Louisiana Plan Focuses on Housing for Renters

Offering a welcome incentive to many displaced Louisiana residents who want to return home, Gov. Kathleen Babineaux Blanco announced a $3.5-billion proposal Tuesday to rebuild the state’s storm-damaged rental property.

Before hurricanes Katrina and Rita, more than half of New Orleans residents rented their homes. Katrina destroyed 70,000 rental units throughout Louisiana, along with 120,000 owner-occupied properties, according to state statistics.

Using requested federal funds, Blanco’s proposal calls for $1.75 billion in community development block grants to be used to rebuild rental units owned by small landlords and to develop mixed-income rental communities.

An additional $1.7 billion would be used to attract private investment through low-income housing tax credits.

“Working families are the backbone of this, and any other, city,” Blanco said, as she stood in front of a mixed-income rental complex in New Orleans’ Lower Garden District. “For this recovery to succeed, we must bring our working families home.”

Blanco earlier proposed a $7.5-billion homeowners’ recovery program that would offer homeowners as much as $150,000 in nonrefundable grants for rebuilding, or to sell their houses to the government.

Andy Kopplin, executive director of the Louisiana Recovery Authority, said introduction of Blanco’s proposals to help renters and homeowners depended on Congress signing off on President Bush’s recommendation to allocate $4.2 billion in housing aid to Louisiana. The funds were included in the president’s recent supplemental budget request.

Community activists said they hoped that Blanco’s rental market recovery plan would help allay concerns among displaced low-income and African American residents -- who comprised the bulk of New Orleans’ rental market -- that they were being discouraged from returning. Until now, no comprehensive plan had existed to restore rental units.

“It will send a very good message about how we feel about the residents who were here before Katrina,” said Tanya Harris, a community organizer for ACORN, an advocacy group for low- and moderate-income residents.

However, she said, “the most important thing is that you have affordable rental units and you don’t have price gouging.” Rents for some properties have doubled since Katrina, she said.

Under the rental unit rebuilding plan, small landlords -- who typically own fewer than eight properties -- would compete for so-called soft second mortgages, with no interest payment, said Kopplin, the housing official. The loan would be held by a state housing trust.

Although not free money, “it’s a substantial discount,” Kopplin said.

To qualify for the program, landlords would have to agree “to keep rents reasonable,” Kopplin said. He explained that prices would be based on an area’s median income. In affected neighborhoods of New Orleans, the maximum rent would probably be $460 to $600 a month.

“This whole program is intended to make sure there is available housing at affordable rents for citizens of Louisiana,” Kopplin said. “It’s very clearly a subsidy whose beneficiary is renters.”

He added that, under legislation recently adopted by Congress, Louisiana expected to receive 16 times the amount of low-income housing tax credits it normally received over the next three years.

Blanco said $600 million of the $1.75-billion community development block grant funds and the federal housing tax credits would be used to encourage developers to create mixed-income communities, which were “key to avoiding creating large pockets of properties of poverty.”

The governor also proposed using $75 million of the block grant to offer other incentives to developers, such as a special loan program and money to prepare flood-ravaged land for building.

An additional $75 million would pay for support services for elderly and disabled people affected by the hurricane, Blanco said.

Tami Frazier, press secretary to New Orleans Mayor C. Ray Nagin, said the city’s top elected official supported the governor’s efforts to rebuild communities.

Sharese Jones, 27, a resident of the mixed-income complex where Blanco spoke, said she was not impressed by promises to assist poor renters.

The mother of a 5-year-old daughter, she pays $165 a month rent, and said she had recently been served a 30-day eviction notice for having the volume on her television up too high. But she said she thought the landlord’s real motive was to rid the complex of its poorer residents.

“It’s like everybody’s who’s low-income back here is being picked on,” Jones said after Blanco’s address.