Monday, December 09, 2013

"On this whole staff, only two people are from New Orleans"

Above quote is from this recent NYT piece on the local restaurant boom. But take a look at this Pacific Standard post where that article is referenced.  When we talk about gentrification in New Orleans, someone inevitably looks at the boom in cost of living and asks, "How can people from New Orleans afford this?" 

The answer, at least in part, is that they can't and they aren't.  Instead, prices are being driven up by pressures from far beyond the city limits. 
Say goodbye to authentic New Orleans.  Gentrification on a national scale is rapidly remaking the landscape. The influx from America's urban alpha dogs:
"You trying to run us out of New Orleans," she said. "Out of here. You know we can't afford $287,000."

That's what a nearby house recently sold for. High dollar for what Treme is used to, but cheap for people coming from Los Angeles or New York. And increasingly, real estate agent Eric Wilkinson said, people are.

"This is by far the most active the market's ever been, in at least the last decade," he said. "The most people moving to New Orleans, buying in New Orleans."

He says New Orleans has joined the "it" list, with cities like San Francisco and Austin, but cheaper. And those with fresh eyes have an advantage over natives.

"I mean, when you call a street Rampart, which literally means barrier, and people grow up thinking 'don't go across Rampart Street,'" he said. "Whereas people from out of town don't have those preconceived notions. It makes it easier for them to take the leap of faith."
Emphasis added. That's what I mean by gentrification on a national scale. Talent refined in New York City or Los Angeles will overwhelm parochial real estate such as the homes found in New Orleans. In essence, the source of income is untethered from neighborhood. Long-term residents don't have access to the high-paying jobs of a global labor market. Most people everywhere don't have that kind of opportunity.
Not only is the source of income "untethered from the neighborhood," the fuel that's driving the cost of living in New Orleans is practically untethered from the entire region.  And that fuel is based on a severe and static economic caste system.  And most of you are on the short side of that. 


Nolaresident said...

Belway, the Treme homeowner, holds out hope for a middle ground.

"The very things that make this city special could be lost," she said. "But it doesn't have to happen that way."

Then please stop moving here Ms Belway. Austin is way cool, why not move there?

Nolaresident said...

the city lost many of its poor families and attracted, in their stead,
what are sometimes called YURPs: Young Urban Rebuilding Professionals

Is that the sound (YURP) locals can make as the infusion of these folks continues?

HStreetLandlord said...

Interesting points, but plenty of people in NOLA have money. How many of the people moving in are from Metairie, the North Shore or other parts of Louisiana?

Put simply, there is a limited supply in what people are now seeking (historic neighborhoods and interesting housing) and demand is quite high. NIMBYs fighting every reasonable development in the city doesn't help, either. The canceled Elysian Fields development by Cummings, Mid City and uptown NIMBYS, unrealistic minimum parking requirements, absurd height limits etc

maus29 said...

Because they like it here. Some of them are shitty, some of them are nice, all them are human. Deal with them as such. You don't own the city, which isn't as timeless as you think. It's always been changing demographically: by French, Spanish, Americans, Irish, Germans, Jews, Sicilians, Vietnamese and Hondurans, to name a few. New Orleans will absorb them, and it will change, but it will remain New Orleans.

jeffrey said...

I know this gets tricky but it's a long term project of mine to separate the "Are You From Here" identity question from the more serious problem of class-based displacement caused by gentrification. I'm not worried about preserving some imaginary static picture of NOLA ethnicity in amber.

I am worried about poor and working class people being able to live here. Many of us are here because we like it too. Not excited about being booted out by the ruling caste to make way for condos.

HStreetLandlord said...

"Not excited about being booted out by the ruling caste to make way for condos."

Actually condos are a huge part of the solution. Build a ton of them and it should help mitigate future rent and price increases. We also need lots of new construction to meet the high-end demand so that current Class B housing isn't renovated and improved, making it unaffordable. See filtering:


jeffrey said...

All that's happening right now is more and more luxury housing is being developed. You're not going to build a more affordable city doing only that. You're going to build a city full of luxury housing and other things rich people like. That's been the story in New York over the past decade.

HStreetLandlord said...

So if you could magically drop 25000 new units of housing in the city prices wouldn't drop?

jeffrey said...

25,000 is kind of a big number so maybe but not necessarily. It doesn't make sense to treat all "units of housing" equally. If we're talking about apartments then a project begins with financing based on (among other things) expected sale/rental values.

And developers will target a specific market and price accordingly. And all you have to do is listen to them to understand who they're trying to attract. Pres Kabacoff says he wants to build a "Paris on The Mississippi" for example. http://thelensnola.org/2013/09/24/pres-kabacoff-outlines-1-billion-vision-to-redevelop-new-orleans-urban-core/

We aren't just dealing with some basic 10th grade notion of indifferent supply and demand. Real world development is shaped by big players and policy makers who have specific visions in mind of what they want to see happen.

HStreetLandlord said...

Again, you are ignoring the concept of filtering. If the high end luxury market is met with tons of new construction, then middle or lower end housing is not renovated to meet that demand, keeping it more affordable. If new supply is produced in already desirable neighborhoods, then gentrification would be slowed in other neighborhoods.

BTW haven't heard you offer a solution yet, just complaints. Here is more proof that building a lot of supply can lower prices (or at least mitigate future increases):
"A report out last week analyzing the regional apartment market in the second quarter of 2013 reveals that rents for Class A apartments (large buildings built after 1991, with full amenity packages) in the DC area dropped on an annual basis for the first time since 2009, a clear sign that the supply of new apartments is catching up to demand."

The only option other than building a bunch of new supply is to make a place extremely undesirable (i.e. central cities from 1960 to 1990 or, arguably, certain suburbs at the present).

Nolaresident said...

I am worried about poor and working class people being able to live here.

That's what I was attempting to get at jeffrey, despite how poorly I phrased it.

HStreetLandlord said...

More proof that a lot of supply will lower rents:

"It seems that everywhere you look in the DC area, there is a new rental project sprouting up. The result of all the construction is a supply level that is outstripping demand in the region. And that is a good thing for renters moving into new buildings next year.

Free rent, free parking and other concessions should be expected as new projects look to entice renters with concessions in 2014.

“We got a little ahead of ourselves and produced a few too many units too quickly,” said Grant Montgomery, who leads apartment research at real estate research firm Delta Associates. As a result, he said the DC market may be heading into “a couple-year period or so where renters will be more in the driver’s seat than they have in the past.”

A fourth-quarter report due out in January will likely show an uptick in the concession trend, Montgomery said. That trend is in line with other notable changes in the new apartment market for the DC area, where rents dropped this year for the first time since 2009.

The last time the concession trend in the DC area was in full swing was four years ago. One building offered two months free rent along with three months free parking. Another offered the choice of two incentives — two months free rent or a new 17-inch MacBook and iPhone..."