Tuesday, August 19, 2014

New New Orleans

New Orleans is now ranked second in the US in income inequality.
Inequality is growing nationally, but the speed of growth in New Orleans is faster than that in many other cities. New Orleans' Gini coefficient rose 5.39 percent since 2008. Only 14 of the 50 cities included on Bloomberg's sortable list saw inequality grow faster.

The Gini coefficient for the United States as a whole was .4757, according to Bloomberg, which updated its figures in April. According to the CIA, which hasn't updated its figure for the United States since 2007, when its Gini Coefficient was .45, America ranked 41st for income inequality, between Uruguay and the Philippines.

That, more or less, is the great failure of post-Katrina New Orleans.  Sure, there's growth and "vibrancy" resulting from massive investment in rebuilding.  But the benefits of this growth have accrued into the hands of a small and isolated caste for the most part.  This needs to be examined more thoroughly.

For example, here is a problem we were discussing on the parallel internet a few weeks back.
Offering a direct view of City Park, this just-listed 4,137-square-foot house has hit the market for, ahem, $700,000. The listing is straight-up with the fact that "a total renovation is needed to restore this home to its former glory."
Housing prices are out of control.  But who are the buyers? Not anyone I know.. or know of.. or can even imagine I might know anything about right now.  Every personal story I come across has to do with friends or acquaintances being priced out of neighborhoods not buying into them. So, who is buying in?

We can talk about our pet theories of gentrification all day long.  Are the majority of these huge sale prices investment properties? Are they full time homes or vacation rentals?

One reason I'm interested in the Airbnb trend is, in some cities, it encourages a practice where investors buy up the housing stock and put it to use in the tourist trade (although unlicensed and untaxed). It sounds like this is happening here but I really wish someone would dive into explaining the extent of it.

Anecdotally I hear "a lot of people are moving here." And that's fine but please also tell me where these people are getting $700,000 to blow on fixer-uppers.  I've heard some say "doctors" and "film people" are buying houses but there's little I can do to confirm these guesses.

New Orleans is not exactly a city of millionaires. Or at least it hasn't been.  So what is actually going on? The housing market suggests there is money coming into the city from somewhere.  Where?

1 comment:

Superdeformed said...

Most people I know making six-figures right now are drilling engineers.

I do see a lot more high-prices sports cars on the road now.

As for who's buying these houses, my crazy old aunt sent me a newspaper clipping of when I bought my house. I had no idea that was a thing published. Maybe that could be a source of information?