Judging by the rumbling on Twitter, readers would be excused for thinking the only thing on the Louisiana ballot this past weekend was the governor’s election. While President Donald Trump tweeted incorrect polling data about the state’s democratic incumbent, Governor John Bel Edwards, and analysts mined the results for any indication of what will happen in 2020, New Orleans was reckoning with a different issue: affordable housing.
Throughout August, over 6,700 New Orleanians filed into the Orleans Parish Assessor’s office. Shocked by the office’s latest property assessment which raised property values by an average of 21 percent, they showed up to appeal the assessor’s conclusions. Another 7,500 submitted appeals online.
Rising home values mean rising property taxes. In a city where the median income is $38,721 and 26 percent of the population is below the poverty line, this is not something all residents can afford. According to advocacy group Together New Orleans, up to 2,000 residents will see a four-figure increase in their property tax next year. Over the next four years, the group predicts this number will jump to over 5,000.
Orleans Parish Assessor Erroll Williams has defended his assessment to multiple media outlets, calling it reflective of real estate market rates. For many feeling its sting, the assessment is also reflective of the magnitude of the affordable housing crisis in New Orleans.
This past weekend, residents had an opportunity to alleviate their increasing tax burden by voting on Amendment 4, a proposal to give the city the power to lower property taxes for homes in the line of fire. But while New Orleanians supported the measure, voters across the state also has a say. Sixty-three percent of Louisiana voters rejected the amendment.
Amendment 4 was a state constitutional amendment that would have allowed the city of New Orleans to exempt Orleans Parish properties of 15 units or less from any portion of property taxes for the purpose of promoting affordable housing. It would not apply to short term rental properties like AirBnB.
“What we're voting on is the opportunity to be able to make the law at the local level,”
State-level legislation is needed to address local property tax issues because, in Louisiana, the property tax rate is written into the constitution. All parishes must use this mandated formula to set their local tax rate. To make any change to how property taxes are determined, lawmakers must pass a constitutional amendment. This requires the approval of a two thirds majority in both state congressional houses and a majority of statewide voters.
The amendment passed the state legislature with bipartisan support, but received less enthusiastic support from state voters. It passed in Orleans Parish, where New Orleans in located, with 64 percent approval. Every other parish in the state voted against the bill.
“What we're voting on is the opportunity to be able to make the law at the local level,” said Maxwell Ciardullo, Director of Policy & Communications for the Greater New Orleans Fair Housing Action Center, a group that advocated for Amendment Four. “I would much rather make the laws at the local level in New Orleans, than have our state legislators from around Louisiana who don't understand our affordable housing crisis or how our city works make the law for us.”
This concept of tax manipulation to address the affordable housing crisis is not new. In 2014, The New York Times reported on how city governments in places like Boston, Philadelphia, Washington, Pittsburgh, Detroit, and more, are artificially deflating property taxes in areas where the home prices are rapidly increasing. Not only do these rising taxes impact homeowners, who may no longer be able to afford to live in their neighborhood, but renters, too, as landlords raise rents to help cover higher tax costs. In New Orleans, 60 percent of renters are cost-burdened, meaning they spend at least one third of their income on housing.
However, unlike northern cites, as an article published by Rice University’s Kinder Institute for Urban research points out, gentrification in the Sun Belt has been characterized a lack of city and state regulation. New Orleans is no exception.
According to Mayor Cantrell, it took the city 10 years to adopt a housing plan after Hurricane Katrina. In the intervening decade, the city saw a decrease in public housing, an increase in wealthier white, college-educated residents, an influx of more expensive new construction, and the arrival of AirBnb.
“Even at a time when many of our residents were feeling the crunch of the affordability issue, conversations about policies maybe weren't as proactive as they as they needed to be,” John Pourciau, Mayor Cantrell’s Chief to Staff, said in an interview before Saturday’s election. “So we're trying to make up for lost time and get a lot of those solutions on the ground.”
Mayor Cantrell wanted to use Amendment Four to implement measures similar to those other cities have used for years. The mayor has said that lowered taxes can be used to keep homes affordable for longtime residents, prevent small landlords from raising rents, and incentivize developers who can revitalize blighted property and build affordable housing. Moreover, as state and federal funding for local affordable housing continues to diminish, she said Amendment Four represented a way make up for lost resources.
Gentrification in the Sun Belt has been characterized a lack of city and state regulation. New Orleans is no exception.
Overall, community leaders and housing advocates showed enthusiasm for Amendment Four. Presidents of multiple neighborhood organizations said they were excited to see the city finally tackling this crisis that has changed the make-up of their communities.
“I I think [Amendment Four] is a good idea,” said Don Wentworth, President of the Faubourg Tulane Gravier Neighborhood Alliance. “My property taxes doubled. Of course, I’m for it.”
In the neighborhood Wentworth represents, taxes increased an average $820 in the property reassessment. The median income in the area is $15,466.
As the elections results made clear, passing Amendment Four depended on more than the support of New Orleans residents. As a state, Louisiana benefits from the city’s tourism industry. According to Ciardullo, if Amendment Four had been successful, it would have helped secure that revenue source for the state, as well as provide a model for other parishes to deal with their own affordable housing struggles.
Now that local control of property taxes is off the table, New Orleans officials will have to look to other affordable housing solutions.
In November, when the gubernatorial runoff takes place, New Orleans voters will have the option to approve another piece of Mayor Cantrell’s public improvement and affordable housing plan: $500 million in bonds to be sold by the city. Revenue from the bond sales will be used to largely to increase affordable housing opportunities, but also to fund infrastructure repair, libraries, and more. This time, Mayor Cantrell doesn’t need statewide support. Only Orleans Parish residents will vote on this measure.
New Orleans is just one of many southern cities trying to address the generations of prejudice burned into city maps with Jim Crow laws, redlining, and now gentrification. Last month, Mayor Cantrell signed onto a letter with the mayors of Birmingham, Jackson, Mississippi, and Columbia, South Carolina. The four African American mayors laid out a “roadmap” for presidential candidates to engage with southern voters. The first issue the letter addresses: affordable housing.
Porciau said that, overall, it’s exciting to see Southern mayors tackling tough issues––especially, “Southern female mayors of color, looking at solutions that maybe hadn't been tried before and [pushing] back on the idea that these problems are intractable.”