Developers of a mixed-use project in Mid-City want to drop plans to include 14 affordable apartments in the 382-unit complex and instead create a $644,000 revolving loan fund to help lower-income aspiring homeowners buy homes elsewhere in the same part of the city.
The proposal got a mixed reception Thursday from the City Council. While proponents, including Councilwoman LaToya Cantrell, argued the loan fund would do more to aid affordable housing in the city than the proposed rental units would, other council members raised concerns the switch is designed to keep poorer residents out of the project itself.
The project, proposed by businessman Sidney Torres IV and the development group Edwards Communities, calls for two four-story residential buildings along the Lafitte Greenway near North Carrollton Avenue.
The proposed complex would be denser than zoning rules would typically allow, but it won a recommendation for approval from the City Planning Commission because of policies that allow greater density to projects that include affordable housing.
The council voted 5-2 Thursday to move the development forward, with Councilmen Jason Williams and James Gray voting against it. It must come before the council for a second vote in a few weeks.
City planners are recommending approval for a mixed-use development proposed by businessman …
The tension over the issue comes with an interesting political twist in that it put Cantrell and Williams, both of whom are widely expected to run for mayor next year, on opposite sides of a project being put forward by Torres, also considered a likely contender in the race.
The new plan came out of negotiations between Cantrell and Councilwoman Susan Guidry, whose districts each include a portion of the site, and the developers, who argued the project wouldn't be feasible with the affordable units included.
Instead, a one-time investment in the loan program made more financial sense, said Mike Sherman, a lawyer representing the developers.
"If we don't act and act soon" on affordability in Mid-City, "we'll create another neighborhood like the (Irish) Channel or like Lakeview that's not affordable," Cantrell said.
But Williams, Gray and Councilwoman Nadine Ramsey all raised questions about the decision not to include any affordable housing in the project itself.
"The idea of having this Lafitte Greenway is a beautiful concept, but when we touted it, we touted it as being accessible to everyone," Williams said. "I'm curious as to why the developers don't want to incorporate affordable units into the project."
Gray also said he doubted that keeping the rent low on 14 units out of nearly 400 would be enough to sink the project.
But proponents argued that helping residents afford a home of their own would help them build equity and wealth, beyond just providing them with a place to live.
It's "a creative way to incentivize and increase the affordability," Guidry said. "We are looking at the difference between having people rent (affordable units) in the complexes ... versus being able to buy."
Under the proposal, the revolving loan fund would be administered by Liberty Bank and would be available to those looking to buy a home in Mid-City who make between 60 percent and 80 percent of the area's median income. That means a yearly income of no more than about $48,000 for a family of four.
If evenly split, the fund would provide about $46,000 in assistance to 14 families as a "soft-second mortgage," essentially a grant.
That money would be used toward down payments and other costs of buying a home. Unlike other soft-second mortgage programs, the payment would not be forgiven over a period of years. Instead, it would stay with the property and be repaid if the house is sold, putting money back into the fund that could be used to aid other buyers, Sherman said.
The proposal is an unusual one that doesn't fit neatly in the existing policies for allowing projects that contain more housing units than allowed by the city's zoning rules. That raised some concerns with City Hall officials, including City Attorney Rebecca Dietz and Planning Director Bob Rivers.
They warned that the City Council would have to take the responsibility for granting a waiver from some density restrictions by certifying it met nine criteria, including one saying that the profitability of the project was not a factor in the decision.