Renewal Money for New Orleans Bypasses Renters

Susan Saulny and Gary Rivlin, The New York Times
Date Published: 
September 17, 2006

NEW ORLEANS — As billions in housing aid begins to flow here in the next few weeks, most of it will go to homeowners, who have been appointed by city officials as the true architects of this city’s recovery, despite the fact that roughly half the city’s residents rented housing before Hurricane Katrina.

The renters of New Orleans, it seems, are on their own.

Rents are skyrocketing across the city, up an average of 39 percent since Hurricane Katrina. The city has announced that it plans to refurbish only a small fraction of its traditional public housing units. Some neighborhoods are campaigning to tear down sturdy apartment buildings and build parks in their place. Though some aid has been set aside for landlords, many lower-income residents who say they are unable to return have been priced out.

“I want to come back, but who’s going to help me build my life?” asked Lionel Smith, 46, a longtime resident of the Lower Ninth Ward and a driving school instructor whose apartment building was destroyed by the floodwaters. “There’s this plan in place to take care of homeowners, but I’ve heard nothing about helping renters. Where are we supposed to live? Will they help rebuild apartment buildings?”

From a renter’s point of view, New Orleans has become off-limits to all but prosperous tenants, as rents have increased significantly in the pockets of the city that did not flood. Before the storm, the fair market rent for a two-bedroom unit in the city was $676; it is now $940, according to the Brookings Institution.

Before the hurricane, it would not have been unusual to find a two-story, three-bedroom house in Gentilly, a solidly middle-class neighborhood, renting for less than $1,000 a month. Today, that area, north of downtown toward Lake Pontchartrain, does not exist as a functioning neighborhood.

By contrast these days, $1,000 might get a tenant half a refurbished duplex on a trash-strewn street in Mid-City — an area that also flooded, but not to the same extent — and it would most likely be offered without major appliances or air-conditioning.

Henry Jones, a New Orleans East homeowner, said that roughly half the owners in his subdivision, Wimbledon, were coming back, which he contrasted with the lack of activity he has observed in neighborhoods like Central City and Mid-City, where there are far more rental units than single-family homes.

“You drive around those neighborhoods and you pretty much see nothing going on,” Mr. Jones said. “It’s depressing.”

Those communities that were home to the greatest concentration of rental properties are also those areas that still lie in ruins 12 months after the storm. The longer properties languish, rotting in the humid heat, the harder they are to restore to habitable conditions. With no concrete plan in place to help landlords, a large part of the rental stock has been festering for a year now, preventing residents from returning and depleting the work force.

“I’ll confess to being frustrated,” said Norman C. Francis, the chairman of the Louisiana Recovery Authority, the agency distributing federal aid, and the president of Xavier University here. “Most of the people who need to come back aren’t homeowners at this point but renters.”

State officials acknowledged that renters were not their first priority.

“We wanted to get the homeowner assistance plan off and running, because it affects more people,” said Walter Leger, the chairman of the authority’s housing committee.

The lack of affordable rental housing is yet another factor making it more difficult for low-income residents to return. The city has also lost its extensive health care system for the poor; its school system is only partially functioning; and there is little public transportation.

In some areas, in fact, homeowners are trying to use the recovery process to rid their neighborhoods of long-standing apartment buildings that were damaged during the storm. Building parks in the place of apartments that neighbors said lowered property values is “killing two birds with one stone,” said Joseph St. Martin, an architect hired by homeowner groups in New Orleans East to work on the community development plan the city has asked every neighborhood to devise.

Unlike some other urban areas, New Orleans’s rental market was dominated by small-scale local landlords before the storm. Many say they lack the resources needed to resuscitate their properties, especially when so many of them are struggling to repair their own homes.

The Louisiana Recovery Authority has set aside $859 million to help landlords (compared with $7.5 billion that has been set aside for homeowners). The goal, officials said, is to start distributing that money in the next month or so, but they acknowledge they are still working out the details of the plan.

Officials estimate that at least 30,000 units will be improved through this program, which is expected to offer no-interest 10-year mortgages of up to $75,000 a unit to landlords who agree to rent at or below the market rate. No direct subsidies to tenants are being planned.

State officials said they would offer a combination of low-income housing tax credits and financial grants to entice larger developers to build mixed-income rental properties. In New Orleans, most large-scale developments — those with more than 200 apartments — were in the eastern part of the city. Nearly all those developments are still damaged and vacant; some are for sale, while others have been torn down.

“The impact on the renters is that the cost of renting has increased,” Mr. Leger said. “So our theory is if we can bring the cost of renting back down, we can put people back in the position they were in prestorm.”

Critics of the proposed plan say 30,000 units is not nearly enough to make a big difference in New Orleans. The Brookings Institution estimates that more than 48,000 rental units were destroyed or heavily damaged in the flood, or about 40 percent of the original stock of apartments and rental houses.

William Quigley, director of the Gillis Long Poverty Law Center at Loyola University here, said the number could even be higher, and that many of the units were occupied by low- and middle-income families.

“The state has misleadingly named its programs as ‘The Road Home Housing Programs’ despite the fact that the planned expenditures will not provide a realistic road home for most of the people with low and moderate incomes,” Dr. Quigley wrote recently in a complaint to federal housing officials.

A lack of information even 12 months after the hurricane has caused confusion and frustration.

“There is no real identifiable plan that anyone can point to that would enable people to say, ‘I can rely on this,’ ” said Jerome Anderson, an assistant dean at Tulane Law School who owns five units around the city. The storm destroyed Mr. Anderson’s home and all his rental properties, putting tremendous financial pressure on his resources to rebuild. His situation is typical among local landlords.

Mr. Anderson said he was constantly hearing from prospective tenants wanting to know when he might have apartments available for rent. “Anyone who owns property is probably being bombarded with questions as to when will their properties be available for rental,” he said. “There’s a lot of vacant property that’s not available, and that is affecting the recovery, in that people don’t have places to live.”

Ted Quant, director of the Twomey Center for Peace Through Justice at Loyola University, owned a home in Gentilly and two rental units in New Orleans East. He is part of a new group, the African American Landlords Association, made up primarily of property owners who lost both a home and rental units. This loosely knit group is pushing for both information and assistance.

“It seems that the people who were here and didn’t flood are saying to the people who flooded, ‘We don’t need you, stay out of town,’ ” Mr. Quant said. “My tenants came back and recovered what wasn’t looted. They were asking when they could come back for good. I had to tell them I didn’t know.”