Having grown up in Georgia's version of Vacationland, I say again and again there are plenty of ways to mitigate this that never, ever get past the surface conversation of "gentrification" and "hipter hating." The first and foremost policy issue is and will always be property taxes. How in the world is NOLA selling properties at these values and still running a shoestring budget with less than standardized services? Because property taxes are currently set in this city in a way that rewards both speculation on blighted or underutilized property and ownership of second, vacation homes. The city cuts huge tax breaks to out of town business that move here. Meanwhile, a lot of homeowners are getting clobbered on property taxes, which means that only folks with deep pockets have enough start up capital to own homes, and if they own more than one home, they have to charge a whole lot in rent. Unravel that monster and rearrange the priorities and incentives, and a whole lot of these gentrification issues become much more manageable.And here is what happened at yesterday's City Council budget hearing.
This is pretty much the city's "boutique strategy" in action. Anyone who has been paying attention since roughly ten days after Katrina will recognize it.The New Orleans City Council started its 2014 budget hearings Wednesday with the fundamentals: the proposed tax collections and revenue estimates that are the basis for Mayor Mitch Landrieu’s $504 million general fund proposal.Landrieu’s budget would keep the city’s property tax rate steady next year, though city economist James Husserl predicts collections will increase modestly to $114.9 million, from $111.6 million currently forecast for 2013. But the 2014 figure is still below the $115.7 million that appeared in the 2013 budget as originally passed.Councilwoman Stacy Head said the city’s budget relies too much on property taxes. Collections have increased steadily over the past decade, even as the city has shrunk. The Landrieu administration increased property tax rates in the 2011 budget, and assessments have risen sharply in recent years.“There is a smaller population than we had in 2005 that is paying $40 million more in property taxes,” Head said. “I firmly believe that there is an overburdening of taxation among a smaller group of people.”Though the city has about 70,000 fewer people than it did pre-Katrina, property tax collections in the budget proposal are up 38 percent, from $83 million in 2005. The increase in property tax collections accounts for nearly all of the increase in the general fund budget, which has gone up from about $466 million in 2005 to next year’s proposed $504 million.
A few blocks from Mr. O'Dwyer, in an exclusive gated community known as Audubon Place, is the home of James Reiss, descendent of an old-line Uptown family. He fled Hurricane Katrina just before the storm and returned soon afterward by private helicopter. Mr. Reiss became wealthy as a supplier of electronic systems to shipbuilders, and he serves in Mayor Nagin's administration as chairman of the city's Regional Transit Authority.
When New Orleans descended into a spiral of looting and anarchy, Mr. Reiss helicoptered in an Israeli security company to guard his Audubon Place house and those of his neighbors.
He says he has been in contact with about 40 other New Orleans business leaders since the storm. Tomorrow, he says, he and some of those leaders plan to be in Dallas, meeting with Mr. Nagin to begin mapping out a future for the city.
The power elite of New Orleans -- whether they are still in the city or have moved temporarily to enclaves such as Destin, Fla., and Vail, Colo. -- insist the remade city won't simply restore the old order. New Orleans before the flood was burdened by a teeming underclass, substandard schools and a high crime rate. The city has few corporate headquarters.
The new city must be something very different, Mr. Reiss says, with better services and fewer poor people. "Those who want to see this city rebuilt want to see it done in a completely different way: demographically, geographically and politically," he says. "I'm not just speaking for myself here. The way we've been living is not going to happen again, or we're out."
Reiss didn't have to go Galt after all. While New Orleans continues to experience profound income inequality eight years later, in absolute terms, there are certainly "fewer poor people" living here.
So from the James Reiss perspective, things are going great. Only, for some reason, the city is still broke. Stacy Head sees this and thinks the problem is we're collecting too much in property tax revenue. But, if the boutique city really is booming the way the realtors say it is, doesn't seem instead like we aren't collecting enough?