The Louisiana agency that helps fund affordable housing developments across the state has revised its annual spending plan amid accusations from New Orleans housing advocates, developers and, most recently, Mayor Mitch Landrieu that the agency prioritized rural parishes over urban ones.
Removed from the Louisiana Housing Corp.’s latest plan for doling out housing money is a special consideration the agency long gave to "rural projects," meaning those in smaller cities and less populous parishes.
However, the agency added another set-aside for areas that receive one type of federal housing grant New Orleans does not get. In addition, yet another benefit for rural areas, one that reserves a quarter of the total money available for housing in those areas, was left untouched.
At issue is the LHC’s annual plan for awarding federal low-income tax credits to developers, a key financing source for low-income housing. A developer benefits from the highly sought-after credits by selling them to an investor, who agrees to finance a housing project in exchange for a federal tax break over 10 years.
The Louisiana agency that helps fund affordable housing projects across the state is taking …
A spokesman for Landrieu, who fired off a letter to Gov. John Bel Edwards recently that urged the LHC to make revisions in its spending plan, cast the agency's first policy change as a victory for New Orleans, even though the mayor did not get all he asked for.
“This is a huge win for New Orleans and the result of some focused lobbying efforts by our team and partners,” spokesman Tyronne Walker said Wednesday.
However, at least one New Orleans housing advocate said the changes don’t go far enough to help the city reach its goal of providing thousands of new housing opportunities for low-income residents over the next few years.
“They hit the concerns of Baton Rouge and Shreveport, but not New Orleans,” said Housing NOLA Executive Director Andreanecia Morris of the second change, involving the federal housing grants that New Orleans does not get.
The LHC determines which projects deserve assistance through a scoring system that adds or deducts points for projects based on how well they meet certain criteria. Projects with the highest scores are the most likely to be funded.
The method has helped fund more than 100 projects in New Orleans since 2007, and the city is likely to turn to the state agency for help with future projects.
But much of the debate in recent months has hinged on the 10 extra points the agency has long awarded to "rural projects," as well as a separate set-aside for rural areas the LHC’s board approved in April.
While the agency has insisted the special treatment is warranted, as the needs of big cities like New Orleans often overshadow those of less populous areas, critics say the LHC is tipping the scales too far in favor of less populous parishes.
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Landrieu made the same argument in an April letter to Edwards. He pushed the agency to abandon the plan to reserve a quarter of the overall $10.2 million it has available for projects in rural areas, to end the 10 points for rural projects and to make other changes.
The LHC eventually agreed to ditch the extra points. LHC Executive Director Keith Cunningham’s office also agreed to review, on a case-by-case basis, whether restrictions on the total cost of projects eligible for state funding might be lifted.
That came in response to claims by Landrieu and others that it often costs developers more to build housing in urban areas than in rural ones.
“We wanted to create a little bit of flexibility in our process, to give us the ability to recognize challenges that developers have around hard costs,” Cunningham said.
But Morris noted that another 10-point set-aside was added at the last minute that gives an edge to Baton Rouge and Shreveport, but not to New Orleans.
That set-aside is for neighborhoods that receive one kind of Department of Housing and Urban Development grant aimed at revitalizing public or HUD-assisted housing, called the Choice Neighborhoods Planning Grant. New Orleans hasn't received any such planning grants in recent years.
Ellen Lee, Landrieu’s director of housing policy and community development, said New Orleans could apply for another such grant down the line, however.
And Cunningham said the added set-aside “created opportunities that would primarily exist in urban areas,” which was in the spirit of what Morris and other advocates have been pushing for.
“They still need to fight and still need to champion their cause and get those resources, and I don’t blame them for it,” Cunningham said, adding that his agency would work to address problems as they arise.