New Orleans city officials this week tried to smooth an uneven policy that makes it tougher – and sometimes financially impossible – for investors to rebuild certain storm-damaged properties.
It’s unclear, though, whether the change satisfies two agencies that had suspended sales of affected properties – a decision that put scores of property closings in limbo.
A joint report between The Lens and Fox 8 last month highlighted problems property owners were having with Louisiana Land Trust property purchased from the New Orleans Redevelopment Authority. Generally, these are the properties bought by the state, through the Road Home program, from homeowners who didn’t want to rebuild.
The heart of the problem was that the new owners seeking building permits were being asked to elevate their homes – an expense of $50,000 to $100,000 – if they couldn’t meet two criteria. For other properties, owners only had to meet one of the two.
The criteria were that:
- The building is already above base flood elevation, which is the level to which water would be expected to rise during a so-called “100-year storm.”
- The renovations to the house wouldn’t cost more than half of the house’s pre-Katrina value.
Unable to obtain permits, these properties were a source of worry for investors who had hoped to put these properties back into commerce. Furthermore, they were a continuing nuisance in neighborhoods still battling blight.
Such elevation requirements weren’t disclosed by the redevelopment authority, who itself wasn’t initially aware of the separate standard being applied by city permitting authorities.
In response to a growing number of complaints about the policy from unwitting buyers, the redevelopment authority and Louisiana Land Trust suspended further sales of these properties until the issue was resolved.
The New Orleans Redevelopment Authority released a statement today, though it doesn’t address whether sales will resume.
“We are hopeful that this will provide answers for individuals who have acquired or are planning to acquire LLT properties with structures through NORA,” it said.
Nearly 6 months after the issue came to light, an undated policy document released today.
The new policy doesn’t eliminate the double standard, but it lets a property owner appeal to Safety and Permits by introducing more documentation.
Here’s a recap of the full document.
- Properties situated about base flood elevation are not required to elevate
- Substantially damaged properties that are going to be substantially improved must be elevated.
- If properties are more than 50 percent damaged, the owner has the ability to appeal a decision to not award a permit. Previously, no appeal existed.
- If a property is not substantially damaged but it going to be substantially improved the house must be raised.
- Historic structures are exempt from the elevation rules. Those are classified as individually listed structures on the National Register of Historic Places as well as properties declared as structures contributing to a National Register District.
This policy should let owners apply for the necessary building permits and begin the appeals process if need be.
This comes at a time when many property owners are concerned that they will not meet the deadline set out in the contractual agreement – and risk forfeiture of the property as well as losing the purchase price of the property.