Louisiana policies concentrate poverty

from The Times Picayune

Report: Subsidized housing not spread out
By Bruce Eggler

Post-Katrina housing policies at the state level are reconcentrating subsidized housing, and therefore poverty, in Orleans Parish instead of trying to distribute it across the metropolitan area, according to a recent report by the private, nonpartisan Bureau of Governmental Research.

"For decades, experts in urban policy have recognized the ultimate futility of dealing with poverty and affordable housing issues within the confines of the core city," the report says.

Instead, it says, experts have advocated spreading housing for poor people throughout a metropolitan area "to provide greater opportunities and quality of life to low-income households, to connect housing strategy and job opportunities, and to create a more equitable sharing of the costs of poverty."

Unfortunately, says the report, "Cementing Imbalance: A Post-Katrina Analysis of the Regional Distribution of Subsidized Rental Housing," the state's "current approach to low-income housing does little to alleviate -- and to some extent perpetuates -- the region's imbalance."

As a result, it says, "New Orleans, a city with a reduced population and severe disinvestment and destruction, is left to struggle with the social and economic costs of poverty. The wealthier suburban parishes remain relatively insulated from them. Low-income households, meanwhile, remain disconnected from the areas with the greatest job opportunities."

The BGR report mentions only in passing the reality that most suburban residents, and their political leaders, would prefer that poor people remain in the center city, which many suburbanites fled to avoid poverty-associated problems such as poor schools and high crime rates.

Post-Katrina changes

The BGR report looks mainly at the distribution of subsidized rental housing in the New Orleans area and the changes brought about by post-Katrina housing programs.

The programs include $1.7 billion worth of GO Zone low-income housing tax credits for the construction or rehabilitation of rental housing and almost $900 million in Community Development Block Grant money for the repair of small rental properties. Both programs impose rent and income restrictions on units they finance.

Because the state sought to distribute tax credits and rental repair money in proportion to the damage suffered by rental properties in the various parishes, the report says, the lion's share of the credits and rental repair money was allocated to projects in New Orleans.

The programs try to deconcentrate poverty within Orleans Parish, the report says, but "they do little to alleviate the regionwide imbalance of low-income housing."

Report's findings

The report says:

-- Before Katrina, New Orleans had one-third of the region's population but two-thirds of the subsidized rental households. Post-Katrina, its share of the subsidized units will hold steady, despite its sharp population loss. Jefferson Parish, the most populated parish in the region, will have 20 percent of the subsidized households. St. Tammany Parish, with a population comparable to New Orleans', will have just 6 percent.

-- The pre-Katrina distribution of very low-income subsidized households throughout the region will also hold steady. The government defines very low-income families as those making less than $22,800 for a four-person household. The BGR report projects that, if current housing plans come to fruition, New Orleans will have 65 percent of the region's very low-income subsidized households, compared with 70 percent pre-Katrina.

-- Subsidized households as a percentage of all households in Orleans Parish will rise from 10 percent in 2004 to 19 percent by 2012. The increase will result from both a decrease in the total number of households and an increase in the number of subsidized households.

-- If the post-Katrina housing programs' targets are achieved, however, the number of very low-income families living in subsidized housing in the city would decline by 25 percent from the pre-Katrina level. Such families then would account for less than half of all subsidized households in New Orleans, compared with 83 percent pre-Katrina. On the other hand, New Orleans' share of those households would increase significantly if Congress passes HR 1227, which would require the reopening of more public housing units than is now planned.

Success limited

The state, in structuring its post-Katrina housing programs, recognized the danger of clustering very low-income households in the city, the report says. It took steps to encourage mixed-income development, including the redevelopment of several of the city's large public housing sites.

However, the report says, the state achieved only limited success with mixed-income developments, which account for just 18 of the 72 projects awarded GO Zone housing tax credits. The remaining 54 projects are entirely for low-income people, and 42 of these have a very low-income component. Many of the developments are clustered together or located near other subsidized housing.

Despite many political, legal and practical impediments, the report says, the state should begin to address issues such as concentrated poverty and affordable housing on a regional basis.

It says the Louisiana Housing Finance Agency will have an opportunity to do that in reallocating GO Zone housing tax credits that are returned to the agency because some projects previously awarded credits will not go forward because of higher construction and insurance costs.

"The state's post-Katrina housing programs have sought to encourage work-force housing development and avoid concentrations of poverty within the city," said Poco Sloss, chairman of the BGR board. "But the city still has much of the region's subsidized housing, and residents have limited access to employment and other opportunities. The state should begin reviewing ways to distribute low-income housing more broadly and strategically throughout the region."

Bruce Eggler can be reached at beggler@timespicayune.com or (504) 826-3320.