A bill that would have barred New Orleans from requiring developers to reserve some housing units for low-income residents was killed in a state House committee Tuesday, a defeat for developers who had aggressively lobbied for its passage.
The House Commerce Committee voted 7-8 on a motion that would have passed Senate Bill 162 on to the full House.
Had the bill by Sen. Conrad Appel, R-Metairie, become law, it would have made moot a plan by Mayor Mitch Landrieu to require “inclusionary zoning,” the formal term for set-asides for low-income residents.
It would also have halted any exploration of the concept in other cities around the state.
But a House committee majority of mostly Democrats stressed the argument that local governments should be able to create such policies without state interference.
“Why are we trying to usurp the local power to do this?” asked Rep. Cedric Glover, D-Shreveport, a former mayor of that city.
And the lone Republican to oppose the bill, Rep. Robert Shadoin, R-Ruston, seemed concerned that passing the bill might leave cities in need of cheap housing with few alternatives other than to ask the cash-strapped state for financial help.
"What’s that going to cost Jane and Joe Q. Public in Louisiana?” he said.
The debate began in New Orleans almost a year ago, shortly after Landrieu unveiled a five-year plan that touted inclusionary zoning as one way to increase the supply of affordable housing in the city.
The plan was intended to bring New Orleans in line with a controversial U.S. Department of Housing and Urban Development rule that cities must work to foster racial and class integration in their neighborhoods if they want to continue to receive federal funding.
And earlier this year, the City Planning Commission voted to recommend requiring that 12 percent of the units in certain developments be set aside for low-income tenants for between 50 and 99 years.
The rule 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.
Projects with between five and 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.
The City Council has yet to vote on that proposal.
Still, Jon Luther of the Home Builders Association of Greater New Orleans and other critics appealed to Appel to try to fend off such a requirement. They said such plans discourage development, haven’t been effective when used in other places and infringe on property owners’ rights.
The arguments were enough to win easy passage for Appel's bill in the full Senate. But they weren't enough to get it out of the House committee Tuesday.
Those voting for the bill were Reps. Reid Falconer, R-Mandeville; Stephanie Hilferty, R-Metairie; Chris Leopold, R-Belle Chasse; Kevin Pearson, R-Slidell; Stephen Pugh, R-Ponchatoula; Thomas Carmody, R-Shreveport; and Jean-Paul Coussan, R-Lafayette.
“I would hate to de-incentivize investment in our communities because we are trying to meet some social goal,” Falconer said.
Chris Kane, an attorney for the Home Builders Association, said the New Orleans plan would let the city take something of value away from a developer — the money he would make if every unit he builds is rented at market rate — for the use of a private person or entity, the low-income tenant. Kane said that runs afoul of the state constitution.
But Rep. Helena Moreno, D-New Orleans, replied that developers aren't obligated to build in New Orleans. Glover said lawyers could work that issue out later.
Those two were joined by six others — Reps. Kenny Cox, D-Natchitoches; Patrick Jefferson, D-Homer; Rodney Lyons, D-Harvey; Edward Price, D-Gonzales; Eugene Reynolds, D-Minden; and Shadoin — who agreed that cities and parishes should be allowed to use varied strategies to address their need for affordable housing.
“We absolutely believe that the decision should lie with local government,” said Monika Gerhart-Hambrick of Baton Rouge’s Office of Community Development,
Baton Rouge Mayor Sharon Weston Broome’s administration is exploring a mandate similar to the one pending in New Orleans, she added.