Much of the plight of affordable housing in New Orleans and around the state lies in the hands of the Louisiana Housing Finance Agency, which helps provide financing to build housing for low-income households. The Lens caught up with LHFA President Milton Bailey today to collect his thoughts on the challenges of creating affordable housing at a time when more people need it and fewer can afford to build it.

What state government power is responsible for making sure consumers aren’t being taken advantage of by insurance companies?

Milton Bailey: The state insurance commissioner is ultimately responsible for ensuring that rates are in line with what can be afforded by the consumer. We work with him, in the same way we work with all of our government colleagues, but we don’t have the ability to negotiate rates. Ultimately those decisions come down to the insurance commissioner and the legislators of the state.

There are property-owners who’ve maintained their houses adequately, but they can’t offer affordable rents because of their own rising insurance and maintenance costs. What should be done for those who would like to charge lower rents but have to cover their own expenses?

MB:I have been a long-time advocate of regionalized or nationalized housing insurance. It’s been a topic of discussion at the federal level and I think that should definitely be addressed. It’s those economic incentives that can assist the end-user who, unfortunately, is escaping attention. We have taken steps here through our tax credit program, which works with the Louisiana Recovery Authority to set aside $22 million in Community Development Block Grant funds that can be called on by developers as insurance subsidies. We have in our single family program included a feature that allows $165 a month to be paid into a homebuyers escrow account to help offset insurance costs.

A report released today by the Greater New Orleans Community Data Center recommends a statewide nonprofit insurance co-op as a strategy for alleviating landlords’ costs. How would that be created?

MB: It’s going to take more than that. Certainly that would help, but the bigger problem needing addressed in the market is determining to what extent are consumers being taken advantage of by insurance companies and how can the federal government relieve their insurance burdens.

Is any of the discussion around affordable housing dealing enough with the fact that there wasn’t enough of it available before Hurricane Katrina?

MB:I don’t think so. I think that a more holistic view of the problem that we’re facing in Louisiana should be a part of the discussion. By anybody’s numbers, statewide, there was a preexisting need of some 300,000 units or so of affordable housing. Add to that damage by Hurricanes Katrina, Rita and Gustav, and a very different picture emerges if you’re thinking in terms of what we need to do overall to recover our housing stock and, more importantly, make it more desirable and habitable.

A big challenge with creating affordable housing is dealing with NIMBYism. Has that problem been confronted forcefully enough?

MB A lot of this stems from preconceptions people have when talking about affordable housing. So, if you’re not a practitioner and someone talks to you about putting up a low-income housing development in your neighborhood, and you have a preconceived notion that that type of housing means that all manners of criminal element will be living in your community, well, of course you’ll have pushback. We have not done an adequate job of educating people about what affordable housing means, or educating the fear out of folks. It’s almost like going to a doctor who is a general practitioner and he says, “OK, you’re in pretty good health, and you have these problems,” but it’s a superficial analysis of what might be a deeper more systemic issue with your health. We are talking about the health of our economy, which is tied to the health of our communities. If our communities are paying over 50% of their income on housing costs then what are they foregoing in terms of healthcare and food? If you think about this in the broader context, everyone receives some kind of housing subsidy, whether that’s the ability to rent an apartment with a Section 8 certificate, or the ability to write off some of your mortgage expenses on your tax returns. So, if we can accept that there is nothing wrong with being subsidized by the federal government in one form or another at the homeownership level, then why do we have problems with people of more modest means receiving their housing benefit in the form of certificates or housing vouchers?

What about people who genuinely object to the new large-scale, multifamily apartment buildings because they are used to the smaller rental housing units in their neighborhoods?

MB:I understand that people are resistant to change and that they like the size of their communities, or the architectural tapestry of how their communities have evolved over the years. But family size and circumstances are different today than they were 20 to 40 years ago. The infrastructure demand is different today than it was 10 years ago. What we put in our homes and what we consider to be indispensable amenities today, whether that’s wireless internet or cable TV, some of these buildings are not equipped to deal with the new heavier consumer demand. If you take a look at perceptions from where these large tract dwellings are occurring, rarely do you have instances where we aren’t building any more units than what existed on that footprint before. In public housing, we are changing the footprint and residential dynamic substantially so as to eliminate pockets or centers of poverty and crime.*