This story was originally published by Verite News
A city of New Orleans panel overseeing a new multimillion-dollar affordable housing fund is calling for the city to dedicate the lion’s share of the fund, called the Housing Trust Fund, to small, multifamily affordable developments — arguing that it will be the fastest way to bring more housing online at a time that the city needs tens of thousands of affordable units.
The recommendations came as part of the Housing Trust Fund Advisory Committee’s annual report, which committee members presented at a meeting on Friday (Sept. 26).
Last year, New Orleanians overwhelmingly voted in favor of establishing the Housing Trust Fund, dedicating at least two percent of the city’s annual general fund to affordable housing initiatives beginning next year. The ordinance required the city to use that funding toward three defined purposes: supporting affordable homeownership, increasing the supply of affordable rental units and preserving the affordable rental units that already exist.
The allocation to the fund is expected to come to about $14.6 million next year, based on an estimated general fund budget, of which about $12.5 million will go to housing. (The remainder will pay for administrative costs and a rainy day fund.)
The committee, which is made up of affordable housing advocates, city officials and community representatives, recommended using one-third of that money, approximately $4.1 million, for homeownership programs. They recommended splitting that money between subsidies to support the construction of new owner-occupied affordable homes and a roof rehabilitation program to help lower-income homeowners fortify their roofs and, hopefully, lower their property insurance costs as a result.
They recommended dedicating the other two-thirds of the money, approximately $8.2 million, to programs supporting the expansion of rentals across the city, with $6.3 million going toward subsidies to help developers build or substantially rehabilitate small multifamily affordable buildings – that is, buildings with two to four units.
According to the annual report, the committee chose that route because larger developments dedicated to affordable housing would require larger subsidies than what the Housing Trust Fund has available. Committee members believe that prioritizing small multifamily affordable housing will bring more units online more quickly.
“Because of recent zoning changes, these can be built as a fourplex or as two duplexes on the same lot, and they can be built by right,” said Maxwell Ciardullo, former policy director at the Louisiana Fair Housing Action Center and one of the advisory committee’s two co-chairs. “So that means without zoning changes, without a conditional use, and that makes it move a lot faster, and that was a big factor for us in choosing this program.”
Though they chose not to recommend allocating money to larger-scale developments, committee members said that they were still a key part of the affordable housing landscape. The New Orleans City Council will ultimately decide how the funds will be used – based on the committee’s recommendations.
“Despite not proposing [Housing Trust Fund] funding for larger, multifamily developers, the Committee stands strongly in support of these developments and the integral role they play in our affordable housing ecosystem,” the report said.
Ciardullo also said that they recommended the minimum allocation to rental preservation as required by city ordinance because the New Orleans Office of Community Development is set to announce its own $5 million rental preservation program next week. The council could reshuffle the trust fund money to allocate more money for rental preservation should anticipated federal funding for the Community Development program fall through.
The meeting also provided a crucial update on an $8 million shortfall in gap-financing funds in the Office of Community Development. According to Tyra Johnson Brown, the director of housing policy and community development, the city has worked to cover that shortfall.
“All of the gap financing projects are moving forward… and going to closing,” Brown said, noting that the city administration and council worked together to close the gap.
“This was a serious challenge that we wanted to make sure that the council and the administration dealt with, because these are hundreds of affordable housing opportunities that will take several years to get started, but if we don’t get moving on them, then we won’t have them,” Andreanecia Morris, the other co-chair of the Housing Trust Fund Advisory Committee, said.
Their recommendations will now go to the New Orleans City Council, which will review and potentially modify them. After that, it will come back to the Housing Trust Fund Advisory Committee to accept or further change the recommendations before sending them back to the council for a final review before allocating the funds.