How will New Orleans spend $14M on affordable housing? Here's the plan so far.

Read the full article at nola.com.

An advisory committee charged with overseeing New Orleans’ first dedicated funding stream for affordable housing has laid out plans to divvy up the first pot of money from the city's budget, expected to be about $14 million.

Beginning next year, more than half of the city’s new Housing Trust Fund will be used to expand and preserve the city's rental housing stock, under a proposed spending plan the committee released last month.

Voters overwhelmingly approved the fund last year, after it received widespread support from housing advocates, property developers and other stakeholders. Enshrined in the city’s charter, it can only be amended with unanimous council approval in emergency circumstances.

The ordinance sets aside 2% of the city’s annual budget for affordable housing initiatives each year, which will be administered by the city, the New Orleans Redevelopment Authority and Finance New Orleans. 

However, the plan's $14.6 million budget is based on the city's projected 2026 operational budget of $732 million, which could change as the city contends with a $100 million deficit, and Mayor LaToya Cantrell proposes an 11% budget cut.

The plan, proposed by the committee of housing advocates and city officials,  focuses mostly on creating and rehabbing affordable rental units. A third of the money would be set aside for affordable home ownership programs for low-income residents. To be considered affordable, housing costs are capped at 30% of a resident's income. 

More rental housing, homes

As part of the plan, $7 million will go toward subsidies for developers and property owners to build new units and rehabilitate existing ones.

About $4 million would go toward expanding home ownership, split between subsidizing new, for-sale affordable homes and an owner-occupied fortified roof program for low-income homeowners, according to the proposal. 

The committee proposed dedicating $1.8 million to subsidize property repairs in exchange for small landlords making their units affordable for a specified period of time.

NORA would offer landlords subsidies up to $50,000 for each unit to cover fortified roofs, HVAC repairs, weatherization, windows and other issues aligned with the city’s Healthy Homes program, established in 2023 to hold landowners accountable for property upkeep.

The committee also proposed that 5% be reserved for a rainy day fund and up to 10%, or $1.4 million for administrative costs.

Small focus

The bulk of the money for increasing the number of rentals, about $6.3 million, would be exclusively for small multifamily developments and not larger buildings and complexes. 

It could be used to build or substantially rehab buildings with up to four units in residential areas. The buildings also could be mixed-tenure, where a new homeowner can live in one unit and rent out the others, creating a “built-in income stream," according to the proposal.

“Not only are we investing in affordable housing, but we’re making it possible for low-income residents to have ownership through intergenerational wealth building,” committee member Asali Ecclesiastes said.

Larger developments that qualify for the federal Low Income Housing Tax Credit have more restrictions, the proposal says. They require more money, larger lots and have more zoning restrictions. The focus on smaller developments would allow more units to be available sooner, the committee argued during a meeting last month.