable housing is.”

Sheer demand is why Miller and other developers are moving forward confidently with plans to build affordable rental housing in post-hurricane New Orleans.

Gary Matherne, of the Louisiana Hurricane Housing Task Force, said there is an urgent need for 45,000 affordable rental units in Louisiana, 30,000 in New Orleans alone, thanks to hurricanes Katrina and Rita.

The units are needed for low-income families earning less than 80 percent of the area’s median income. In New Orleans, a low-income family of four must earn no more than $41,850.

Jefferson and Orleans parishes each need more than 10,000 affordable apartments for low-income residents, Matherne said.

“That’s huge,” he said. “The rest of the state shows you that no matter where you look there’s a tremendous need for housing for the low-income population of our state.”

Industry experts agree

Few dispute Matherne.

“The numbers certainly sound believable to me. A significant portion of the single-family inventory in Orleans Parish were rentals,” said Larry Schedler, a Metairie-based broker of large apartment complexes. “Let’s look at the Ninth Ward, let’s look at some areas of eastern New Orleans. That is where a significant portion of our work force housing existed.”

Schedler said up to 12,000 affordable rental units will be built across the state over the next two years.

Miller is planning to build even more affordable housing in New Orleans. He is removing asbestos from the former Falstaff beer brewery complex in order to build 156 apartments just outside the Central Business District.

Half will be affordable and subject to tax credit maximum rent restrictions. Half will be market rate, meaning rent levels are unrestricted.

On the affordable side, a one-bedroom unit will rent for roughly $475, a two-bedroom unit for $575 and a three-bedroom for $660, he said.

The project could cost $20 million, not including architectural and other fees.

Miller plans to use low-income housing tax credits from the Louisiana Housing Finance Agency to build the low-income units. The credits will provide $1.21 million annually for 10 years for a total of $12.1 million.

By law, the credits can be used only to build affordable units.

Miller said it’s hard to know exactly how much affordable housing is needed. The city population is hard to pin down as is the number of people who will return.

“And we also don’t know the income levels of the people who are going to return. And we don’t even know what median income is in New Orleans anymore,” Miller said.

Low-income credits

Other developers are using low-income tax credits to build affordable rentals, too.

New York-based Domain Cos., which has a New Orleans office, will use low-income tax credits to build roughly 230 affordable rental units in three mixed income projects on Tulane Avenue and Jefferson Davis Parkway.

“I think that the lack of affordable housing is in many respects holding back the full recovery of the city,” said Matt Schwartz, a principle with the firm.

Many industries need affordable housing, he said.

“What we’re delivering … is going to provide that housing.”

Challenges include escalating construction costs and local government red tape.

Miller said former city housing official Alberta Pate promised him $1 million from the federal HOME Investment Partnerships Program funds.

But Mayor C. Ray Nagin wants to use HOME funds to support a “fast track” program to provide rebuilding loans to homeowners and he does not know if Pate’s promse will be honored.

Copyright 2006 Dolan Media Newswires

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