Monday, October 10, 2016

All we did was build nice things for rich people

When all you do is build nice things for rich people, you run the risk of creating a glut in the market for nice things for rich people.
That split between the high and low markets represents a key issue for the city. James Amdal, a senior fellow at the University of New Orleans' Transportation Institute who has studied the Warehouse District, said both the undersupply of lower-income housing and the oversupply of higher-end properties result from development patterns since Hurricane Katrina.

"Citywide, it seems as if affordable housing has become an absolutely critical in-demand commodity, and there just isn't any," Amdal said. "I think it dates to Katrina and post-Katrina and no one really understanding or knowing what needed to be done. Everyone decided that the low-hanging fruit was upper-middle, upper-class housing."
Not only did we focus on the upper end of the spectrum, we actually used funds designated for affordable housing development to do it.
We found short-term listings that appear to be in four developments subsidized with HOME Investment Partnership funds, one of several federal programs that fund affordable housing:
  • Bienville Basin, on the site of the former Iberville public housing complex near the French Quarter
  • Blue Plate Lofts, at the foot of Jefferson Davis Parkway in Gert Town
  • The Muses Apartments in Central City
  • A house at on Carondelet Street in Central City
Most of the listings were for an entire apartment.

This doesn’t mean that tourists are recovering from nights on Bourbon Street in low-income housing. The developments have a mix of market-rate apartments, affordable housing and, at Bienville Basin, public housing.

“My rent was $1,400 a month,” wrote Mark, an AirBnB host whose listing appears to be in Bienville Basin. “Let me know when that’s affordable.”
$1,400 is not affordable for anyone who actually lives here.  But it appears to be well below the price point at which the nice things for rich people are profitable for their management companies. In that Advocate article about the "cooling" of the rental market we find a Cotton Mill condo manager bellyaching that she recently had to take only $4,500 a month from a tenant.

Unfortunately it is this upper bound "crisis" and not the affordable housing problem that is likely to generate a policy response.  The market for nice things for rich people had been held afloat thanks to our gross public subsidy to the film production industry. It also appears to have benefited from the unrestrained encroachment of short term rentals.   One can easily envision policymakers acting to relieve the "glut" by either restoring the Hollywood South tax credit, further liberalizing STRs, or both.

As for helping the rest of us afford a place to live... well there really isn't much in the works.  The mayor's much praised affordable housing plan, for instance, is heavily dependent on so-called "inclusionary zoning" requirements.  But inclusionary zoning is an insidious and ineffective approach  based in trickle-down economic theory.  Basically it supposes the only way to build more affordable housing is to first build more nice things for rich people.
Inclusionary zoning is a fatally flawed program. It’s not just that it doesn’t produce enough units, or that the apartments it creates aren’t affordable, though both observations are undeniably true. The real problem with inclusionary zoning is that it marshals a multitude of rich people into places that are already experiencing gentrification. The result is a few new cheap apartments in neighborhoods that are suddenly and completely transformed.
Any political leader who asks us to believe in bullshit solutions like this isn't really trying to help. Instead they're looking for easy ways to appear to help which won't piss off their real friends.  Here's what happens when they actually try to help in ways that make their friends uncomfortable.
New Orleans City Councilwoman Stacy Head on Friday joined a small but growing crowd objecting to Mayor Mitch Landrieu’s plan to build a “low-barrier” homeless shelter in Central City and calling for a new location with more comprehensive services.

The low-barrier shelter concept, pitched as a cornerstone of the city’s 10-year plan to end homelessness, has evolved since it was first proposed more than a year ago.
Stacy and Latoya Cantrell (who also opposes the shelter) are worried because a charter school executive told them it's located too close to his territory.  So much for inclusionary zoning, in spirit, anyway. The homeless shelter doesn't do anything to subsidize or finance any nice new high end apartment developments so it's a no-go. We're trying to build and maintain a nice city for rich people to visit where nobody actually lives. The dip in the market for luxury housing stalls that a bit. But I'm sure the leadership team will come up with some way to help.

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