A proposed state law that could scuttle New Orleans’ plan to set aside a portion of the homes in new developments for low-income residents is moving through the Legislature, to the dismay of critics and relief of proponents.
The measure, Senate Bill 162, passed the Senate by a vote of 29-9 on May 8 and is scheduled to be considered in a House committee Tuesday, one of its last stops before final passage.
The bill's sponsor, Sen. Conrad Appel, R-Metairie, says Mayor Mitch Landrieu’s plan to require “inclusionary zoning” in the city, the formal term for low-income set-asides, will discourage development.
“By using a mandate, you change the relationship with the developers,” he said. “It makes projects uneconomical. They don’t work.”
The housing advocates who back the mayor’s plan say it's needed to help remedy an affordable housing crisis. They say requiring low-income units in new developments is a crucial tool for New Orleans and other cities that could see federal aid for low-income housing dry up, should President Donald Trump’s proposed budget pass in Congress.
“This is one solution to a myriad of problems that we have, and we can’t afford to ignore it,” said Andreanecia Morris, of Housing NOLA, an advocacy group that has long backed the plan.
The set-aside requirement in New Orleans would apply to new or significantly renovated projects that include 10 or more housing units in specified, mostly well-to-do neighborhoods, including the Central Business District, Lakeview, Mid-City, Marigny, Bywater, Algiers Point, Uptown and parts of Gentilly. Developers would have to reserve at least 12 percent of the units in their properties for low-income tenants.
Projects with five to nine units would instead pay a fee to the city that would be used for housing programs. Projects with fewer than five units would be exempt.
Developers would be required to keep the low-income units affordable for between 50 and 99 years, the City Planning Commission suggested earlier this year.
While the City Council has yet to vote on the proposal, it fulfills a pledge that Landrieu made last year as part of his five-year affordable housing plan and is in line with a plan the city submitted to the federal government.
Seeing that adoption of the plan was almost certain in New Orleans, Jon Luther, of the Home Builders Association of Greater New Orleans, turned to Appel earlier this year, seeking a state law to bar the plan.
“To date, we don’t feel like we’ve had a real seat at the table in New Orleans specifically,” Luther said.
Luther has long said that similar set-asides have done little to foster the kind of affordable housing stock their proponents claim to want. And Appel, echoing that sentiment, said the city would do better to simply offer incentives for such development, as it has done for years.
The argument — made by Morris and echoed by Maxwell Ciardullo, of the Greater New Orleans Fair Housing Action Center — that Trump’s budget could end federal support for low-income housing “is phony,” Appel said.
“Presidents' budgets are never passed,” he said of the document that would slash the U.S. Department of Housing and Urban Development's budget by more than $6 billion, or 13 percent.
Ciardullo, though, pointed out that federal housing money in general has been cut significantly since 2010. He also questioned why a debate about a New Orleans policy shouldn’t be resolved in New Orleans.
“Given the drought of federal and state resources, it seems incredibly unproductive to also stand in the way of local governments that are coming up with their own innovative housing solutions," Ciardullo said.
The House Commerce Committee is due to consider the bill at 1 p.m. Tuesday.