REGIONAL REPORT: SOUTHEAST

NIMBYism Strikes in Mississippi

By Dana Enfinger

AFFORDABLE HOUSING FINANCE • JULY 2007

Nearly two years after one of the most devastating natural disasters in the state’s history damaged or destroyed more than 71,000 rental housing units, residents of Mississippi’s Gulf Coast are blocking the new affordable housing developments the area needs now more than ever.

“It has been said that we need 5,000 units of affordable housing [in Gulfport],” said Jessie Billups, a public relations officer for the Mississippi Regional Housing Authority VIII, which serves 14 counties in Southern Mississippi. “Not one new unit has gone up.”

That’s partly because the city has dictated that any future low-income housing tax credit (LIHTC) projects built in Gulfport must be located no closer than a mile from each other. Further, any future tax credit development is required to have a mix of 60 percent market-rate rents and 40 percent affordable rents. Having such a small share of units set aside for tax credits shrinks the amount of funding developers can get. “You can’t find a developer who’s going to jump at a project like that,” said Billups. The result: LIHTC deals in Gulfport have “virtually been killed without saying so on paper,” he added.

Of the eight affordable developments mentioned in Mayor Brent Warr’s unofficial housing plan for Gulfport, only two are new developments. And only one of those is a rental property. The remaining sites are to be rehabilitated or rebuilt. The authority plans to use tax credits to fund the projects, but nothing has been approved.

While it waits, the Region VIII housing authority has requested that the state withhold Community Development Block Grant funds and any other funds for which the city might qualify until the issue of tax credit projects in Gulfport is resolved, said Billups.

About a dozen miles away, though, some progress on affordable housing is being made. The authority and its development partner, Realtex Development, based in Austin, Texas, recently received the green light to build Timber Grove Apartments, a 96-unit tax credit project in D’Iberville. Two other tax credit developments, consisting of a total of 264 units, have been approved in Pascagoula and are in the environmental assessment process.

New state programs make progress

Even as NIMBYism prevails in parts of the Gulf Coast, Mississippi Gov. Haley Barbour’s Office of Recovery and Renewal is doing much to rebuild businesses and housing that were damaged or destroyed. The office’s public housing, small rental assistance, and homeowners’ grants programs are making significant gains. For instance, more than $919 million in homeowners’ grants have been paid to almost 13,000 recipients.

The public housing program was set up to replace existing public housing stock on at least a “one-for-one” basis, and it looks like federal funding will get it close to meeting that goal. A housing management consulting firm contracted by the Department of Housing and Urban Development estimated that it will cost $111.3 million to repair and rebuild 2,534 public housing units on Mississippi’s Gulf Coast that were damaged when Hurricane Katrina hit.

That leaves the program, which received a $100 million federal aid package to assist the five housing authorities on the Gulf Coast with rebuilding, with about an 11 percent shortfall. That figure doesn’t include another $5 million in costs for the Mississippi Development Authority to administer the funds. The Region VIII housing authority is using tax credits to fill the gaps to rebuild one public housing site and fix two more in Gulfport, said Billups.

The state’s Small Rental Assistance Program will provide up to $250 million in loans to small rental owners in four Gulf Coast counties in Mississippi. Threequarters of the rental units that were damaged or destroyed in the state are located in Hancock, Harrison, Jackson, and Pearl River counties. Loan recipients must rent the units to households earning between 80 percent and 120 percent of the area median income (AMI), depending on the number of units per property. The program should give workforce housing a boost; however, the commitment to this provision is for five years. It’s not clear whether rent restrictions would remain in place after that.

Winning housing concept

Mississippi has been ahead of the game in dealing with temporary housing for the displaced, said Jason Spellings, housing liaison for the Governor’s Office of Recovery and Renewal.

He estimated that approximately 19,000 families are living in Federal Emergency Management Agency (FEMA) trailers in Mississippi. Those families include both renters and homeowners at every economic level. At press time, the state had a contractor in Indiana building the first cottages in a pilot program for Mississippi. An application process is being developed for current travel trailer tenants interested in moving into an alternative housing model.

The pilot program was awarded $280 million from FEMA in a competition in which the agency called on the five states affected by the 2005 hurricanes to produce viable alternatives to its temporary trailers. Another $120 million was divvied up between Alabama, Florida, Louisiana, and Texas.

“There was talk that the other states were upset with the amounts of the award we received,” said Spellings. Although other states submitted proposals for permanent housing or other concepts that didn’t quite fit FEMA’s request, Mississippi proposed the Katrina cottage.

“[The cottages] look like houses. They have front porches, attractive siding, tin roofs,” said Spellings. The homes range in size from 400 to 840 square feet.

Some Gulf Coast residents have been calling the cottage a “slum-in-a-box,” because of the manufactured nature of the homes. Spellings said the trailers are the structures that look like slums, not the cottages. “They are much more sturdy than the travel trailers,” he said. “By and large, we’ve gotten a positive response to the cottages. These are so much better than areas where it’s just row after row of travel trailers.”

There are issues with the indoor air quality in the FEMA trailers, said Spellings. Playgrounds and parking lots have been converted into FEMA trailer parks. Policing the sites and collecting garbage are problematic. And the great fear is what will happen to the trailers when even a moderate storm hits. The cottages, on the other hand, can withstand winds of up to 140 miles an hour, and require much less maintenance than FEMA trailers.

It’s not clear how the conversion to cottages will affect the climate of affordable housing, should the program be successful. “It’s going to take outside-the-box thinking to get through this,” said Spellings of the housing crisis the 2005 hurricanes have created. “We’re pushing the constraints on what we thought we could do.”