Bills to revamp housing agency should nail down ethics issues

By Sara Meadows Tolleson, The Lens contributing opinion writer |

Reshaping the way Louisiana handles affordable housing may be a worthwhile endeavor, but tandem housing bills now nearing a vote in the state Legislature are not ready for a floor vote. Thoughtful amendments to these bills are needed now to ensure that the state’s housing programs continue to serve the interests of Louisiana  citizens first and foremost. House Bill 590 and its Senate counterpart, SB 249 – both co-authored by House Speaker Jim Tucker — would consolidate all state housing programs within a new entity, the Louisiana Housing Corporation (LHC).

That would include the Louisiana Housing Finance Agency (LHFA) which currently administers the bulk of the financing for the state’s housing programs. The Louisiana Land Trust and the disaster-CDBG housing program would also be swept into the consolidation.

The proposed governance structure for Tucker’s LHC, as well as the process for appointing its leadership is cause for serious concern. As drafted, the legislation would politicize the agency’s leadership, giving greater weight to gubernatorial preference than to industry experience in appointing board members.

Under current law, the LHFA is obliged to reserve at least eight of its 15 board seats for representatives of key housing stakeholder groups. In turn these groups (e.g., Apartment Association of Louisiana, Louisiana Realtors Association, Louisiana Bankers Association) nominate a slate from which the governor must select new appointees. The LHFA protocol for board nominations and appointments ensures that industry and policy expertise – not political connections — inform the state’s housing policy and the use of its resources.

The LHC – like the LHFA before it — should make demonstrable experience in housing the key factor behind every appointment.

Tucker’s bills also need to be infused with ethics provisions that protect the integrity of the proposed LHC from conflicts of interest among its board members and/or elected officials with oversight responsibilities.

Amendments should include a prohibition against Board members and staff benefiting financially from any decisions made during their tenure and for some period of time after they have left the board.

Similar provisions should be added to prohibit state officials – during their time in office and for a period thereafter — from even attempting (whether successfully or not) to benefit personally from the Corporation’s activities. Not only will these provisions protect the integrity of the Corporation, they will also engender confidence among investors in the future direction and leadership of the agency.

Beyond these specific problems, what is strangely disconcerting about HB 590 and SB 249 to many developers and housing advocates is that the bill’s architect is Jim Tucker. His recent track record in housing policy seems at odds  with the legislation’s stated intent: i.e. to address the “serious shortage of decent, safe, and sanitary residential housing” in the state. As a member of the State Bond Commission Tucker effectively imposed a moratorium on bond financing for affordable housing in New Orleans, beginning in 2009. Citing  a flawed report by the Bureau of Governmental Research, Tucker questioned whether additional low-income housing was even needed. When the BGR study was rebutted by research from the University of New Orleans, it still took intervention by Mayor Mitch Landrieu to  override the moratorium so that construction could proceed on the Harrell Building, an 84,000 square foot, $20.6 million mixed-use stucture on Oretha Castle Haley Boulevard.

The State Bond Commission, at Tucker’s behest, continues to withhold approval for two affordable housing developments in New Orleans that have been delayed by the his moratorium. There’?s reason to wonder whether these projects would have the support of the new Louisiana Housing Corporation. In fact, this is a good question for the Legislature and its leadership as they consider the pending bills.

HB 590 and SB 249 have been referred to committee. Public hearings will begin as soon as tomorrow. The public should ask for key amendments before these bills reach the floor.

Sara Meadows Tolleson is a project manager Gulf Coast Housing Partnership, a non-profit real estate developer whose Harrell Building project in Central City is under construction.

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    The following letter was also published separately in the Opinion section.

    From Janet Howard, president and CEO of the Bureau of Governmental Research:

    On May 24, The Lens posted an article from Sara Meadows Tolleson on a bill proposed by House Speaker Jim Tucker to consolidate three housing agencies into a new entity. After discussing the need for amendments, Ms. Tolleson attacked the accuracy of a study by the Bureau of Governmental Research on the supply of subsidized rental housing, calling it a “flawed report” and claiming that the study had been “rebutted” by research from the University of New Orleans.

    The BGR report to which Ms. Tolleson refers, The House that Uncle Sam Built: The Continued Expansion of Subsidized Housing in New Orleans (2009), examined the post-Katrina changes in the supply of subsidized rental housing in the City of New Orleans and the region. It projected that by 2012:

    New Orleans will have approximately 35,700 units of subsidized rental housing – an increase of approximately 15,800 units (80%) over the pre-Katrina level.
    Subsidized rental units as a percentage of all housing will more than double, rising from 10% pre-Katrina to 25%.
    The number of housing units for very low-income households will increase by 3,600 (22%) over pre-Katrina levels.
    Although it will have only 27% of the region’s population, New Orleans will have 70% of the subsidized housing in the region.
    BGR’s report is not flawed, the numbers having held up under close scrutiny in two separate studies. Nor, according to Dr. Ivan Miestchovich, Director of UNO’s Institute of Economic Development and Real Estate Research, is BGR’s report rebutted by UNO’s housing study. Indeed, the two studies are complementary.

    BGR quantified the post-Katrina growth in one segment of the housing market – the supply of subsidized rental housing – and specifically called for the development of a comprehensive picture of current and future housing supply and demand. UNO, working with GCR & Associates Inc., has now delivered the comprehensive market assessment.

    As BGR has previously stated, policymakers should strive for a housing market that accommodates different income levels without placing a disproportionate burden on the city. Now that they have numbers for supply and demand in both subsidized and market- rate segments, policymakers can work on a comprehensive strategy to ensure that the subsidized housing supply is sized and situated appropriately to the overall market.

    We invite readers to examine the two studies at http://www.bgr.org/files/reports/BGR-09_Housing.pdf and doa.louisiana.gov/cdbg/dr/drreports.htm.

    The Bureau of Governmental Research is a non-profit watchdog organization that analyzes local governance and economic issues.