Housing advocates: Lower property taxes could spur affordable housing growth

New Orleans rent higher than average wages

NEW ORLEANS, La. (WVUE) - The increasing cost of housing in New Orleans -- both rented and owned -- is no small concern for people needing affordable housing, and those advocating on their behalf say freezing or reducing property taxes for some landlords and homeowners could help the growing crisis.

Maxwell Ciardullo, Director of Policy and Communications for the GNO Fair Housing Action Center said rent costs can be overwhelming for some residents.

"Two-bedroom apartments are now a thousand dollars a month,” Ciardullo said.

According to a national study, for many people, the cost of rent outpaces their earnings. The National Low-Income Housing Coalition reported across Louisiana, there is a shortage of rental homes that are affordable and available to “extremely low income” households.

Andreanecia Morris is executive director of HousingNOLA and is heavily involved in the affordable housing debate.

"It’s highlighting the problem at a national level, but it also gives us the chance to look at what’s happening locally, and the fact that New Orleans is one of the most expensive places to live in the state of Louisiana, it’s got some of the highest housing rent costs in the state of Louisiana,” Morris said.

Ciardullo agreed.

"We have new data that shows that you now have to make $19.38 an hour to afford a modest two-bedroom apartment in New Orleans, and that is far more than a lot of the folks in our hospitality and tourism economies make,” he said.

Morris added that many factors affect what landlords charge renters.

“It’s not just simply people being stubborn. When you look at construction costs, when you look at property taxes, when you look at insurance, that justifies some of the increase," Morris said. “And so, that’s why we’ve got to have policies to intervene to bring those costs down, so landlords can then pass that on to their renters.”

Bills approved by the state legislature allow for voters to decide a constitutional amendment that would let the city reduce property taxes for small landlords. Morris said there would be a lot of public discussion before an election happens.

“Landlords who are already interested in renting to the average New Orleanians, but the numbers just don’t work, this can give them the chance to do that. And again, they’re still going to kick in on their taxes,” Morris said. “We’re not talking about tax obliteration, we’re talking about tax freezes, a little bit of tax relief, so that you can pay your property taxes.”

Also, the city would be able to do the same for some homeowners struggling to afford property taxes.

"We have created thousands of first-time homeowners with millions of dollars post-Katrina to become first-time homeowners, and they’re at risk of losing their homes now. So, we want to see those folks take advantage of those kinds of programs once it comes to bear,” Morris said.

Ciardullo thinks it’s the right approach for an area with a shortage of affordable housing.

"I think it is maybe one of the best opportunities we’re going to have to address the affordable housing crisis that we have at the scale that we need it. It’s going to support renters by ensuring that builders who build small new rental properties, if they accept these tax incentives, will have to rent them at affordable rates. And, it’s going to support our longtime, low-income homeowners who are seeing their tax assessments skyrocket,” he said.

Gilbert Montano, the city’s chief administrative officer, said increasing the amount of affordable housing remains a top priority for Mayor Latoya Cantrell’s administration. However, he said any proposed change to property taxes must be thoroughly explored.

"I think there’s always a couple of sides to each and every proposal that we have to be thorough as we deal with property taxes, because certainly that’s a lifeblood of the city as well. But, if it’s used as a scalpel instead of a hatchet, I think proposals can be looked upon much more favorably,” Montano said.

City services like police and fire departments benefit from property taxes, as do a number of other local entities.

"It’s going to require a lot of thoughtful discussion, you know, there’s always unintended consequences whenever you take from certain thresholds as it relates to the city budget,” Montano said.

The proposed constitutional amendment would be voted on statewide.

According to Morris, a shortage of existing housing in New Orleans is not the issue.

"There's a lot of room, there's enough blighted and vacant properties, there are homes that are sitting,” she said.

Morris also said she is urging senior citizens to take advantage of the program which already freezes their property taxes at a certain level.

“We see how the freeze program works for seniors, it gives senior citizens the chance to stay in their home. We’re talking about building wealth, especially in a community like this, that’s majority African-American, where we want to talk about that wealth building, closing that wealth-divide, being able to pass that property on to the next generation is how you get to closing that racial wealth gap," Morris said. “You can’t do that if you’re going to lose that house to speculators and investors who are going to pick it up for the property taxes.”

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