Thursday, November 12, 2015

The rent is too damn high

About six or seven years into the New Orleans affordable housing crisis, WWL is starting to notice.
According to a report by HousingNOLA, rent in New Orleans have jumped 50 percent from 2000 to 2013. Home values have soared 54 percent in that same time frame. Right now, the average price of a three-bedroom, two-bathroom house in New Orleans stands at roughly $159,000. The fair market rental rate for a two-bedroom apartment in metro New Orleans is $965 a month.

I mean there are apartments for $500, $600 dollars, but the conditions are not livable. The bathrooms in some of these places I've looked at are not something I want to expose my son to," Flores said.
Housing experts say, on the most basic level, what’s happening in New Orleans is a function of supply and demand. After Hurricane Katrina, the number of undamaged homes shrunk dramatically, sending home prices soaring. Since the storm, the cost of construction, insurance and property taxes have all increased, in some cases even tripling.

While rent and home prices in New Orleans have shot up, salaries and wages have not. According to the HousingNOLA study, the average household income in New Orleans, roughly $37,000, remained unchanged from 2000 to 2013.

There's also growing concern for the pay that people who make up the back bone of the city's tourism industry. There are roughly 34,000 workers in the service industry in metro New Orleans. An analysis of the money they made last year finds that housekeepers, bartenders and the like, pulled in less than $23,000.
Where are these displaced workers going to live? Well, the most popular idea is to tell them all they need to move to New Orleans East. Which is bad enough a thing to say to begin with. "Hello, you really don't belong in our part of town anymore. Please make yourself more scarce."  But it turns out such a solution is even worse than it sounds at first.
Fingers quickly point to eastern New Orleans as the area with vacant rental inventory, yet the most recent occupancy report from the Greater New Orleans Multifamily Report shows units in the city's outlying areas -- the east and Algiers -- were 94 percent filled as of this past spring.

Land is also thought to be shovel-ready for apartment complexes east of the Industrial Canal along Interstate 10, but developers face much tighter margins with multifamily construction in this area. Data show average monthly rent for units in the New Orleans Historic Center rent was $1,414, while Algiers and eastern New Orleans fetched nearly half that -- $736.
In other words, we're not going to build affordable housing because that just isn't financially feasible. Instead we're gonna keep building more nice things for rich people downtown because, well, those are the projects we choose to subsidize.  

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