New Orleans seeing a drought of stimulus funds

Four years after Hurricane Katrina, recovery for New Orleans and many places in the Gulf Coast has not happened for many families devastated by the deadly storm. Recent articles in the New York Times and in Brad Pitt-focused magazine cover stories would have us believe that all is well and on track for hurricane survivors, but quite the opposite is true, especially for low-income residents.

Over 200,000 homes were destroyed in Louisiana alone after Katrina, 80,000 of which were rental units and 46,000 of which were rented at affordable rates. A June 30 study by the Greater New Olreans Community Data Center shows that there are 31 neighborhoods in New Orleans that have less than 75% of the active residential addresses it had before June 2005 before Katrina. Nine of those neighborhoods have less than 50%, including the B.W. Cooper, Florida and St. Bernard neighborhoods where major public housing developments were located.

Despite New York Times writer Dan Baum’s assertion that “all the old neighborhoods are in tact — even the Lower Ninth Ward,” that neighborhood has actually only recovered 19% of its active residencies — 1,017 today compared to 5,363 in June 2005. It is simply too early to claim recovery victory in New Orleans, and those who do so are ignoring the thousands of low-income families who are still waiting for sustainable housing.

Close to 3,500 families were recently threatened with eviction from the FEMA mobile housing units that many of them had occupied since the big storms. President Obama interevened at the last second with a plan to sell the units to families at $1 or $5, and $50 million in housing vouchers for renters. But this completely overlooked the fact that those mobile units, which were already stretched beyond their shelflife, are temporary living quarters and were not built for permanent stay. And families can’t use vouchers if there are no apartments or affordable houses in which to use them.

The insurance and maintenance expenses of housing that does exist in New Orleans, not to mention the costs of new housing units, are inflated far higher than before Katrina. The GNODC reported on June 23 that 47% of New Orleans households – compared with 36% of U.S. households – are paying more than 30% of their income in living costs. Renters in New Orleans are using 60% of their income for housing expenses. This places housing far above affordability levels for those still trying to transition from displacement from the hurricanes.

Affordable housing developers haven’t been able to attract adequate capital investment to produce all the units needed to accommodate low-income families. The recent finance and foreclosure crisis exacerbated these problems. This was a huge issue before Katrina crashed as there were already over 300,000 families across Louisiana in need of affordable housing before the storm, according to the Louisiana Housing Finance Agency.

The LHFA wants to help those developers by converting their Gulf Opportunity Zone low income housing tax credits into cash grants through the American Recovery and Reinvest Act’s tax credit exchange program. However, the Treasury department recently determined that all low income housing tax credits (every state gets an allocation of these from the federal government) were eligible for this ARRA provision except the GO Zone tax credits. That means that New Orleans, the very region of America that needs affordable housing the most and has needed it the longest won’t benefit from this stimulus bill provision.

This is not recovery by any stretch of the imagination. The housing problem affects jobs. How does one sustain employment if they have nowhere to live or two-thirds of their check is going to rent and utilities? Unemployment and lack of housing is what breeds crime and blight — not exactly what you’d call “neighborhoods in tact.”