REGIONAL REPORT

SOUTH CENTRAL

Southern Promises

BY DANA ENFINGER

AFFORDABLE HOUSING FINANCE • MARCH 2008

NEW ORLEANS — Two-and-a-half years after Hurricane Katrina, many who called New Orleans home continue to live in trailers tainted by formaldehyde or with relatives in California or in apartments in Houston or in dark cracks where they have slipped unknown into the American landscape. The population of the Big Easy at the end of 2007 was between 200,000 and 280,000. Before Katrina, the city boasted 450,000 residents.

The New Orleans City Council vote last December to demolish about 4,500 public housing sites caused pandemonium. Adding more pressure to the cooker, a bill that would assist in providing affordable housing to those affected by the 2005 hurricanes (the Gulf Coast Recovery Act of 2007) is largely absent from the discussion at presidential debates. Many still without permanent housing are wondering how long they will have to weather this uncertain storm.

Social service groups have estimated that 12,000 people are homeless in New Orleans—about double the number of homeless before the storm (6,300). More than 900 households currently live in contaminated trailers provided by the Federal Emergency Management Agency (FEMA) in New Orleans, and thousands more in FEMA trailer parks across Louisiana must vacate their makeshift homes, as sites are closing earlier than promised due to serious environmental concerns.

The plan for Lafitte

Developers have come into the city to help the Department of Housing and Urban Development (HUD) with its controversial plan for mixed-use, mixed-income development for New Orleans that HUD said it was committed to before the storm.

“We will build more units total than what’s on the Lafitte site today when all is said and done,” said Doris Koo, president and CEO of affordable housing financier Enterprise Community Partners.

Enterprise and nonprofit Providence Community Housing, a development corporation sponsored by a number of local faith-based organizations, have partnered on rebuilding at the Lafitte complex, one of the four public housing sites to be demolished.

The duo will also oversee development at a number of sites that are located in the surrounding area known as the Tremé neighborhood, the oldest African-American community in America. The area is famous for its great jazz venues and museums.

The plan for the Tremé/Lafitte community calls for a total of 1,044 units of affordable rental housing. Just shy of half of those units (520) will be located on the site of the former Lafitte complex. The remaining 524 units will be located in areas surrounding it. Since the former development contained 865 units, the Enterprise/Providence project would create 179 new rental units.

In keeping with the mixed-income missive, the plan also calls for 600 new homes. Most of the homes will be located in Tremé, while 144 of them will be built on the Lafitte site. Forty of the homeownership units (or 15 percent) will be available for households earning up to 80 percent of the area median income (AMI). The remaining will be available for residents earning more than 80 percent of the AMI. For the scattered sites in Tremé, Enterprise bought as many parcels of land as it could from the city, community groups, and private individuals, said Chickie Grayson, president and CEO of Enterprise Homes, which is heading the development of the homeownership portion.

Grayson said she went to Houston to speak to many former residents from Lafitte and the local community to get their input on the new project. Residents were either bussed or flown in from a number of cities to New Orleans to talk with Enterprise and Providence about the site plan.

“Over and over, residents told us, ‘We just want to be normal. We want to live in a place free of crime, with Internet access, community centers, and playgrounds,’” said Koo. “That’s not too much to ask for.”

Enterprise and Providence reported that they contacted at least 650 Lafitte families by phone and met with residents regularly over a period of 15 months, shortly after receiving the redevelopment contract from HUD and HUD-run Housing Authority of New Orleans (HANO).

Koo responded to critics of the redevelopment of Lafitte.

“We have pledged for no net loss of subsidized units. There have been cases where people have used ‘urban renewal’ as an excuse to get rid of poor people and not let them come back,” Koo said. “Our development is about equitable redevelopment, meaning that this is not a scheme to gentrify and kick people out just to bring in market-rate units.”

Grayson said HUD and HANO have committed to repairing 100 to 200 units. Residents were to live in these repaired, temporary units as redevelopment occurs on the rest of the site. Repeated calls to HANO concerning the temporary housing of former residents while demolition and rebuilding occurs at Lafitte and the three other developments—St. Bernard, C.J. Peete, and B.W. Cooper—were not returned. At press time, redevelopment plans were not known at these three developments.

Some developments taking shape

Milton Bailey, president of the Louisiana Housing Finance Agency, said that the four redevelopments would be receiving $34 million in low-income housing tax credit (LIHTC) equity through the Gulf Opportunity Zone Act. He said that equity has a market value of $330 million.

A number of additional LIHTC projects are under way in New Orleans, Bailey said. Developer David Miller is converting the Falstaff brewery in the Mid-City area into 149 units, half of which are affordable. The project is nearly completed and was already accepting applications at press time, according to a posting on the classifieds Web site Craigslist. That project received $1.2 million in LIHTC equity.

Another major developer, The Domain Cos., based jointly in New Orleans and Metairie, is building three developments that target those with moderate and affordable incomes in the city. And Domain is focused primarily on the Tulane Avenue corridor that has been mostly industrial land, car dealerships, and low-rent motels.

“This short 25-block area is the ideal place to locate residential development,” said Matt Schwartz, Domain’s principal. “Tulane Avenue has some of the best transportation access in the city, and it’s close to downtown.”

This area is the focus of officials who want to diversify New Orleans’ economy beyond tourism and leisure to include medical and biotechnology industries. A new medical complex, a joint center for Louisiana State University and Veterans Affairs, is slated to be built in the Tulane Avenue area. The complex is expected to create a total of 10,000 jobs, according to a release from the Louisiana Recovery Authority.

Domain is developing The Meridian, a 72-unit community near the intersection of Tulane and S. Jefferson Davis streets. All the units are for households maxing out at 60 percent of the AMI. New York City-based Centerline Capital Group will provide $15.7 million in LIHTC equity. Additionally, Centerline will provide a $1 million permanent mortgage loan through Freddie Mac. Bank of America provided a $1 million construction loan.

Domain is building two additional projects in the Tulane Avenue corridor: Crescent Club (228 units) and The Preserve (183 units). Forty percent of units in each complex will be set aside for households earning no more than 60 percent of the AMI. Centerline is providing a combined $36.9 million in LIHTC equity, and the projects are receiving a combined $35.6 million in Community Development Block Grant funds. All three of the developments are expected to be completed by November or December of 2008, said Schwartz.

Actor Brad Pitt has contributed his star power and $5 million to build affordable, eco-friendly homes in the Lower Ninth Ward in an initiative called Make It Right. The actor has partnered with philanthropist and film producer Steve Bing. Pitt has called for more donations for the cause.

With the need for affordable housing already at critical mass before the storm in the city, and the discord and confusion that continues two-and-a-half-years later, it remains to be seen whether the housing going up and additional housing initiatives will be enough to bring back low-income New Orleanians to a city in which half the residents were renters before that fateful morning of Aug. 29, 2005.