The problem with New Orleans and its affordable housing difficulties Edmund Burke captured some 235 years ago: to make us love our country, our country ought to be lovely.
And New Orleans isn’t. Certainly, it has its ramshackle charm, but that obviously isn’t enough to prevent its depopulation, which in turn has made it just about the worst housing market in metropolitan America. In the 2022-23 period, it was the third largest loser in percentage terms of residents among core metropolitan cities, and from 2020 it has been the biggest loser of those, in raw numbers nearly 26,000 residents or 7 percent. In the past ten years it has been 3.3 percent, and since 1950 nearly by half.
This has been reflected in a lousy housing market. Of the 100 largest metropolitan areas, it ranks from 2012 96th in price appreciation, because of soft demand. Meanwhile, at 7.4 months on average on the market it has the 11th highest housing supply and its mortgage default rate is 30th highest at 13 percent. If it were just New Orleans and not also including six surrounding parishes the figures likely would be worse.
So, what has the city concentrated on to attract people to boost prices and cut housing stock? Not making it a more economically healthy area. It has the highest property taxes of any of the state’s largest cities both within its borders and (by far) levied, and charges 10 percent sales tax as a base but higher in certain areas like the Vieux CarrĂ©, none of which is conducive to attracting business and the workers and economic activity that would ensue. And its government continues to perform in a dysfunctional manner across a number of areas, one of which directly concerns housing provision.
In the past few years, the city has paid out on average $25 million a year to subsidize the building of presumably affordable housing, yet over a third of renters continue to be severely cost-burdened. Worse, it began the practice of mandatory inclusionary zoning that discourages building dedicated low-income housing, and, worst yet, last year voters decided to throw more money at the problem by amending the city charter to put at least two percent of budgeted revenues into a housing trust fund to subsidize even more building.
More government intervention isn’t going to work. You can’t spend you way out a huge chunk of your labor force being street performers, wait staff, and chambermaids unless taxes and spending get cut, such as less going out the door on housing subsidies. If more has to be spent, public safety would be a good place to start to bring down the third-highest murder rate among major cities.
Dysfunction, high crime, and reduced economic opportunity all combine to drive people away from the city – all a consequence of city policy or ineptitude. Yet the roster of potential elected officials to take charge after fall elections looks uninspiring at best, at worst as clueless as the current and past batches likelier to make the problem worse. Burke’s advice goes unheeded, making for an unvirtuous cycle where fewer affordable housing options means fewer people meaning less economic growth to make things more affordable to more people. If New Orleans wants to grow out of this problem, it will need to shrink government involvement that at present makes it unlovely.
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