Low-Income Apartments Still Needed in New Orleans

When the U.S. Department of Housing and Urban Development unveiled its Choice Neighborhoods Program in 2011, public housing advocates had high hopes that the expansive grant program would succeed. The program was the cornerstone of the Obama administration’s urban strategy, giving millions in federal aid to five major cities-Boston, San Francisco, Chicago, Seattle, and New Orleans-for massive neighborhood-transformation projects.

The revitalization plans specifically singled out the need for affordable housing in urban centers, and the president’s plan pledged to provide ample low-income apartments. In New Orleans, HUD appointed the Housing Authority of New Orleans (“HANO”) as the local program coordinator. Unfortunately, in the four years since its initiation, HANO’s administration of the program has repeatedly faced scrutiny due to cost overruns, chronic delays, and corruption.

New Orleans seemed like a natural fit when it was selected as one of the first grant recipients. The proposed 300-square-block redevelopment area, mostly within the city’s historic Treme District, was culturally rich but economically depressed, especially after Hurricane Katrina and the Great Recession. It also sat in a prime location, adjacent to the bustling French Quarter and Central Business District. By providing affordable low-income apartments to the army of service workers that keep the city’s hospitality industry running, HUD hoped to ensure that revitalization led to sustained vibrancy.

From the outset, HANO’s critics were skeptical that the agency had the capacity to undertake such a massive project. To date, only 11 percent of the proposed units have been built, and many more have been mothballed due to flagging inertia and waning enthusiasm. Private investment has largely been funneled towards higher-end units, and the promised low-income apartments and houses have failed to materialize. Additionally, some of HANO’s prime contractors for the construction work have been mired in public controversy due to their circumvention of certain funding conditions designed to provide opportunities to minority-owned businesses. Under the terms of the federal program, 20 percent of the funds have to go to businesses owned by minorities and 5 percent is earmarked for businesses owned by women. But recent investigative reports detail how the majority of the money intended for “disadvantaged business enterprises,” or DBEs, has actually gone to companies owned by white males. In one case, a prime contractor paid a company for services, only to have that company turn around and subcontract the work back to a subsidiary of the same prime contractor.

To be fair, HANO is not responsible for all the problems with the development. The federal government hasn’t made good on the full promised funding, providing only $30 million against the nearly $700 million total price tag. It also appears that the Choice Neighborhoods development team overestimated the level of investment they could count on from the private sector. Other setbacks were totally unforeseeable, like the cemetery unearthed beneath the demolished Iberville housing projects that further curtailed the available land for low-income apartments. There is little hope that the original plan will be built to completion though the city still maintains that it can deliver.