Renters in New Orleans pay the price

Homeowners to receive the most housing renewal aid to pick up the pieces after Katrina

September 17, 2006|By New York Times News Service

NEW ORLEANS -- As billions in housing aid begin to flow here in the next few weeks, most of it will go to homeowners, who have been appointed by city officials as the true architects of this city's recovery.

The renters of New Orleans, it seems, are on their own.

Rents are skyrocketing across the city, up an average of 39 percent since Hurricane Katrina. The city has announced that it plans to refurbish only a small fraction of its traditional public housing units. Some neighborhoods are campaigning to tear down sturdy apartment buildings and build parks in their place.

Though some aid has been set aside for landlords, many lower-income residents who say they are unable to return have been priced out.

"I want to come back, but who's going to help me build my life?" asked Lionel Smith, 46, a longtime resident of the Lower Ninth Ward and a driving-school instructor whose apartment building was destroyed by the floodwater. "There's this plan in place to take care of homeowners, but I've heard nothing about helping renters. Where are we supposed to live? Will they help rebuild apartment buildings?"

From a renter's point of view, New Orleans has become off-limits to all but prosperous tenants; rents have increased significantly in the pockets of the city that did not flood. Before the storm, the fair market rent for a two-bedroom unit in the city was $676; it is now $940, according to the Brookings Institution.

Before the hurricane, it would not have been unusual to find a two-story, three-bedroom house in Gentilly, a solidly middle-class neighborhood, renting for less than $1,000 a month.

Today, that area, north of downtown toward Lake Pontchartrain, does not exist as a functioning neighborhood. By contrast these days, $1,000 might get a tenant half a refurbished duplex on a trash-strewn street in Mid-City, and it would most likely be offered without major appliances or air-conditioning.

Henry Jones, a New Orleans East homeowner, said that roughly half the owners in his Wimbledon subdivision were returning, which he contrasts with the lack of activity that he observes in neighborhoods like Central City and Mid-City.

"You drive around those neighborhoods, and you pretty much see nothing going on," Jones said. "It's depressing."

Those communities that were home to the greatest concentration of rental properties are also those areas that lie in ruins 12 months after the storm.

The longer properties languish, rotting in the humidity, the harder they are to restore to habitable conditions. With no concrete plan in place to help landlords, a large part of the rental stock has been festering for a year now, preventing residents from returning and depleting the work force.

"I'll confess to being frustrated," said Norman C. Francis, chairman of the Louisiana Recovery Authority - the agency distributing federal aid - and the president of Xavier University here. "Most of the people who need to come back aren't homeowners at this point but renters."

State officials acknowledged that renters were not their first priority.

"We wanted to get the homeowner assistance plan off and running, because it affects more people," said Walter Leger, the chairman of the authority's housing committee.

Unlike some other urban areas, New Orleans' rental market was dominated by small-scale local landlords before the storm. Many say they lack the resources needed to resuscitate their properties, especially when so many of them are struggling to repair their own homes.

The Louisiana Recovery Authority has set aside $859 million to help landlords (compared with $7.5 billion that has been set aside for homeowners). The goal, officials said, is to start distributing that money in the next month or so, but they acknowledge that they are still working out the details of the plan.

Officials estimate that at least 30,000 units will be improved through this program, which is expected to offer no-interest 10-year mortgages of up to $75,000 a unit to landlords who agree to rent at or below the market rate. No direct subsidies to tenants are being planned.

Critics of the proposed plan say 30,000 units are not nearly enough to make a big difference in New Orleans.

The Brookings Institution has estimated that more than 48,000 rental units were destroyed or heavily damaged in the flood.

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