Affordable Housing Challenges

The Current State of Affordable Housing in New Orleans

According to the 2024 HousingNOLA Annual Report Card, New Orleans is facing a severe affordable housing crisis, receiving an overall failing grade of 44% in its efforts to meet the housing needs of its citizens. This marks the sixth consecutive year that the city has failed to adequately address its housing challenges, suggesting a persistent and worsening situation.

Key Statistics

New Orleans currently has 158,828 housing units but needs more than 55,000 additional affordable rental opportunities to properly house all residents. The city also needs to create first-time homeownership opportunities for approximately 21,000 potential buyers who are being stalled by an insurance crisis and lack of financial options.

Between September 2023 and August 2024, New Orleans created only 200 new affordable housing units, a number far below what is needed to address the shortage.

Housing cost burden statistics reveal the severity of the problem:

• 41.2% of homeowners with mortgages are cost-burdened (paying more than 30% of income on housing)
• 19% of homeowners without mortgages are cost-burdened
• 58.8% of renters are cost-burdened

The median monthly mortgage payment in New Orleans is $1,753, with approximately 43% of households paying between $1,000-$2,000 monthly and about 18% paying $3,000 or more. For households without a mortgage, the median monthly payment is $594, with 43% paying between $250-$599 per month.

How Did New Orleans Reach This Crisis Point?

The affordable housing crisis in New Orleans has developed through a combination of factors:

1. Post-Katrina Housing Policies

After Hurricane Katrina, exclusionary policies made it impossible to rebuild small multi-family housing structures that historically created naturally occurring affordable housing across New Orleans neighborhoods. These restrictions lasted for nearly a decade, permanently altering the housing landscape.

2. Climate Change and Insurance Crisis

The affordable housing crisis has evolved into what HousingNOLA describes as an "insurance crisis fueled by climate change," which is pushing both renters and homeowners out of their homes. Rising insurance rates are creating unsustainable economic pressures that negatively impact housing affordability across the city.

3. Racial and Economic Disparities

The majority of the city's subsidized housing is located in lower-income neighborhoods of color, reflecting ongoing issues with housing equity and integration despite Fair Housing Act protections.

4. Displacement and Gentrification

Displacement has become a significant problem in New Orleans, described by HousingNOLA as a "scourge" that serves as "further proof of our inherent inequity." The organization emphasizes the need to develop housing opportunities that keep people in high-opportunity neighborhoods while bringing amenities and economic opportunity to neighborhoods with affordable housing options.

5. Housing Supply vs. Demand Mismatch

There is a significant mismatch between housing demand and supply across income levels. The most severe shortage is for households earning 0-30% of Area Median Income (AMI), or $0-$25,000 per year. This group represents 41,421 households but only has 25,486 housing units available at their affordability level.

Key Challenges Facing New Orleans Housing

1. Insurance Crisis

An "out-of-control insurance crisis" is stalling potential homebuyers and contributing to housing insecurity for existing homeowners. The 2024 Louisiana Regular Legislative Session passed some bills aimed at lowering insurance costs, but certain policies championed by the Commissioner of Insurance are actually "damaging to efforts to lower premiums," including removing the "three-year rule" which had forbidden insurers from dropping policies that are three or more years old.

2. Insufficient Housing Production

The city is creating far fewer affordable housing units than needed. Between September 2023 and August 2024, only 200 new affordable housing units were created, making minimal progress toward the needed 55,000 additional rental opportunities.

3. Homelessness on the Rise

Homelessness in New Orleans and Jefferson Parish has risen for the second straight year as rents have soared and pandemic congressional housing resources targeted specifically to people experiencing homelessness have ended. Local homelessness is up 20 percent over the past two years, with this year's official count 5 percent higher than last year's. A total of 1,454 people are now living in homeless shelters or on the street, compared to 1,390 a year ago and 1,214 two years ago.

4. Environmental Sustainability

In a city like New Orleans, it has become imperative to learn to live with water and embrace green technologies to either slow or reverse the effects of climate change. Climate change increases the frequency and intensity of storm events, and the increasing rate of coastal land loss in Louisiana poses significant danger to the New Orleans region.

Solutions and Progress

Despite the challenges, there have been some positive developments and proposed solutions:

1. Housing Trust Fund Creation

In November 2023, the New Orleans City Council voted unanimously to create a Housing Trust Fund (HTF). In December 2023, the Council passed their $1.57 billion executive budget for the 2024 fiscal year with a $17 million investment in the newly created Housing Trust Fund. In March 2024, the Council voted to put the HTF before voters on November 5, 2024.

If passed, the Housing Trust Fund will have three priorities:

1. Creating affordable rental housing including filling financial gaps and incentivizing landlords
2. Preserving affordable rental housing including supporting small landlords to make critical improvements
3. Creating and preserving affordable homeownership opportunities, including the rehabilitation of formerly blighted properties and adding fortified roofs

2. Insurance Reform

In June 2024, Governor Landry signed SB484 (Act 533) into law, which was drafted at the Statewide Insurance Task Force's urgency to address lingering issues with the original Fortify Homes Program. The bill will allow for the commissioner to apply for funding for the program, engage in cooperative endeavor agreements to facilitate grants, and require the commissioner to perform actuarial studies for justifiable discounts and to publish said discounts on the LDI website. An additional $15 million was allocated for the program.

3. Comprehensive Housing for All Action Plan

HousingNOLA has developed a Housing for All Action Plan that strives to guarantee housing and ensure that every neighborhood achieves "Golden Pearl status"—creating an equitable, affordable, and strong city. The plan addresses four housing gaps: cost burden, racial wealth gap, housing quality and availability, and displacement.

By implementing this plan, New Orleans could:

• Eliminate energy-related cost burdens for all households
• Eliminate cost burden for all households earning less than $40,000 per year
• Create over 38,000 new resilient, affordable homes
• Put over 3,000 vacant properties back on the tax rolls
• Provide supportive services to help house homeless families and adults
• Preserve over 13,000 expiring affordable housing units
• Generate over $13 billion in increased spending in New Orleans over the next 30 years

4. Sustainable Housing Initiatives

Several sustainability initiatives are underway, including:

• Working with realtors to include energy efficiency measures on their Multiple Listing Service (MLS) sheets
• Implementing policy changes recommended in the 2018 New Orleans Rental Market study to address high utility costs
• Working with statewide housing partners to implement energy efficiency programs

In November 2023, the City Council passed amendments to Community Solar rules that expand the definition and use standards for community solar opportunities, allowing entities beyond utility companies like Entergy to participate.

5. Budget Recommendations

HousingNOLA has called on the Mayor and City Council to consider utilizing funds earmarked for rental home repair programs to address the insurance crisis by standing up a Fortified Roof Repair program for affordable rental units. This intervention could lower insurance costs and stabilize homes, preventing issues like pests, mold, and termites that impact residents' health.

The Path Forward: A Comprehensive Approach

Addressing New Orleans' affordable housing crisis requires a multifaceted approach:

1. Increased Housing Production

The Housing for All Action Plan estimates a total cost of approximately $31 billion to comprehensively address the housing crisis, including:

• $4 billion for rehabilitation of homes for sustainability, energy efficiency, and solar
• $4.5 billion for preservation and acquisition-rehab of existing units
• $15.7 billion for new construction of affordable homes
• $7.2 billion for direct financial assistance to households

2. Energy Efficiency and Resilience

Building more resilient roofing can ease pressure for both homeowners and renters. Homes with newer, higher standard roofs with third-party verification can see dramatically reduced premium rates, potentially saving homeowners thousands of dollars or bringing homeowners who were forced to drop coverages back into the market.

3. Land Use Reform

HousingNOLA has reviewed and assessed that the recommendations within the city's Housing Ecosystem Plan further support the need for land use reform throughout the city. The organization supports Master Plan amendments that promote transit-oriented development, increased density, diversity of housing stock, and expand housing opportunities in older neighborhoods.

4. Addressing Short-Term Rentals

HousingNOLA supports the development and implementation of enforcement for short-term rentals by bringing platforms into compliance with expectations about monitoring, de-listing, data transparency, accountability, and residential limitations. In September 2024, the city council introduced legislation that would impose fines to platforms that allow for illegal STRs in Orleans Parish.

5. Dedicated Revenue Sources

The Housing Trust Fund, with an initial allocation of $17 million as part of the 2024 City Budget, will have a dedicated 2% from the general fund if approved by voters. Unlike previous attempts to fund affordable housing, this would NOT be a new tax or millage and would use existing revenue.

Organizations Actively Working on Affordable Housing Solutions in New Orleans

Based on the information from the 2024 HousingNOLA Annual Report Card document, several organizations are actively working to address the affordable housing crisis in New Orleans. Here's a comprehensive overview of the key organizations and their roles:

Leading Housing Advocacy Organizations

1. HousingNOLA

HousingNOLA is described as "a 10-year partnership between community leaders, and dozens of public, private, and nonprofit organizations working to solve New Orleans' affordable housing crisis." They serve as the primary convener of housing stakeholders in the city and produce the annual Report Card that tracks progress on housing goals.

2. Greater New Orleans Housing Alliance (GNOHA)

GNOHA is "a collaborative of home builders and community development organizations advocating for the preservation and production of affordable housing." They work alongside HousingNOLA, with GNOHA focusing on advocacy to ensure "that the community-crafted housing plan is put into action by local policymakers."

3. HousingLOUISIANA

HousingLOUISIANA is "a statewide alliance of housing practitioners and advocates whose primary goal is to ensure that the housing needs of all Louisianans are met." They work through "a statewide network of the nine regional housing alliances and working groups" across Louisiana, including New Orleans. Their Insurance Task Force has been instrumental in pushing for policy changes to address the insurance crisis affecting housing affordability.

Government Agencies

4. City of New Orleans Office of Community Development (OCD)

This office oversees various housing programs, including the Owner-Occupied Rehabilitation program that provides funds to assist homeowners with repairs and renovations.

5. Housing Authority of New Orleans (HANO)

HANO manages Housing Choice Vouchers and provides affordable housing opportunities. As of the report period, they were overseeing 18,251 vouchers and had created 73 new affordable housing units between September 2023 and August 2024.

6. New Orleans Redevelopment Authority (NORA)

NORA manages property auctions and redevelopment initiatives. Between September 2023 and August 2024, NORA auctioned 78 properties and contributed to creating 13 new affordable housing units. If the Housing Trust Fund ballot measure passes, NORA will be one of the agencies administering the funds.

7. Finance New Orleans (FNO)

FNO created 27 new affordable housing units between September 2023 and August 2024 and has launched a green mortgage program to provide funding for homeowners to upgrade their homes to make them more resilient and help lower insurance costs.

8. Office of Inclusionary Zoning

This office works on zoning policies to promote affordable housing development. According to the report, they created 192 new affordable housing units in the first half of the reporting period.

9. Louisiana Housing Corporation (LHC)

The LHC is a state agency that provides housing opportunities. However, the report indicates they created 0 new housing opportunities in New Orleans during the reporting period.

Community Development Organizations

10. UNITY of Greater New Orleans

UNITY coalition works to end chronic homelessness of people with disabilities and reduce the average length of time families spend homeless. In September 2023, UNITY and Travelers Aid Society launched a Louisiana Housing Corporation Rapid Re-Housing Program to provide permanent housing primarily to people living on the street who were very ill or living in dangerous conditions.

11. Habitat for Humanity

Habitat for Humanity developed 13 affordable units without public subsidy between September 2023 and August 2024.

12. Jericho Road Episcopal Housing Initiative

Listed as a partner organization with representative Nicole Barnes serving on the Greater New Orleans Housing Alliance Board of Governors.

13. Neighborhood Development Foundation

Listed as a partner organization with representative Fred J. Johnson serving on the Greater New Orleans Housing Alliance Board of Governors.

14. Renaissance Neighborhood Development Corporation

Listed as a partner organization with representatives Victor Smeltz/Vanessa Levine serving on the Greater New Orleans Housing Alliance Board of Governors.

15. Travelers Aid Society

Working with UNITY to implement the Rapid Re-Housing Program and the City's Encampments Initiative to permanently house people living in homeless camps.

Energy Efficiency and Resilience Organizations

16. Alliance for Affordable Energy

Working with GNOHA to "implement policy changes that were recommended in the 2018 New Orleans Rental Market study to address the root causes of New Orleans' high utility costs for homeowners and renters."

17. Energy Efficiency for All (EEFA)

Working with statewide housing partners to "implement energy efficiency programs throughout the state" and recommending "the Affordable Home Energy Shot as a blueprint for energy efficient homes through electrification."

18. Thrive New Orleans

Working with HousingNOLA on a grant application that would "provide funding to train a workforce on resilient upgrades, which would also include modifications for disabled persons and the elderly."

Collaborative Initiatives

19. Own the Crescent

A program designed to "assist first-time homebuyers, landlords, and small developers find programs and resources to get their projects off the ground." Own the Crescent is also "working with the Thomas Consulting Group to stand up a Community Development Fund that will combine philanthropy, public and private monies dedicated to affordable housing."

20. Small Developer's Group

This group was "restarted in summer of 2024 to discuss funding options to help build affordable housing units in the Greater New Orleans area."

21. Workforce Housing Council

Has "pushed for allowances for housing units within commercial districts. In 2024, City Planning Commission and the City Council passed an ordinance that permitted dwellings above the ground floor in commercially-zoned districts."

22. Community Review Team

HousingNOLA continues to hold monthly meetings with its Community Review Team. This team engages with policymakers, such as meeting with Louisiana State Senator Royce Duplessis to "discuss the state's role in addressing housing issues and what challenges are faced in the legislative process."

Legal and Fair Housing Organizations

23. Louisiana Fair Housing Action Center

Will have representation on the City Council Advisory Committee for the Housing Trust Fund if the ballot measure passes in November 2024.

24. Southeast Louisiana Legal Services

Will have representation on the City Council Advisory Committee for the Housing Trust Fund if the ballot measure passes in November 2024.

Funding Partners Supporting Housing Initiatives

HousingNOLA's efforts are supported by numerous funding partners, including: JP Morgan Chase, 2030 Fund, Community Change, Kresge Foundation, National Low Income Housing Coalition (NLIHC), Funders for Housing and Opportunity, Energy Foundation, Greater New Orleans Foundation, Capital One, Ford Foundation, Southern Power Fund Award, Justice 40 Accelerator, Foundation for Louisiana, Power Coalition for Equity and Justice, Home Bank, Cadence Bank, and "the generosity of the people of New Orleans."

Collaborative Approach

What stands out in the New Orleans affordable housing landscape is the collaborative approach among these organizations. The report repeatedly emphasizes partnerships, coordinated advocacy, and multi-stakeholder initiatives. For example, the proposed Housing Trust Fund will be administered jointly by NORA and Finance New Orleans, with oversight from a City Council Advisory Committee comprising appointees from various stakeholders including government, advocacy organizations, and community representatives.

This extensive network of organizations working on different aspects of the housing crisis—from policy advocacy to direct development, from energy efficiency to legal support—demonstrates a comprehensive approach to addressing New Orleans' affordable housing challenges.

Conclusion

New Orleans faces a complex and severe affordable housing crisis that requires immediate and sustained action. The establishment of a Housing Trust Fund represents a significant step forward, but much more needs to be done to address the estimated 55,000 unit shortage of affordable housing in the city.

As HousingNOLA states, "The affordable housing crisis has now morphed into one where instead of talking about us versus them, we now have a singular threat: the insurance crisis." This creates both an urgent challenge and a unique opportunity to create "climate-ready homes for all."

Success will require collaboration between government agencies, private developers, community organizations, and residents to ensure that housing in New Orleans becomes more affordable, resilient, and equitable for all its citizens.

On this page

• Affordable Housing Challenges
• The Current State of Affordable Housing in New Orleans
• Key Statistics
• How Did New Orleans Reach This Crisis Point?
• 1. Post-Katrina Housing Policies
• 2. Climate Change and Insurance Crisis
• 3. Racial and Economic Disparities
• 4. Displacement and Gentrification
• 5. Housing Supply vs. Demand Mismatch
• Key Challenges Facing New Orleans Housing
• 1. Insurance Crisis
• 2. Insufficient Housing Production
• 3. Homelessness on the Rise
• 4. Environmental Sustainability
• Solutions and Progress
• 1. Housing Trust Fund Creation
• 2. Insurance Reform
• 3. Comprehensive Housing for All Action Plan
• 4. Sustainable Housing Initiatives
• 5. Budget Recommendations
• The Path Forward: A Comprehensive Approach
• 1. Increased Housing Production
• 2. Energy Efficiency and Resilience
• 3. Land Use Reform
• 4. Addressing Short-Term Rentals
• 5. Dedicated Revenue Sources
• Organizations Actively Working on Affordable Housing Solutions in New Orleans
• Leading Housing Advocacy Organizations
• 1. HousingNOLA
• 2. Greater New Orleans Housing Alliance (GNOHA)
• 3. HousingLOUISIANA
• Government Agencies
• 4. City of New Orleans Office of Community Development (OCD)
• 5. Housing Authority of New Orleans (HANO)
• 6. New Orleans Redevelopment Authority (NORA)
• 7. Finance New Orleans (FNO)
• 8. Office of Inclusionary Zoning
• 9. Louisiana Housing Corporation (LHC)
• Community Development Organizations
• 10. UNITY of Greater New Orleans
• 11. Habitat for Humanity
• 12. Jericho Road Episcopal Housing Initiative
• 13. Neighborhood Development Foundation
• 14. Renaissance Neighborhood Development Corporation
• 15. Travelers Aid Society
• Energy Efficiency and Resilience Organizations
• 16. Alliance for Affordable Energy
• 17. Energy Efficiency for All (EEFA)
• 18. Thrive New Orleans
• Collaborative Initiatives
• 19. Own the Crescent
• 20. Small Developer's Group
• 21. Workforce Housing Council
• 22. Community Review Team
• Legal and Fair Housing Organizations
• 23. Louisiana Fair Housing Action Center
• 24. Southeast Louisiana Legal Services
• Funding Partners Supporting Housing Initiatives
• Collaborative Approach
• Conclusion