Op-Ed Response to Louisiana SB 162
by Zach Murray
In May, lawmakers in the Louisiana State Legislature moved swiftly to pre-empt the power of local governments to address the affordable housing crisis. State Senator Conrad Appel introduced SB 162 on May 9, a bill that would have effectively outlawed inclusionary housing for the entire state. Following a 29-9 victory in the State Senate, it seemed that SB 162 would fly through the House as well – leaving only a Governor’s veto as the last hope for defeat. Thanks to a groundswell from local advocates the bill failed to pass out of its assigned committee in the House, the Judiciary Committee. The proposed ban would have moved Louisiana from a green state for inclusionary zoning into the red by amending and ultimately undermine authorizing legislation enacted by the legislature in 2006.
What led to this incredible turn of events? The key to success against the bill, according to Andreanecia Morris, President/Chair of the Greater New Orleans Housing Alliance (GNOHA) was the emergence of “a genuine statewide coalition.” Once the sleeper bill passed the Senate, GNOHA worked to mobilize partners from all across the state, with an understanding that although the affordability crisis is more extreme in New Orleans, “this is a statewide crisis.” As a result, cities and towns including Lake Charles, Shreveport, and Baton Rouge stepped up in addition to new partners including the Urban Conservancy, Fair Housing Action Center, American Institute of Architects (AIA), and American Institute of City Planners. The multitude of partners enabled the coalition to deliver multiple messages, from multiple voices. A letter of opposition to the bill from rural Lake Charles—a community undergoing a growing housing crisis—was an ideal example of the merits of the program and highlighted the importance of reaching unexpected audiences. “Now” according to Morris, “New Orleans has to get moving [on its inclusionary housing policy] we can’t come into next session with nothing to show of it.”
Despite significant progress and recovery since Katrina, research from Make Room, a nationwide campaign representing American renters shows that the affordable housing crisis persists statewide. As of 2016, 250,000 workers in Louisiana are burdened by high rents; in fact, 48 percent of Louisiana households pay more than 30% of their income towards housing. Nowhere is the crisis more deeply felt than in the city of New Orleans. The housing market has rebounded significantly with rents increasing 40 percent in 10 years yet stagnant wages have resulted in 60 percent of workers earning less than what is needed to afford to rent in the city. To address the shortage of quality housing for workers, members of the city council are working to adopt the state’s first inclusionary housing ordinance; requiring at least 12 percent of newly constructed apartments and condos with 10 or more units—in areas experiencing rapid development—be set aside as affordable. The local “Smart Housing Mix” proposal would ensure that developers are well-compensated for including a few lower-priced units within the building by granting them substantial tax benefits and special zoning relief.
Even so, the Smart Housing Mix proposal has its opponents. The Home Builders Association of Greater New Orleans, though involved in designing the program to ensure no harm to small, local developers or single-family home rehabilitation, has come out firmly opposed to the proposal, and lobbied Senator Appel on the issue. The legislation proposed by Senator Appel would have eliminated “inclusionary zoning” from the state law and replaced it with “incentives” which were never defined or provided by the state. The state bill would have relegated local governments like New Orleans to voluntary negotiations with individual developers. Both mandatory and voluntary programs typically provide cost-offsetting incentives to developers. In fact, about 80 percent of inclusionary housing programs nationwide include some sort of requirement, as well as cost-offsets for local developers. However, research shows that non-mandatory, voluntary programs are not very productive generators of workforce housing. Additionally, open negotiations for affordable housing at every development increases the potential for financial risks, where instead, mandatory requirements provide predictability in the planning process for developers.
While the need for affordable housing is growing nationwide, federal assistance to help finance affordable housing is declining. President Trump’s budget proposes Billions in cuts to HUD funding on top of cuts, which have been sustained for nearly a decade. The additional cuts will almost certainly hinder the ability of local communities to meet growing needs. In addition, potential reforms and cuts to business tax rates are already undermining the Low Income Housing Tax Credit (LIHTC), the nation’s largest source for affordable housing construction and preservation. Now more than ever, state and local governments must work to support and supplement critical housing programs. House legislators in Baton Rouge clearly got the message: the state should be adding to, not chipping away at the tools and resources available to local governments and parishes to address the affordable housing shortage. Banning inclusionary housing in Louisiana was an over-step by the State Legislature to limit the independence of cities and towns and is the exact opposite of the type of effort needed by Louisiana’s working families. Local communities in Louisiana and many more states must remain vigilant at further attempts to preempt local housing solutions.
Inclusionary housing programs (most commonly known as inclusionary zoning) make housing affordable for low and moderate-income families typically earning between 60 and 120 percent of the Area Median Income. This workforce housing provides homes to nurses, teachers, police officers and other moderate-income households where reasonably priced options would not otherwise be available. Inclusionary developments near places of employment improve access to jobs and help workers avoid long distance commutes. The Louisiana Inclusionary Zoning and Workforce Affordable Housing Act was passed following Hurricane Katrina in recognition that local governments and parishes needed as many tools as possible to help address the shortage of “decent, safe and sanitary residential housing…at rents affordable to low and moderate-income families”.