JARED BREY APRIL 11, 2019
Late last month, the New Orleans City Council unanimously approved an inclusionary zoning policy requiring that developers provide some affordable units in the city’s strongest housing markets. In “core” neighborhoods like the French Quarter and the Central Business District, developments must include 10 percent affordable units, and “strong” neighborhoods like Tremé, Bywater, and the Lower Garden District must set aside five percent of the units in a multifamily project. In “transitional” neighborhoods, developers would be incentivized but not required to build affordable units. Under the new law, the reduced-rate units would need to be affordable for residents earning up to 60 percent of the median income, and affordability restrictions would last for 99 years.
Andreanecia Morris, executive director of HousingNOLA,says that as the city’s housing crisis has matured, the conversation turned from whether to adopt inclusionary housing requirements to how to do it best.
“Part of the discussion around mandatory inclusionary zoning or inclusionary housing policies deals with feasibility,” Morris says. “Is it possible to do these kinds of things? And is it also possible to do them in a way that creates the units?”
The city council has been discussing various approaches to inclusionary housing for several years. The city enacted a voluntary inclusionary zoning law in 2015, giving developers a density bonus in “high-opportunity” areas in exchange for reduced-rate units. The policy has only worked in limited fashion.
Mayor LaToya Cantrell, who took office last year, had helped to push forward affordable-housing policies during her time on the city council, and her administration began putting the pieces of a mandatory inclusionary zoning policy together last fall, says John Pourciau, her chief of staff. The planning commission backed a set of inclusionary policies in November, and the city then hired HR&A Advisors to complete a study looking at the specific requirements that would work best in the New Orleans housing market.
HR&A, which has also worked on inclusionary housing policies in Detroit, Columbus, Cambridge, Massachusetts, and other cities, completed a market study and presented it to the city council in February. From the beginning, says Phillip Kash, a partner at HR&A, New Orleans officials were saying publicly that they didn’t want the policy to hurt the housing market or development in the city more generally. Developers often argue that inclusionary zoning requirements push development to less regulated markets. At a city council hearing last month, representatives of the Home Builders Association of Greater New Orleans claimed that the new law would make it difficult or impossible for small multifamily projects to work. At the same hearing, some advocates said the policy could have gone further—that the city was too timid about how it would impact development. But Kash says that in most cases, the private market and the city “generally have some common goals.” Reducing the overall amount of housing development wouldn’t be good for affordability.
“If you’re not building as much, the same number of yuppies are still coming to your community, so they’re probably gobbling up all the housing,” Kash says.
The approach of breaking the requirement down into different submarkets was a recognition that too-stringent requirements outside the most in-demand neighborhoods would lower housing development overall. HR&A tried to balance the greatest need—housing for families earning around $30,000, or about 60 percent of median income—with requirements that would be feasible in different neighborhoods. As they said in their presentation to the council, requiring deeper affordability or a greater share of affordable units in new projects was simply unlikely to work, because such projects wouldn’t reliably turn profits for developers. The law that the council adopted basically enacts the study recommendations.
“It’s a really good example of how sometimes policymaking is hard, but if you’re focused on the issue and you’re collaborative and you’re intentional, you can get somewhere,” Pourciau says. “The mayor is excited for the policy and glad that the work that has been done on this has paid off with a real win for affordable housing in the city.”
The work isn’t entirely done. The city council still needs to adopt maps that determine which specific properties are subject to which requirements. Kash, of HR&A, says that mapping can be the trickiest part of adopting inclusionary zoning policies, because “if you draw a line on one side of the street and you’re not thoughtful, you can move the development to the other side of the street.” And the law includes a provision that requires the council to revisit the maps after two years, to make sure the requirements are keeping up with market conditions.
Even if the policy works at its best, of course, it will only provide a fraction of the affordable units that New Orleans needs. According to HR&A’s study, a policy like the one the council adopted would have created 126 units across 14 buildings if it had been implemented in 2014. HousingNOLA calls for 33,000 new units of affordable housing across the city. Morris, the executive director, says the group will celebrate every new unit it can get, but the passage of inclusionary zoning is even more exciting for the political progress it represents.
“We’re really excited about this,” Morris says. “We know it’s not going to yield the 33,000 units that we need, but more than the units, it is also a signal that New Orleans is going to put housing first, and it’s going to put its people first. And that’s how we get the rest of the units.”
This article is part of Backyard, a newsletter exploring scalable solutions to make housing fairer, more affordable and more environmentally sustainable.