April 22, 2015; New Orleans Times-Picayune
In New Orleans, the Jane Place Neighborhood Sustainability Initiative (JPNSI) is converting a historic building into a multi-unit apartment building. Two newsworthy aspects of this facility are that the organization is using a variety of different tools and techniques to fund the development, and that it will feature rents that are “permanently affordable.”
In many cities across the United States, the rising costs of renting a place to live have far outstripped increases in wages. A recent report demonstrates that in most cities around the country it is getting harder and harder to afford rental units, particularly in the walkable urban environments that younger people prefer. For example, in Los Angeles, the median rental cost rose from 34 percent of median income in 2003 to 47 percent in 2013. In New Orleans, the average mortgage has decreased from a high of 55 percent of annual income in 1982 to a little more than 15 percent in 2012. Rentals, on the other hand, have increased from less than 15 percent of income in 1982 to 35 percent in 2012.
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The Jane Place Neighborhood Sustainability Initiative was established in 2008 as “a housing and community development nonprofit committed to creating sustainable, democratic, and economically just neighborhoods and communities,” according to its website. Specifically, they are working in the Jane Place neighborhood, which has a long tradition of a vibrant mix of ethnicities and wealth, combining renters and homeowners.
Over the years, development has changed the neighborhood greatly since the days when Louis Armstrong was born there, and the growth of a nearby healthcare facility has caused a dramatic increase in the cost of homes and apartments. To stem this tide, and to establish a model of affordability that can preserve the area’s tradition of diversity, JPNSI purchased a building with the goal of converting it into a four-plex.
Using a community land trust (CLT) model, JPNSI hopes to establish this small facility as a model for “permanently affordable” housing. A CLT takes the value of the land off the cost of developing and maintaining a housing unit by splitting the ownership. Other methods of creating affordable housing, such as some low-income housing tax credits, can increase rents to market value 15 years after opening. With a CLT, the land is held in trust by the nonprofit and so enables the housing unit to remain affordable. According to a report shared by the National Community Land Trust Network, there were approximately 119 CLTs around the country as of 2007.
Using a mix of historic renovation tax credits, loans, and grants, JPNSI is spending approximately $1.2 million on converting the building into rental units that will initially be made available to renters earning 60 percent of the Area Median Income, or about $35,000 for a family of four. Reports scanned for this article did not indicate what the actual cost of renting one of the units would be.—Rob Meiksins