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The real Smart Housing Mix is not voluntary

Posted on 22. Jan, 2019 by

American Can tenants rally against evictions in 2016. The City of New Orleans provided $29 million in subsidies to the developer, but tenants in the affordable units were still displaced. (Photo credit: WGNO.com)

While there’s no debating that New Orleans is in the grip of an affordable housing crisis, there are still some people arguing that more give-aways to real estate developers will somehow correct the problem.

Let’s be very clear: including affordable housing in every new housing development or renovation must be the law, not an option and not voluntary. Developers have proven with their inaction that they will not voluntarily be a part of the solution.

Fair market rents have risen by 50 percent since 2000 while wages remain stagnant, and there are currently 35,000 people on a waiting list for subsidized housing. Even though the City Council previously offered developers voluntary incentives to hold some apartments affordable to average worker, developers haven’t taken advantage of it. That’s why the City Planning Commission (CPC) staff argued in their 2017 study that New Orleans needs the Smart Housing Mix ordinance, which would require apartment and condo developers to include affordable units in their new buildings. The study cited 500 jurisdictions with similar policies before recommending a balanced approach of mandating affordable units while also offering zoning or tax incentives for developers to build these units.   

Only Initiative 2 is mandatory

In August the Council directed the CPC staff to provide text amendments to the Comprehensive Zoning Ordinance, which sets the rules and regulations for all property development in New Orleans, in order to add in three potential Smart Housing Mix initiatives. While all three initiatives were described as “mandatory,” only the second initiative really is.

Here’s a quick breakdown of the three initiatives:

  1. Establish a mandatory inclusionary zoning overlay district. This would create zoning requirements for including affordable units in certain parts of the city where there are shortages of these units. But this initiative would only be mandatory if a developer wanted a zoning change. So if a developer wanted to build market rate apartments and didn’t request a zoning change, then the project would go forward without any affordable units.
  2. Create a new mandatory inclusionary base zoning district. This initiative is the real Smart Housing Mix. If passed, it would allow the City Council to create a new zoning district and maps in certain areas of the city, making it mandatory that ALL new construction or rehabilitation projects of 10 or more units include homes affordable to the average worker. The Council would first vote on what percentage of units would be affordable and what incentives to offer developers. They would then take a second vote on the maps where the new policy would apply.  
  3. Create a mandatory inclusionary zoning planned development classification. This initiative would allow for flexible zoning regulations for large development projects that include affordable housing. This is an excellent initiative for developers who are already planning on affordable units, because it could mean a faster approval process. However, a developer can still go forward on a project without any affordable component. The project would simply have to follow normal zoning regulations.

Initiatives one and three should really be considered voluntary, because both would allow developers to build projects without any affordable units as long as they weren’t seeking a zoning change or flexible regulations. The 2017 CPC study concluded that only initiative two—the Smart Housing Mix—with its mandatory inclusion of affordable units, will effectively produce the homes that our people need to continue calling New Orleans home. 

The CPC recently completed its work, and the next step will be for the City Council to vote on the three initiatives. If you want the Smart Housing Mix to truly be effective, please call your Councilmember today and tell them that we can only fix the mix if initiative two is passed.  

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