New Orleans City Council women Helena Moreno and Kirsten Palmer at a September 2019 meeting.

After some handwringing and consternation five years ago, New Orleans accepted the fact that the city must address its affordable housing crisis and resolved to end it. Unfortunately, things have worsened as we struggle to implement policies that will help us turn from the disastrous course we are on and create new affordable housing opportunities. Despite the clear need to #PutHousingFirst, we are failing – particularly when it comes to improving housing quality for renters. While there have been victories, they have been hard fought and have taken far too long.

The HousingNOLA 10 Year Plan has long called for strategic tax relief in addition to policy reform. Last year, Senator JP Morrell’s successful ballot initiative to allow homeowners who experience a significant increase in their property assessment to phase in their new tax rates provided relief for homeowners. In another welcome surprise, the 2019 legislative session approved a second tax relief bill that would meet the needs of renters and homeowners whose increase would be below 50%, but still unaffordable.  Authored by Senator Troy Carter, SB 79 was approved, and Proposition #4, a constitutional amendment, was put on the October 12th ballot. It would have let New Orleans create a tax relief program for small landlords (15 units or less) and homeowners for whom a tax increase would just be too much to bear. Unfortunately, Proposition #4 did not pass.

”The drastic increase in property assessments will lead to homeowners and landlords being unable to pay their 2020 taxes.  Not only will those properties then be vulnerable to tax sale, but New Orleans will lose out on badly needed revenue.”

Many were startled to see the drastic increase when they received their tax bill in July of this year and are concerned about what this means for their households. We know that many homeowners may not have the savings or income to avoid further hardship. Even for those households earning a stable salary, the rate of cost burden shows that tax relief is needed in Orleans Parish, because too many homeowners entered the market unable to anticipate this unwelcome spike in taxes and insurance rates. Unfortunately, last year’s homeownership phase-in program provides no help to small landlords who will have no choice but to pass the tax increase on to their renters—who are already overwhelmingly rent stressed.

Despite the disappointing result of this recent election, we must find a way to act. The drastic increase in property assessments will lead to homeowners and landlords being unable to pay their 2020 taxes.  Not only will those properties then be vulnerable to tax sale, but New Orleans will lose out on badly needed revenue. New Orleans doesn’t accept partial tax payments, and many property owners who could and did pay their 2019 taxes will not be able to pay in 2020.

To address this challenge, HousingNOLA has recommended exploring and developing at least three new programs which are implementable on a local level, and could have a positive and immediate impact:

  1. Longtime Owner Occupants Program (LOOP) – This is already a policy in cities like Philadelphia and Washington, D.C. LOOP freezes tax rates for households that meet community requirements which allow low income and middle-class homeowners to stay in their neighborhoods when gentrification would make that impossible. Additionally, we need to allow homeowners in gentrifying neighborhoods to pay their property taxes even when they have code enforcement liens. This practice counters any claim that we have to collect property taxes—we’re leaving tax revenue and codifying gentrification.
  2. Preserving affordable rentals – Once fully enacted, the Smart Housing Mix addresses large developments (10 units or more), but we need to stabilize rents across the board, as 63% of renters are cost burdened and most cannot afford to pay any sort of increase. Landlords have little choice but to pass on any significant tax increase to their tenants. With the affordability requirements for the first apartments funded under Small Rental Property Program (SRPP) expiring next year, and the dramatic increase in property taxes, we could see a major increase in evictions next year.
  3. Property Tax Assessment Reform – Together New Orleans presented startling research that clearly demonstrated that there are systemic issues inside our assessment process. It’s clear that we can no longer fail to adequately value vacant land and monitor generous economic exemptions. We also have to examine the value of property that generates income for large institutions.

”Forty-one percent of homeowners are cost burdened—with nearly a third of owner-occupied households earning an annual income that is below the median income.”

One of the challenges in dealing with the affordable housing crisis is the fact that some people don’t understand that it affects everyone. The biases many people have lets them (namely middle-class homeowners) believe that they are immune. Those who own their homes are not exempt from the impacts of our city’s affordable housing crisis. HousingNOLA’s data driven process has addressed tax issues from year one. Gentrification of historic neighborhoods and increased market pressure across the city have driven increased property values every year since Hurricane Katrina. Only seven out of 72 neighborhoods include census tracts which did not see an increase in housing values between 2013 and 2017. The median home value in New Orleans has increased by twenty-five percent since 2014, according to MLS data. There is ample data to demonstrate how vulnerable Orleans Parish homeowners are to any significant changes in their tax rates:

  • Forty-one percent of homeowners are cost burdened—with nearly a third of owner-occupied households earning an annual income that is below the median income;
  • Forty-four percent of owners have paid off their mortgage or inherited their home;
  • A third of homeowners are over the age of sixty-five. Eleven percent of all homeowners in Orleans are cost burdened senior citizens.

Because the people of Louisiana did not give New Orleans the chance to create tax relief programs to address the affordable housing crisis, we must ask the Mayor and City Council to #PutHousingFirst and roll back our millage rates. If the increases we’ve seen result in too large of an increase in the city’s taxes, they will have no choice. Our city needs tax revenue to provide critical city services, but if the people can’t pay the taxes, and the city doesn’t allow partial payments, we could have thousands of unpaid tax bills. This would be the beginning of another disaster—a man made one that we would have inflicted upon ourselves. We have needs beyond housing, but those can only be addressed by a fair and equitable tax collecting from a growing and stable community. The people who are struggling here now can’t bear the burden of those who have been forced out and desperately want to return. Putting housing first puts this community first.

Andreanecia Morris, Executive Director, HousingNOLA

Andreanecia Morris serves as the Executive Director for HousingNOLA, a 10-year partnership between community leaders, and public, private, and nonprofit organizations working to solve New Orleans’ affordable housing crisis. Prior to her role as Executive Director, Morris spearheaded the development of the HousingNOLA 10-year Strategy and Implementation Plan. The strategy indicates the need for 33,600 new affordable housing opportunities by 2025.

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