10 Years After Katrina, New Orleans Public Housing Still in Limbo – Next City

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10 Years After Katrina, New Orleans Public Housing Still in Limbo

Will the Obama administration be able to fulfill the broken promises of the past?

Story by Katy ReckdahlTwitter

Published on Jun 15, 2015

From his regular perch on his New Orleans front porch, Louis Miller keeps an eye on the narrow shotgun house across the street. Every few weeks, maintenance crews from the local housing authority cut the grass in front of the house and repair the boards that cover the windows, if vagrants have pried them loose again.

Miller, 64, is an active presence here, warmly greeting his neighbors as they come and go. But his block on Governor Nicholls Street — less than a mile from the bustling French Quarter — is too silent, with too many blighted, empty homes, he says. He can’t imagine that changing anytime soon.

Yet four years ago, Miller’s block became part of a trapezoid-shaped, 300-square-block section of the city targeted for a major federal “transformation” through the Choice Neighborhoods initiative heralded as a keystone of President Barack Obama’s urban agenda. Some even said the program’s philosophies harkened back to the anti-poverty work that the former Chicago community organizer had done early in his political career.

The U.S. Department of Housing and Urban Development embraced the trapezoid, dubbed Iberville-Treme, along with an exhaustive New Orleans plan that called for 2,314 apartments constructed within 54 months.

Yet after 48 months — four years — the work in New Orleans is far from done.

If construction continues at the same pace in coming years, the promised 2,314 apartments won’t be complete until 2026. In Miller’s neighborhood, only 11 percent of the apartments that were supposed to be done this year have been built.

People in town who have long watched the Housing Authority of New Orleans (HANO) shake their heads and say that the agency didn’t have the capacity to do work at this scale, especially during a particularly competitive period in Louisiana for bonds and Low-Income Housing Tax Credits. Yet the federal government also may have over-estimated its signature initiative, which awarded its first high-profile Choice Neighborhood grants to five cities in 2011 but was only able to give them a combined $122 million.

A Neighborhood in Waiting

For generations, the Iberville-Treme area adjacent to the French Quarter has housed the cooks, housekeepers, bellhops and jazz musicians who are essential to the city’s famed round-the-clock party but often bring home paltry wages for their labors.

Early in the morning, it’s common throughout Iberville-Treme to see housekeepers in black and gray dresses or restaurant workers in checkered cooks’ pants walking to work. As the afternoon New Orleans sun swelters, musicians toting tubas and drums often walk alongside the Quarter’s dinnertime staff, many of whom carry freshly ironed shirts and jackets on hangers. The area, with its rich culture and low incomes, seemed a perfect candidate for Obama’s turnaround strategy, which focused on strengthening three key community components: housing, neighborhoods and people.

And in 2011, when HUD unveiled its inaugural Choice Neighborhoods recipients — New Orleans, Boston, Chicago, San Francisco and Seattle — it was clear that, if these cities succeeded, they would be trumpeted as evidence of innovative Obama administration anti-poverty strategies.

On the day the program launched, the President released a statement, championing its potential for cities and individuals. “With HUD’s Choice Neighborhoods grants,” the president wrote, “my Administration has brought local communities an innovative new tool to ensure that all families can access the quality affordable housing, safe streets and good schools they need to compete in the 21st-century economy.”

To win its grant, HANO worked with city officials to create a 1,000-page Iberville-Treme Transformation Plan that centered on the Iberville public housing development, a distressed but historic brick complex located on some of the city’s most sought-after real estate, right on the edge of the French Quarter.

Children run in the Iberville development’s courtyard in 2011, before the redevelopment began. (AP Photo/Gerald Herbert)(AP Photo/Gerald Herbert)

The plan promised — as the Choice grant requires — one-for-one replacement of the 821 public housing apartments. But the plan also pledged to create 1,493 additional apartments, many of them with affordable rents, which would be spread throughout the neighborhood and, sporting ground-floor retail and cafes, would give the area an urban-village atmosphere.

But unlike its predecessor, HUD’s HOPE VI program, Choice Neighborhoods considers housing construction only one prong of a three-prong anti-poverty strategy. So the Iberville-Treme plan also detailed the ways that developers and dedicated social services providers would improve the neighborhood and better connect its people with jobs, early childhood education, parks, schools, transportation and community resources.

The New Orleans plan was far-reaching and it came with a price tag to match: $662 million. David Gilmore, the housing authority’s director at the time, described HUD’s $30.5 million grant as a “down payment of sorts.” The idea, Gilmore said, was to use the Iberville-Treme grant as leverage to marshal the private investment and public resources needed to complete the massive project.

To date, 228 apartments on the Iberville site at the edge of the French Quarter are complete, with 269 more on the way over the next two years. The first residents moved into handsome new apartments in April, though they now live in the middle of a construction zone.

Off-site, away from the original Iberville footprint, the pace has been near glacial.

Though housing authority officials warned its partners not to speak with the press about the matter, several people familiar with the off-site component say it’s utterly stalled.

“That original plan, you can throw it out the window.”

To date, only 167 of the promised off-site 1,493 apartments have been completed and only a handful more are in the pipeline. Also, the newly created apartments are not spread throughout the trapezoid, to prompt the neighborhood-wide transformation envisioned in the proposal. Rather, the bulk of the off-site apartments, 112 senior-living apartments on Canal Street, are one block from the Iberville site.

In fact, it now looks as though most of the 2,314 apartments may not happen at all. Gone too are the hopes for revived neighborhood streetscapes bursting with cafes and retail stores. “That original plan, you can throw it out the window,” says Gregg Fortner, the housing authority’s new executive director. “We only care about the 821 subsidized units. HUD will not bother us if we get to 821 replacement units.”

But HUD spokeswoman Patricia Campbell says that the 821 replacement units — which must be affordable to extremely low-income renters — are only a portion of HANO’s commitment. “In addition, HANO committed to develop 1,493 additional non-replacement units in the designated Choice Neighborhood,” she wrote in an emailed statement.

Now it will be up to New Orleans officials to figure how to make good on the promise. Brad Howard, spokesman for New Orleans Mayor Mitch Landrieu, emphasized that the city is committed to building far more than the 821 deeply affordable units that are part of the Iberville-Treme plan. “Our resolve remains steadfast,” he said in a statement. “We are building new, low, moderate, and market-rate housing that will strengthen Iberville and Treme resulting in a positive impact that will be felt throughout New Orleans.”

Construction has been ongoing on the Iberville site since 2013. (AP Photo/Gerald Herbert)

“Inflated Developer Expectations”

In recent months, the first on-site apartments have now been leased under the name of Bienville Basin, or as the developers are calling it, “the Basin.” Progress has been made here on this 27-acre site, despite delays prompted by the discovery of an historic cemetery under one of its blocks.

Here, two more phases of construction are underway and moving the site closer to its endpoint. Because Louisiana law prohibits new apartments on top of historic graves, the number of apartments slotted for the site has been reduced from 900 to 706 apartments, just a few hundred more than the 496 apartments already in the pipeline.

What was once outdated and rundown is now modern and sleek. Some of the complex’s two- and three-story brick buildings have been demolished and replaced; others are being restored, with bricks tuck-pointed and wrought-iron balconies restored for the first time in decades.

Residents who have moved back to the buildings no longer must cope with rats that burrow near the foundations or puddles of sewage in the courtyards. They don’t have to flip a switch after using the bathroom sink in order to use the bathtub. No longer are they responsible for buying their own window air-conditioning units to keep apartments from sweltering in the hot, humid summers.

Yet painstaking renovations aren’t cheap. A report by the D.C-based Urban Institute, a nonpartisan think tank that often evaluates social programs, noted that “[Iberville-Treme’s] financing challenge may also be exacerbated by what public-sector actors call inflated developer expectations about per-unit costs and what the public sector will support; HANO has repeatedly had to explain to the developers that HUD places a maximum on the total cost per unit.”

HANO’s explanations didn’t necessarily lead to cost savings, however. The average total development cost per unit for the first three on-site phases of Iberville was $288,816, according to HANO. The price tag put HANO close to the HUD cap, which is $296,870 for a 1,500 square-foot unit.

Off-site, the endpoint is nowhere in sight.

In 2011, HUD required HANO, like all its grantees, to secure purchase options on off-site properties that could be developed into off-site apartments. But most of those options expired years ago. After a bidding war, HANO was recently able to purchase part of a former Winn-Dixie store immediately adjacent to the Iberville site, where 400 off-site apartments may be located.

If that happens, the Choice Neighborhoods initiative can take credit for revitalizing a small corner of the New Orleans trapezoid, where a sum total of 1,218 apartments will stand, on the Iberville site and in the two buildings that abut the site.

A mile away from the Iberville site, the house on Governor Nicholls sits untouched. It was given to HANO in 2012 by the Louisiana Land Trust, which handles properties sold by families who opted not to return after Hurricane Katrina. A HANO spokeswoman said that the Iberville-Treme plan did not include developers’ plans for any of the 21 houses and lots that have sat untouched since HANO acquired them at no or low cost from other public agencies as part of the initial grant application.

Three years ago, from his porch, Miller saw a maintenance man drive up and attach a Housing Authority of New Orleans sign to the house’s facade. So he knows that it changed hands around then. But to date, no other ripple effects of the grant have reached Miller’s block. “As far as anyone doing work, I haven’t seen it,” he says.

Testing the Public-Private model

HANO created its first mixed-income development in 2002. Key money for the redevelopment came from a tax increment financing district using sales taxes from the city’s first Walmart. The big-box store now sits at the edge of River Garden, where tidy townhouses and boxy single-family homes line streets with bright green lawns and private driveways. The developer was New Orleans-based Historic Restoration Incorporated (HRI), one of the two companies selected to re-make Iberville.

HANO never looked back after River Gardens, where about 600 apartments — 182 public housing units and 424 higher-dollar rentals — replaced 1,600 public housing apartments.

River Garden, pictured, showed New Orleans a new model for public housing. (AP Photo/Cheryl Gerber)

After that, HANO partnered routinely with private developers and turned several more public housing sites into mixed-income communities. But, like many complexes rebuilt by the HOPE VI program, HANO’s new developments usually became islands of shiny, colorful buildings stuck in still-troubled neighborhoods with sporadic bus service, poor schools and little green space. And despite the new housing, residents still faced the same limited opportunities they’d always faced. High rates of unemployment were common, as were menial-labor jobs that carried no hope of advancement. Shocking numbers of residents lived with untreated physical and mental illness.

Choice Neighborhoods was meant to address those deficits, by providing healthcare, education and training and knitting public housing revitalization efforts into the neighborhoods surrounding them. “(It) not only transforms distressed public housing but heals entire communities,” said then-HUD secretary Shaun Donovan, who left the agency last year and now heads up the administration’s Office of Management and Budget.

The ambitious program set a higher standard for local housing authorities and their cities. “It’s HOPE VI on steroids,” Maria Maio, head of the Jersey City Housing Authority, told a U.S. Senate subcommittee. Maio noted that HUD required that housing authorities and mayoral administrations write Choice Neighborhoods proposals jointly so that they would exert public effort and resources toward a common goal. “This is not a plan, this is a vision,” Maio said, noting, for instance, that her agency is now collaborating with prenatal providers to improve mother and infant health. It’s a relevant issue to her residents but not one that was previously considered part of her agency’s scope, she said.

Back in New Orleans, Gilmore too was sold on the initiative. It “represents a revolutionary shift in federal policy, rooted in the belief that truly improving areas plagued with blight and poverty will require more than rebuilding funds,” he wrote in an April 2011 letter to the Louisiana Housing Finance Agency.

Johnny Anderson, 12, plays basketball in the Iberville housing projects in 2012, before the redevelopment began. (AP Photo/Gerald Herbert)


Yet the Choice Neighborhoods pot of money is very tight. In New Orleans, only an estimated $24.4 million will go to housing while the remainder of HANO’s $30.5 million grant will go toward resident services and supports.

Some public housing leaders described HUD’s 2011 grants as “pilot” grants, since they totaled only $122 million. The following year, when HUD proposed nearly tripling that amount to a total of $350 million, some housing experts were supportive of the concept but said that the budget was still insufficient. “$350 million, spread over the U.S. for distressed neighborhoods is a drop in the bucket,” said Anthony Sanders, a professor of finance at George Mason University, who noted in his testimony to a Congressional committee that Stanford University had recently spent that amount to construct two buildings.
(In the most recent round of Choice Neighborhood grants, four cities — Pittsburgh, Philadelphia, Norwalk, Conn. and Columbus, Ohio — received $30 million, for a collective total of $120 million, $2 million less than the amount allocated for the program in 2011.)

The $30.5 million that landed in New Orleans seems particularly small because of what was proposed. Other 2011 Choice recipients, particularly Boston and Seattle, had much more modest plans, calling for 129 and 238 new apartments respectively.

Each has made significant progress. Boston, which received a $20.5 million grant, was the first Choice Neighborhood grantee to break ground in 2013 on its project, in the Quincy Corridor. Today, the apartments are occupied and the corridor is home to new businesses, including the $15 million Bornstein & Pearl Food Production Center. Yesler Terrace, Seattle’s first public housing development, received $10.27 million from HUD and is nearly finished with 238 mixed-income apartments in a building that also has ground-floor retail.

The plans in Chicago and San Francisco call for roughly 1,000 apartments each. And then there’s the New Orleans plan, which weighs in the heaviest, at 2,314 total apartments.

Getting to 821

If, this time, the Housing Authority of New Orleans may be stumbling because it aimed too high, its history reveals a pattern of chronic underachievement.
For decades before Hurricane Katrina, HANO had a disgraceful track record. The agency’s reputation for corruption and incompetence dates back to 1979, when it was first deemed “troubled” by HUD. It’s a status the agency would retain intermittently for three decades.

Then, a few months after Katrina, HUD announced plans to shutter and demolish the so-called Big Four — four of the city’s largest housing developments, which had been home to 3,077 public housing households before the storm. Because of HANO’s poor reputation for follow-through, the decision was particularly controversial, provoking a federal lawsuit and a City Hall protest that made national headlines.

Even the protestors could not have imagined a worse timeline than what ensued. Two of the developments could not complete financial deals before the national housing market bottomed out. That left half the sites at a standstill. Even five years after Katrina, in 2010, when HANO announced that it was going to apply for a Choice grant for Iberville, only 1,000 apartments were complete on former Big Four sites.

Understandably, many Iberville residents were skeptical. Many had relatives displaced from other complexes. “Bring my people home from Texas before you knock down Iberville’s bricks,” Iberville resident Ingrid Thompson said in 2010.

According to the most recent HANO data, the Big Four sites have now reached 1,829 apartments, less than half of the 4,000 promised when the redevelopment began. Fewer than half of the new units have public-housing-level rents.

A woman walks past new public assisted housing where the Lafitte housing projects once stood, with the elevated Interstate 10 on Claiborne Ave. in the foreground in New Orleans. (AP Photo/Gerald Herbert)

“HUD and HANO always go back on their promises,” says Bill Quigley, who directs the Gillis Long Poverty Law Center at Loyola University in New Orleans and has represented HANO tenants for decades. “They always end up saying, ‘Oh, we have less money than we thought,’ or ‘We will do more later.’ The fact is that poor people were living on property which could be more profitably developed by and for other people.”

Recently, after a decade of federal oversight, HANO got a clean bill of health and was returned to the governance of a local board, which hired Fortner.
Fortner says that, as far as the Iberville-Treme plan he inherited, he has no off-site goals in mind, beyond the 821 units he sees as his mission. He noted, however, that his partners at City Hall would like to see him hit the 2,314 total. (City officials referred all data questions to HANO.)

But at this point, Fortner doesn’t even know how his agency will reach 821. “That’s why we have developers,” Fortner says. “The Housing Authority isn’t smart. Our developers have to use their creative juices to get us to 821.”

Still, getting to HUD’s 821 mandate means building more than 821 units. HUD requires public-housing-level rents on all of the 821 required apartments, but due to the way mixed-income developments typically are financed, only one-third of apartments built in each phase have public-housing-level rents.

A few weeks ago, not long after I asked for particulars about the Iberville-Treme plan, Fortner convened a meeting, asking developers to deliver “a new roadmap” to him by late last week. “From there, it will move at whatever pace the funding does,” he says. The new plan is under review, according to HANO.

“We are working with our developers to move toward this collective goals as quickly as possible,” Howard says.

A process that requires patience

It will take years to understand how all of this work with housing and residents will play out. Today, an analysis of HANO’s development process is, by necessity, a cut-and-paste job of bits and pieces of information from dozens of sources.

A broader context was impossible to get from HANO, since its staff refused to turn over the progress reports that HUD requires it send each quarter with “narrative statements on their progress” along with “best practices and lessons learned.” (The Urban Institute report cited such “documents and progress reports submitted by the grantees to HUD” as a source for its research.) A HANO spokeswoman said that the agency staff doesn’t consider the reports public record because they merely type them into the HUD computer system every month and don’t keep copies of what they type. (HUD spokespeople said that a Freedom of Information Act request could be filed with HUD, but that it wouldn’t produce anything until long after this piece was posted.)

Context was also not forthcoming from Iberville-Treme developers. Both New Orleans-based HRI and St. Louis-based McCormack Baron Salazar declined to comment, saying that HANO was handling all media requests for the project.

Both developers have years of experience in the field. Though HRI started out transforming historic buildings into luxury lofts in the city’s Warehouse District, it gained a national reputation with the redevelopment of public housing at River Garden and has built affordable housing across the city, including affordable artists’ lofts in the gentrifying Bywater neighborhood. McCormack Baron has been around longer and is well known nationally for its public housing redevelopments, including one of the post-Katrina Big Four, the former C.J. Peete in New Orleans, which is now called Harmony Oaks. McCormack Baron is sometimes credited with laying the groundwork for what now is Choice Neighborhoods. For years, in all its redevelopments, it has paired with schools and provided resident support through longtime nonprofit affiliates like St. Louis-based Urban Strategies, which is tracking and working with Iberville residents to improve their health and job outcomes as part of the Choice grant.

Urban Institute researchers will be key to understanding Choice Neighborhoods implementation, since they are closely following the process, collecting data and conducting interviews with key players, at the first five Choice Neighborhoods sites, including Iberville-Treme. But while Urban Institute’s findings are detailed and comprehensive, the only published Choice Neighborhoods report covers the first year of the grant, through the end of 2012. HUD is reviewing a subsequent report, which covers progress from 2011-2013.

That Urban Institute report singles out the New Orleans project as different than the others in a few ways. Of the five sites, New Orleans has “the most significant off-site housing component,” says senior research associate Leah Hendey, who co-wrote Urban’s report with colleague Rolf Pendall.

As the Urban Institute report documents, many of the Choice Neighborhood pieces have come through in New Orleans: Urban Strategies has been actively engaging residents in services and case management; crews are working on a new streetcar track down North Rampart Street; and an opening is imminent for the Lafitte Greenway, a linear bicycle and pedestrian park that connects the Iberville site to City Park, New Orleans’ largest public park.

Yet there have been challenges too. The city’s new public hospital, which many hoped would participate in job-training programs and provide an employment boost to residents, has again delayed its opening, citing a lack of money. Also, the closest school, Lagniappe Academies, has been closed down by the grant’s “partner,” the Recovery School District, and researchers say that the school district’s participation in Iberville-Treme “has not yet been evident.”

And though the researchers also describe the New Orleans plan as “complex and ambitious,” that doesn’t seem to be rooted in financial realities. The report found that “(t)here was consensus among the interviewees that there remains a significant financial gap around the housing plans, although most thought the gap would be filled in some way.”

Plus, the large number of off-site units “forced HANO into a different role than it has traditionally practiced — essentially as master developer for an entire neighborhood,” the researchers observed.

Though unspoken, there is an implication that perhaps HANO is not up to its new role.

A partner involved in the off-site process who had been told not to speak to the press says that it comes down to simple honesty. “All we’re asking is for HANO to own up to the successes and the failures,” he says.

In its statement, HUD seems to be asking observers to reserve judgment for a bit longer. “The development of over 2,000 units of housing is a difficult undertaking that take considerable time and work,” Campbell wrote. “HUD is working with HANO and the other Choice Neighborhoods partners to move forward as expeditiously as possible, but it is not unreasonable to expect delays in the process, given its complexity.”

As a self-described elder on the block, Miller often counsels patience to others. “But being patient is not the same as being satisfied,” he said recently, standing on the porch of his Governor Nicholls Street home.

Our features are made possible with generous support from The Ford Foundation.

Katy Reckdahl is a New Orleans-based news reporter who is a frequent contributor to the New Orleans Advocate and the Hechinger Report and has written for The Times-Picayune, The New York Times, The Daily Beast, The Weather Channel, The Nation, Next City, and the Christian Science Monitor.

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