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Redeveloped into mixed-income, affordable housing, the Sacred Heart at St. Bernard project opens during a ribbon cutting ceremony in New Orleans, La., Thursday, Oct. 18, 2018. Located on the site of the former Sacred Heart Church, the project creates six rental units and a community room inside the church, as well as 53 one- and two-bedroom units located in a new four story building next door. The property was co-developed by Providence Community Housing and Columbia Residential.

After almost three years of debate, a unanimous New Orleans City Council passed new zoning regulations Thursday aimed at addressing a citywide shortage of affordable housing.

Under the rules, which some housing advocates said do not go far enough, developers in the Central Business District, French Quarter and a few other in-demand neighborhoods will be required to build lower-cost apartments as part of any new large multifamily residential buildings.

But the developers will receive incentives, such as a reprieve from other restrictions on the required number of parking spaces or the number of units they can build at one location.

The regulations will likely produce at least a few dozen affordable units a year, according to consultants City Hall hired. That is far less than the thousands that advocates say are needed and the hundreds that city officials hoped might be created when the idea for these new rules was first hatched.

Meanwhile, some developers said the rules will hinder new housing construction because the cost of including low-rent units would make some developments prohibitively expensive.

Still, officials praised the plans Thursday as a partial solution to the problem of longtime residents being priced out of neighborhoods that are closest to jobs, public attractions and other opportunities.

While the plan isn’t a silver bullet, “it is certainly a bullet in the revolver,” Councilman Jason Williams said.

Since 2016, city officials have considered whether imposing new requirements on developers could help slow a boom in the construction of high-end apartment buildings in formerly less expensive areas like Bywater, Marigny and the Lower Garden District.

So-called inclusionary zoning, or requiring that a certain share of new residential construction be affordable to low- and middle-income residents, has been used in various jurisdictions across the country since the 1970s.

Critics say it has not produced a substantial number of units over time and in some cases has made affordable housing shortages worse.

Advocates, however, say it can be used to preserve affordability in rapidly gentrifying areas, and to break up pockets of deep poverty, when paired with the appropriate incentives.

That's needed, they say, in a city where home sale prices have risen by nearly a third since 2015, according to a market analysis commissioned last year by the city, and where thousands of residents whose wages haven't kept pace are at greater risk today of being priced out of desirable housing than they were seven years ago. 

The City Planning Commission, at the behest of the council, rolled out the first set of recommendations for a local policy two years ago. It called for setting aside 12 percent of housing units in new or substantially renovated developments in the CBD, Mid-City, Marigny and other areas for lower-income people.

Developers said that would kill new development in the city. They persuaded state lawmakers to strip local governments of the right to implement the concept. 

Gov. John Bel Edwards intervened with a veto last year. But he told Orleans and other urban parishes to pass rules implementing the idea before the Legislature reconvenes this year or he would let the ban on inclusionary zoning become law.

Mayor LaToya Cantrell’s administration last year hired HR&A Advisors and Urban Focus LLC to study the issue. They concluded that developers in the CBD and French Quarter could reasonably be expected to reserve one of every 10 units for low-income residents, given the strength of the market in those areas.

The consultants said developers in Bywater, the Lower Garden District, Marigny, Mid-City, Uptown and Treme could handle reserving only one of every 20 units for such residents.

Developers everywhere else should be encouraged but not required to set aside affordable units, they said.

The rules passed Thursday rely heavily on those conclusions and tie the zoning designations assigned to those neighborhoods with the recommended incentives, said John Pourciau, Cantrell’s chief of staff. 

Low-income residents are defined as those who earn no more than $30,000 a year, or 60 percent below the area’s median income.

Affordable housing advocates praised the new rules but urged the city to go further. One request was to extend the requirement of one affordable unit for every 20 market-rate units to more neighborhoods.

“Please don’t let this languish half-done, as our people are being displaced,” said Maxwell Ciardullo of the Greater New Orleans Fair Housing Action Center.

But Jon Luther of the Homebuilders Association of Greater New Orleans, a group that represents at least 1,100 builders and developers, said even the requirements passed Thursday will be difficult pills for his members to swallow.

“The math does not pencil out for any of my members on a mandate such as this, and it hasn’t penciled out for over 40 years where this has been applied elsewhere in the country,” he said.

There are more steps in the process before the rules can take effect. The City Planning Commission must hold a public hearing on which incentives to offer developers for their efforts and how much developers should have to pay the city if they choose to opt out of the requirements. 

The consultants have recommended an opt-out fee of $291,000 for rental units and $366,000 for for-sale units.

The council must also approve maps that clearly outline where the rules will apply. 

"This policy will not automatically transform the city’s housing stock so that it is no longer unaffordable," Pourciau said. But it is "one of the tools in the toolkit for making sure we can deal with the affordable housing crisis in the city."


Follow Jessica Williams on Twitter, @jwilliamsNOLA​.