UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF LOUISIANA

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1 Case 2:06-cv Page 1 of 20 UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF LOUISIANA GREATER NEW ORLEANS FAIR HOUSING ACTION CENTER, and WALLACE RODRIGUE, Plaintiffs, and PROVIDENT REALTY ADVISORS, INC., Plaintiff-Intervenor, vs. ST. BERNARD PARISH and ST. BERNARD PARISH COUNCIL, Defendants. CIVIL ACTION NO. 2:06-CV SECTION C JUDGE BERRIGAN MAGISTRATE JUDGE SHUSHAN Expert Report Submitted by Kalima Rose Senior Director PolicyLink March 6,

2 Case 2:06-cv Page 2 of 20 TABLE OF CONTENTS I. Kalima Rose Credentials... 3 II. Key Findings... 3 III. Housing Market Conditions New Orleans Metro Area and St. Bernard Parish... 4 Table 1: Housing Lost due to Katrina and Rita and Potential Replacement:... 4 Map 1: Homeowner and Rental Unit Recovery in the New Orleans Metro Area, Aug Chart 1: Road Home Resources for Select Heavily Damaged Parishes... 7 Table 2: Temporary Housing As of February Table 3: Estimates of Affordable Housing Demand for All Renter-Occupied Households... 8 IV. Qualified Allocation Plan (QAP)and Piggyback Program Point Scoring... 8 V. For Sale and Rental St. Bernard Housing Market Conditions... 9 Table 4: Current Rental Market in St. Bernard Parish... 9 VI. Population Trends St. Bernard and Metro Region Table 5: Households Receiving Mail for St. Bernard Parish and the Metro Region VII. Labor Market Trends St. Bernard and Metro Region Chart 2: Job Vacancies in New Orleans RLMA1 by select occupation, Q Map 2: Public Assistance Projects in St. Bernard Parish Chart 3: Cost of St. Bernard Housing Compared to 30 Percent of Monthly Earnings for Industries Employing over 100 persons VIII. Key Conclusions

3 Case 2:06-cv Page 3 of 20 I. Kalima Rose Credentials I, Kalima Rose, Senior Director of Louisiana Recovery Initiative, have worked both nationally and internationally on housing and community economic development both programmatically and as a policy leader for the last 25 years. For the last decade, I have led the affordable housing work of the national policy organization, PolicyLink. I have worked with federal, state and local government officials, civic leaders, developers and nonprofits that are dedicated to housing and services for veterans, seniors, workers priced out of market rate housing, and those with disabilities. This work consists of bringing together: the best information on housing need; an assessment of the distribution of housing at different levels of affordability across jurisdictions and regions; best practices employed by localities and states across the nation; and the resources, public policies, and political will to address the needs. In this capacity I have authored 16 studies on affordable housing policies that can address localities and communities needs, and 15 policy tools that serve as an online resource to policy makers. PolicyLink opened an office which I head in New Orleans post-katrina to lend our housing policy expertise to the state of Louisiana and to the City of New Orleans. Over the subsequent three and a half years, we have served in an advisory capacity to the LRA, the LHFA, New Orleans Office of Recovery Disaster Administration, HUD, the East Baton Rouge parish administration, the St. Tammany parish administration, the Louisiana State legislature, the Greater New Orleans Housing Alliance, the Louisiana Housing Alliance, the Greater New Orleans Foundation, the Baton Rouge Area Foundation, and the Louisiana Disaster Recovery Foundation. We have monitored all of the federal disaster housing recovery resources at the individual applicant data level and the programmatic level, and conducted two major benchmark studies on the progress of housing recovery programs. These included statewide evaluations of the Road Home homeowners program, the low income housing tax credits multifamily rental program, and the small owner rental repair program. These studies were widely cited by major media both nationally and in the state, and utilized by leaders and decision makers across local, state and federal governments. This evaluative work was supported by grants from national and local foundations, including the Gates Foundation, the Ford Foundation, the Annie E Casey Foundation, Rockefeller Foundation, the Louisiana Disaster Recovery Foundation, the Greater New Orleans Foundation, Oxfam America, and the Marguerite Casey Foundation. Additionally, I served on two Louisiana state legislative subcommittees as an expert informant on addressing unmet housing needs post Katrina and Rita. Please see attached CV for further details on my qualifications. I am being compensated at a rate of $110 per hour for my work in preparing this expert opinion. II. Key Findings The eminent end of the Disaster Housing Assistance Program and the FEMA Temporary Assistance Program will mean thousands of families will need housing affordable to households between 50 and 100 percent of AMI. There are currently 1,585 families on these programs in St. Bernard parish. The Low Income Housing Tax Credit/Piggyback Program primarily serves families in this demographic. If St. Bernard parish moved forward with all the resources allocated from federal housing recovery investments (including Provident), it would only replace 20 percent of its lost rental stock. Workers in critical St Bernard job sectors cannot afford current market rents. Twenty five percent of its residents cannot afford market rents. Population growth in both the region and St Bernard are expected to continue with St Bernard at a higher growth rate than the region projected. FEMA public assistance investments in community infrastructure is projected to invest almost $1 billion in St. Bernard parish over the next five years creating more jobs in sectors currently unable to afford market rents. Investment now in affordable rental developments will help meet the growth in need for these new workers, for current workers that are rent burdened or transitioning from temporary housing support, and for homeowners who cannot afford to rebuild. 3

4 Case 2:06-cv Page 4 of 20 While localities should balance planning with speed of provision of new homes that meet the needs of workers, displaced residents and newcomers, the severe dearth of affordable rentals in St. Bernard should dictate community acceptance and enactment of developments that can capitalize on one time, shortterm federal investment. The extreme loss of rental homes, the growth in population and projected jobs, the minimal resources allocated to affordable homes in the parish, and the housing cost burden experienced by workers in the parish assure the leasing up of any affordable units developed with current resources. III. Housing Market Conditions New Orleans Metro Area and St. Bernard Parish Overall, hurricane Katrina dramatically changed the rental housing market in New Orleans metro area. Pre- Katrina, market rate rental housing was relatively low cost and affordable to households on fixed incomes and service sector wages. Federally subsidized affordable housing created deeper affordability for households that needed more support. With the damage to or loss of almost 80,000 rental units in the metro area, the opposite is now true. According to a wide variety of sources, including the US Department of Housing and Urban Development, the Louisiana Housing Finance Agency, the Louisiana Recovery Authority and the Brookings Institute/Greater New Orleans Community Data Center, the current rental market in the New Orleans Metropolitan Area is tight and has experienced significant rent increases since Hurricane Katrina. HUD s most recent market study the situation in the MSA summed up the situation as, Conditions in the rental market in the MSA are currently tight. Strong absorption of available rental units has occurred in all parishes along with a significant increase in market rents Rents have remained high because of increased insurance premiums and overall operating costs. i Because of the losses in both the subsized rental stock and the market rental stock, the state of Louisiana channeled federal recovery resources to repair neighborhood homes at affordable rents, and to build new and repair apartment buildings that can house people at a range of incomes. It was clear that those units repaired without subsidy would have significantly increased rents. The following section outlines the housing situation in the Metro Area and St. Bernard Parish in relation to Housing lost due to the Hurricanes of 2005, Replacement Programs from the State, Temporary Housing and Projected Housing Need. Housing Lost Due to Hurricanes of 2005 Table 1: Housing Lost due to Katrina and Rita and Potential Replacement ii : Parish Damaged Homes (FEMA Estimate) Road Home Applicants Percent of Applicants Compared to Estimated Damage Damaged Rental Units (FEMA Estimate) Potential Rental Units with Funding Allocation Jefferson 20,339 30, % 13,972 2,928 21% Orleans 53,474 53, % 51,681 18,988 38% Plaquemines 3,722 3, % 1, % St. Bernard 13,736 14, % 5,936 1,201 20% St. 13,689 12,857 94% 3,931 1,156 29% Tammany Total NOLA Metro 104, , % 76,977 24,301 32% This number includes the 288 units in the Provident Developments. Percent of Rental Potentially Replaced Compared to Estimated Damage 4

5 Case 2:06-cv Page 5 of 20 There was a significant loss of rental housing in the New Orleans Metro Area with few resources to rebuild. As HUD points out in their November 2008 report, many units that were formerly unsubsidized were significantly damaged. Almost all affordable housing that will be coming on line will have a subsidy and there is little hope of the affordable housing market returning without it. When one combines the pre-katrina need, the destruction of units from the hurricanes and the replacement units, the need for affordable housing in the Metro Area is undeniable. As Robin Keegan, Deputy Director of the Louisiana Recovery Authority reported to the LRA Board on February 26 on rental conditions in the New Orleans Metro Area, there is Still a challenge and great need for affordable housing. Map 1: Homeowner and Rental Unit Recovery in the New Orleans Metro Area, Aug 2008 iii State Homeowner and Rental Recovery Programs Rental Programs The 82,000 units of rental housing lost in hurricanes Katrina and Rita are being primarily replaced by two programs: Large Rental Program, financed by Low Income Housing Tax Credits, and Community Development Block Grant (CDBG) Piggyback funds, aimed at multi-family housing developers; and the Small Rental Repair Program, aimed at neighborhood homes owned by mom and pop landlords. The majority, but not all of the homes generated by these programs are affordable; both programs gave bonuses for creating mixed income developments. The Provident developments are funded through the Low Income Housing Tax Credits and the Piggyback program. The piggyback portion of the tax credit program addresses the needs of seniors, people with low wage jobs, and people at risk of homelessness. The program provides incentives for providing deeper affordability and the 5

6 Case 2:06-cv Page 6 of 20 economic integration of different income groups into new housing developments. These funds also provided for the partial replacement of lost public housing developments. The Louisiana Housing Finance Agency (LHFA) allocated Gulf Opportunity Zone (GO Zone) tax credits in 2006, and some developers since then have been unable to secure the remaining financing to make their projects viable due to the national downturn in the economy. Financing challenges for these developments in southern Louisiana are primarily due to lowered national demand for tax credits in a down economy and the resultant devaluation of tax credits from $1.05 to $0.63 iv, due to far fewer investors with tax liability. Other concerns for investors in southern Louisiana include the increased risk of investing in a recovery area with more unknowns, a federal deadline to have units ready to be occupied by 2010, local opposition to multifamily/rental developments, and increased insurance costs. Rental housing stock in the New Orleans Metro Region prior to Katrina was made up primarily of units in smaller buildings; nearly 70 percent in New Orleans were in buildings with four units or less. The Small Rental Repair Program was designed to give a forgivable loan to the owners of these small rental houses in thirteen of the most heavily damaged parishes (including St. Bernard) to rehab their units in exchange for providing much needed affordable rental units. Since New Orleans carried the vast number of damaged rental units, the majority of the funding was allocated there to restore units. The Small Rental program also aims to reduce blight in heavily damaged neighborhoods, where rental units in traditional housing stock existed side-by-side with those occupied by homeowners. While the goals of the program are laudable, the program has hit innumerable roadblocks. Unlike the upfront grants of the homeowners program, federal rules steered the state toward a complex program that reimbursed landlords after repairs were finished and a tenant was in place. This required landlords to get private financing for their repairs, which has become increasingly difficult as the national credit market tightened and landlords continued to carry mortgages on properties without any rental income. The program suffered from a complex application process and a series of rule changes for eligibility. This programmatic confusion was exacerbated by applicants being unable to access their files and or receive the technical assistance they needed to complete program requirements. Applicants also experienced many problems similar to Road Home applicants in accessing their files and repeatedly having to verify their documentation. The state has made many improvements in this arena, and is now holding regular sessions to work with landlords, but the number of applicants who were lost in the system are unquantifiable. The state is also working on getting funds to landlords up front to help speed the repair of these 1-4 unit buildings. Between the Large and Small rental programs statewide, current allocations in both the will only replace 2 of every 5 affordable units lost, while only 1 in 3 affordable rentals in the New Orleans area will be replaced. Parishes particularly far behind in replacement of rental units in the metro region are St. Bernard, Jefferson, and Plaquemines v. Homeowners Program - The Road Home Program The Road Home Homeowner Assistance program provides grants for the uninsured losses of homeowners to repair their homes or relocate. FEMA estimated that about 330,000 homeowners suffered from minor to complete damage of their homes across the storm affected areas in Louisiana. Road Home officials expect more than 150,000 homeowners will receive grants from the program with nearly three-fourths of those paid out as of early August Families that had sufficient insurance (flood, wind, and homeowners), and those that could rely on their own assets, generally moved into repair mode in the first year after the storm. Repopulation maps of damaged areas show a correlation between higher incomes and faster re-occupancy. (See Those that depended solely on the Road Home program generally have moved more slowly due to insufficient funds and the pace of the program. Significant challenges remain for those who have received their grants and 6

7 Case 2:06-cv Page 7 of 20 those who have yet to close. Nonprofit groups working with homeowners report that many recipients face insufficient rebuilding grants, contractor fraud, a high-cost environment, inability to access additional credit, and home-title succession challenges that delay or deny funding for the home repair. A PolicyLink report found that the majority of homeowners choosing to rebuild in place did not have sufficient resources to fully recover their homes. This was particularly true in St. Bernard Parish, which had the highest gaps between the average damage estimates and the grants given to homeowners to rebuild (See Chart 1). Many of these homeowners are unable to fully rebuild their homes and may need alternate, affordable, rental housing options while they are rebuilding. Chart 1: Road Home Resources for Select Heavily Damaged Parishes Orleans St. Bernard Cameron Calcasieu Vermilion Terrebone $- $50,000 $100,000 $150,000 $200,000 Avg Pre-storm Value Avg. Damage Estimate Avg. Estimated Gap Temporary Housing Table 2: Temporary Housing As of February 2009 DHAP vi Deadline: 9/1/09 Temporary Housing Units (THU) owners Deadline: 5/1/09 THU Renters Deadline: 5/1/09 THU- Total vii Deadline: 5/1/09 TSA (Hotels) Deadline: 5/1/09 Total Vacant Units at 85% of FMR or below Total Vacant Units viii St Bernard 1, , NOLA Metro 14,184 2, , , ,568 THU refer to FEMA trailers As Table 2 shows, there are over 14,000 families on the Disaster Housing Assistance Program (DHAP) in the New Orleans Metro Region (which helps a family pay market rate rent with a temporary voucher) with another 3,000 in other forms of temporary housing (travel trailers for homeowners still unable to reoccupy homes, and hotels for those moved from trailer parks and unable to find accessible homes). Together with residents displaced nationally, 31,000 households still rely on these temporary programs because sufficient replacement housing has not been developed. Due to expire at the end of February, 2009, DHAP was recently extended to expire on September 1, In issuing this extension, the new HUD administration announced that families in this program that are elderly, disabled or make under 50% AMI will receive a permanent housing choice voucher that they can continue to use in their current unit (if the landlord agrees to accept the voucher) or they can move to another unit if they can find one. HUD estimates that approximately half of these DHAP families (~7500) will not qualify for these permanent vouchers, that ~ 3,000 of these families (classified low risk ) will be able to afford their rent or move back into their homes, and that at least 4,000 remaining families those in the 50-80% of area median income will likely experience difficulty finding affordable housing when DHAP ends. The nearly 2,900 families in other 7

8 Case 2:06-cv Page 8 of 20 forms of temporary housing (trailers and hotels) will be in need of affordable housing much sooner as these programs end the first of May. Most of these families are homeowners trying to rehab their homes, but have either do not have the resources to do so, are waiting on resources, or are victims of contractor fraud. These families may need to find other affordable rental housing until they are able to move back into their homes. The DHAP assessment of vacant units in St. Bernard was fewer than 10, and in phone canvassing by PolicyLink of major realtors working in the parish found few rental units available. ix Affordable Housing Need Projections: The Louisiana Housing Finance Agency commissioned demographers GCR in early 2009 to conduct an assessment of the rental housing need based on current demand plus household growth (not replacement of damaged units). LHFA Board and Management wanted to see what the demand would look like focused on the people currently living here and population growth, similar to a market demand analysis that developers would submit for funding. They found a limited demand for affordable rental units in St. Bernard currently, but a substantial increase in rental demand over the next five-year period based on growth rates of the parish. This data factors in major units in the pipeline through the Low Income Housing Tax Credit program, Small Rental Program, and HANO redevelopment. The Metro Area was determined to need almost 45,000 units of rental housing for families below 80% of AMI, with the vast majority of these units needed for families making under 50% AMI. Table 3: Estimates of Affordable Housing Demand for All Renter-Occupied Households x Current Demand Demand Units in Pipeline Unmet Demand New Orleans MSA 28,200 17,871 26,259 18,865 St. Bernard 132 1,501 1, IV. Qualified Allocation Plan (QAP)and Piggyback Program Point Scoring The Provident developments are funded by the Lightning Round xi of Gulf Opportunity Zone (GO-Zone) Qualified Allocation Plan (QAP) for Low Income Housing Tax Credits xii and Round Two of the Office of Community Development s Piggyback Program xiii. Both programs prioritized developments in St. Bernard parish due to the high need and heavy destruction of rental units in St. Bernard. At least 75% of the credits awarded in the QAP were targeted for parishes with significant numbers of rental housing units damaged by hurricanes Katrina and Rita. There were only eight Parishes out of the entire 31 GO-Zone Parishes that were eligible, including St. Bernard. xiv Round Two of the Piggyback Program set aside $16million of the $80 million (twenty percent) for St. Bernard and Plaquemines Parishes because no Piggyback awards had been made at that point (August 2008) to these parishes that has undergone significant damage to their rental housing stock. Out of the 50 available points available to a developer for parish selection, both St. Bernard and Plaquemines were the only two out of the eight eligible parishes to receive 50 points. xv The Bureau of Governmental Research (BGR), a research group in New Orleans, noted after the first 3 rounds of tax credit allocations did not award any developments to St. Bernard that the state should distribute tax credits in proportion to the percentage of statewide major and severe rental housing damage. In that case, St. Bernard should have received 7% of the tax credits. xvi Of the $198,960,853 in tax credit awarded by the state, St. Bernard received only 1.6%, $3,239,130. xvii BGR also noted that although 7% of the tax credits would mean an increase in subsidized households for St. Bernard Parish that the number of households would remain small. xviii Another component of the QAP ranking of development proposals was the development s proximity to services and its mixing of income levels both considered best practices nationally, and valued attributes to serve a range 8

9 Case 2:06-cv Page 9 of 20 of households and locate them near key human services--improving both quality of life, affordability, and environmental impacts. The Provident development meets both criteria, mixing income, and being located within a mile of a bus stop, pharmacy, bank, fire department, food store, park and high school. A key provision of the tax credit/piggyback developments is that they must provide 5 percent of their units with disability access, and all must be ADA compliant. With a 20 percent disability population in Louisiana, these new homes will provide key accessibility not available in single family or doubles most represented across St. Bernard parish. V. For Sale and Rental St. Bernard Housing Market Conditions St. Bernard has generally been an affordable place to live in the Metro Region. One of the concerns voiced in the St. Bernard Parish Planning portion of the Louisiana Speaks Long Term Plans was how to ensure this same level of affordability post-disaster. xix The Louisiana Speaks Planning Process has a parish planning component that is the long term planning initiative for South Louisiana that determined the recovery vision, needs, goals and potential recovery projects as defined by local stakeholders and residents. St. Bernard Parish government is a partner in this planning process and approved the parish plans. xx Post-Katrina Homeowner Trends St. Bernard is bucking the Metro Region trend in sales and increase in average price for homes. According to HUD s Market Report from March 2008, residential sales were down in all parishes except St. Bernard, showing an increase in interest in the parish and a return of the population. During the 12-month period ending February 2008, the number of sales in St. Bernard Parish totaled 340 compared with 240 sales during the 12-month period ending February Due to this demand, sales prices are also increasing, in the same time period, the average price of $84,700 was up 63 percent compared with the previous year. xxi Additionally, new home construction has increased, presumably to help meet the demand of residents returning. The production is up 25 percent, 200 homes in the 12-month period ending February xxii These increases in sales, average prices and number of new home construction all point to increased in demand in St. Bernard Parish. Post-Katrina Rental Trends HUD annually surveys rents and establishes Fair Market Rents. The following table compared fair market rents with rents that would be provided for residents in development like Provident. Table 4: Current Rental Market in St. Bernard Parish Number of Bedrooms Fair Market Rent xxiii Tax Credit Rents 30% AMI xxiv Tax Credit Rents 50% AMI xxv Tax Credit Rents 60% AMI 1 $881 $224 $560 $672 2 $1030 $403 $672 $807 3 $1323 $466 $777 $933 Louisiana Land Trust (LLT) Properties In the Road Home Program, property owners were permitted to sell their properties back to the state into a trust called the Louisiana Land Trust. State wide about 9% of applicants so far have chosen this option. In St. Bernard, about 38% of applicants have chosen to sell their property back to the state. xxvi The LLT worked with localities on a disposition plan for the properties located in each parish. In St. Bernard there are 4,038 lots in the Louisiana Land Trust. The first priority in the disposition plan is giving land to local government agencies for water infrastructure needs. The second use is the Lot Next Door program which allows homeowner to purchase the property but prohibits them from building a house on the land, effectively reducing the density and number of potential housing units in the parish. Currently over 2,000 homeowners have applied for the Lot Next Door program, meaning that at 9

10 Case 2:06-cv Page 10 of 20 least half of the lots in the program could potentially go towards this use, leaving approximately 2000 remaining lots for other purposes. There are a series of community priorities for the land, with the final use for building affordable housing. Given the low priority of affordable housing as a use for the land, it is unlikely much affordable housing will be produced from these properties. xxvii Each parish must develop a disposition plan for LLT properties to be transferred to parish control. The LLT Disposition plan for St. Bernard, expresses serious concern that workers making less than 100% of AMI cannot afford ownership housing in the parish: Households earning less than the metro median household income ($52,500) often must work very long work weeks, have minimal savings and were often under insured prior to Katrina. They are most in need of housing to be created for them by others at a costs affordable with their incomes. Twenty five percent of the LLT parcels shall be identified and set aside for redevelopment as either renovation of existing housing or new construction for use as affordable housing for those earning 100% or less of the metropolitan area median household income. Vacant lot values are likely to be modest based on preliminary analyses of 90 vacant lot sales and 46 gutted house sales by Dr. Wade Ragas. However, inexpensive land will not alone be enough of a subsidy to make housing affordable to those earning between 70% and 100% of AMI. Significant additional subsidies to create affordable housing financing structures will be necessary. There are very few other significant subsidies available for this owner occupant population. This affordability gap is devastating to St. Bernard because these are the salaries of first responders, teachers, social workers, and other crucial community stakeholders. According to the U.S. Census in 2005, before Katrina the median household income in St. Bernard was below $37,000 or at 70% of adjusted median household income. Without a soft second program funded to achieve owner occupant affordability for those earning 70% to 90% of AMI it will not be possible to construct and occupy 25% of LLT stock as affordable housing. xxviii These families may need to rely on subsidized rental housing to continue to provide essential services to the parish. VI. Population Trends St. Bernard and Metro Region Although St. Bernard Parish sustained significant damage to almost all of its housing and the displacement of nearly of her people, families are returning. It s too early to say how many more families will return, but strong family and community ties continue to draw back families. The parish currently has almost half of its households receiving mail. Compared to the 12% drop in households metro region since July 2005, in December of 2008 St. Bernard has lost half of its households. But in the six months prior from July December of 2008, St. Bernard s households increased 15% compared to only a 1% increase in the Metro Region. Table 5: Households Receiving Mail for St. Bernard Parish and the Metro Region xxix July 2005 August 2006 July 2007 July 2008 Dec 2008 New Orleans Metro Region 532, , , , ,605 St. Bernard Parish 25,604 no data 9,350 10,866 12,470 There is a continued potential for further population return to the region Road Home grants are 90 percent processed; the Obama Administration is helping move Public Assistance grants which will catalyze the replacement of public services; the disaster housing programs that are housing people outside the region will be ending in the next six months. And another potential factor for an increasing population going forward is the national economy. The New Orleans Metro Area saw a drop in unemployment claims from July to December of 2008, while these numbers soared nationally xxx. Families that may have located elsewhere for jobs after Katrina may begin to return to the region as layoffs and foreclosures plague their new neighborhoods across the country. 10

11 Case 2:06-cv Page 11 of 20 VII. Labor Market Trends St. Bernard and Metro Region Employment is down across the Metro Region and St. Bernard compared to Pre-Katrina numbers. But employment continues to grow in the Metro Region since the storms of According to data from the US Bureau of Labor Statistics, in the second six months of 2008, the Metro Region gained 1.12% jobs while the national job market moved in the opposite direction sinking by 1.24%. As of the second quarter of 2008, there were significant job vacancies (jobs that are available) across the region. Many of these are in office and administrative support, sales, maintenance and repair, food services, material moving and construction. Chart 2: Job Vacancies in New Orleans RLMA1 by select occupation, Q In St. Bernard Parish, the largest concentrations of workers are in sale and office occupations, followed by construction, material moving and service occupations many of the same occupations with high job availability in the metro region. xxxi Although businesses are struggling to reopen in St. Bernard Parish (as of March 2006 only % had reopened) more than 500 businesses have notified the parish that they would like to reopen in the parish. xxxii Additionally the St. Bernard Port, Harbor and Terminal District is the only Mississippi river port with an Industrial Park and deep water port. Prior to the hurricanes over 50 businesses operated employing over 1,000 workers. The port is rebuilding and nearly 95% of all port tenants want to return. xxxiii Also, over the next two years, a 40-bed hospital will be opening in the parish, creating another segment of jobs and need for workers in the parish. Additionally, St Bernard parish has applied for 1,587 Public Assistance projects public buildings that qualify for FEMA funds to address replacement and repair. To date, 1,515 are obligated (95.46%) and in the pipeline xxxiv. These projects will draw down $988,996,057 of federal funds, and generate the need for workers and services during construction phases, and for staffing of facilities. They include 244 education facilities, 122 public works facilities, 23 historic and cultural facilities, and 59 public safety and criminal justice facilities. Additionally, the St. Bernard Towne Center Development, funded by New Market Tax Credits, will contain a Community Health Facility and Head Start Center along with commercial and residential uses. xxxv 11

12 Case 2:06-cv Page 12 of 20 Map 2: Public Assistance Projects in St. Bernard Parish The sheer breath of these projects promises significant job and repopulation potential for the parish. The state of Louisiana recently published job forecasting numbers that predict the metro region will grow 109,430 jobs over the next 10 years. Many of these positions are in education, services, medical services (personal home care aides, registered nurses) and retail xxxvi and will certainly employ St. Bernard residents. All in all, the parish and the metro region will be adding significant jobs and these employees will need places to live. Many of these positions, particularly service, retail and educational jobs are currently unable to affordable market rate rents in the parish. Over 25% of workers in St. Bernard Parish cannot afford a two-bedroom apartment at current market prices. Workers that keep the parish running such as hotel and food services, retail, education and other service workers are unable to afford rental units in the parish. xxxvii If affordable housing is not provided to house these workers, many essential positions may go unfilled. 12

13 Case 2:06-cv Page 13 of 20 Chart 3: Cost of St. Bernard Housing Compared to 30 Percent of Monthly Earnings for Industries Employing over 100 persons xxxviii Chart 3 shows that the workers from critical sectors the third largest industry sector in St Bernard (retail trade), the forth largest sector (hotel and food services), the fifth largest (public administration), the seventh largest sector (educational services), the eighth largest (health care) cannot afford current market rents, but fall within rent projections of recovery rental developments such as Provident. VIII. Key Conclusions The eminent end of the Disaster Housing Assistance Program and the FEMA Temporary Assistance Program will mean thousands of families will need housing affordable to households between 50 and 100 percent of AMI. There are currently 1,585 families on these programs in St. Bernard parish. The Low Income Housing Tax Credit/Piggyback Program primarily serves families in this demographic. If St. Bernard parish moved forward with all the resources allocated from federal housing recovery investments (including Provident), it would only replace 20 percent of its lost rental stock. Workers in critical St Bernard job sectors cannot afford current market rents. Twenty five percent of its residents cannot afford market rents. Population growth in both the region and St Bernard are expected to continue with St Bernard at a higher growth rate than the region projected. FEMA public assistance investments in community infrastructure is projected to invest almost $1 billion in St. Bernard parish over the next five years creating more jobs in sectors currently unable to afford market rents. Investment now in affordable rental developments will help meet the growth in need for these new workers, for current workers that are rent burdened or transitioning from temporary housing support, and for homeowners who cannot afford to rebuild. While localities should balance planning with speed of provision of new homes that meet the needs of workers, displaced residents and newcomers, the severe dearth of affordable rentals in St. Bernard should 13

14 Case 2:06-cv Page 14 of 20 dictate community acceptance and enactment of developments that can capitalize on one time, shortterm federal investment. The extreme loss of rental homes, the growth in population and projected jobs, the minimal resources allocated to affordable homes in the parish, and the housing cost burden experienced by workers in the parish asssure the leasing up of any affordable units developed with current resources. 14

15 Case 2:06-cv Page 15 of 20 Professional Employment Kalima Rose 1515 Poydras, # 106, New Orleans LA 70112, krose@policylink.org 1999-present Senior Director, Affordable Housing and Equitable Development, Louisiana Recovery Initiative, PolicyLink, New Orleans, LA and Oakland, CA Lead PolicyLink Louisiana Recovery initiative, working with federal, state, local elected officialss, community based nonprofit leaders, banking and development community to ensure equitable redevelopment of New Orleans post-katrina; provide monitoring of $9B housing recovery program; Direct PolicyLink Housing and Equitable Development program, lead PolicyLink s partnerships in local, state, regional housing policy campaigns nationally; Develop web-based Equitable Development Toolkit with in-depth policy tools for community based organizations and public officials; advance GIS mapping for housing policy support; build capacity of local partners to do successful housing needs assessment, policy advocacy, and effective program implementation; Direct research team on specific legislative initiatives, particularly related to equitable development housing policy (inclusionary zoning, Housing Trust Funds, allocation of federal and state resources, etc). Direct $1-$2m annual budget for affordable housing research, advocacy, monitoring, capacity building, & community organizing Program Director, Tides Foundation, San Francisco, CA Managed community development and environmental grantmaking programs of $10 million annually, provided technical assistance, organizational development support, and assessment services to organizations that Tides supported through grantmaking. Managed program staff and led philanthropic initiatives on living wages, indigenous communities, racial justice, women s rights, and environmental justice Senior Program Officer, Economic Development Program, Ms. Foundation for Women, Berkeley CA/New York, NY Directed $2million grants program to organizations working on community economic development and economic justice. Provided training and technical assistance directly to organizations experiencing significant community job loss, and through annual Women and Economic Development Institute. Organized and led delegation of 100 U.S. women leaders to participate in U.N. World Conference on Women. Edited quarterly publication, Equal Means, on economic issues affecting women. Circulation of 10,000, distributed to community-based organizations, labor unions, faith organizations, libraries, colleges and universities. Covered economic issues, political organizing, organizational development, policy strategies Researcher/Writer, Self Employed Women s Association, India Researcher and authored Where Women Are Leaders: The SEWA Movement in India a 20 year action history of India s largest women s economic development organization (250,000 members), as a tool for women s development organizations around the world. Published by SAGE Publications (New Delhi) and Zed Press (London) Legislative Editor, Policy Report on Protective Legislation for Women in the Informal Sector to the Indian Parliament, National Commission on Women s Labor, New Delhi, India 15

16 Case 2:06-cv Page 16 of 20 Worked with Ela Bhatt, Member of Parliament and Chair of the Royal Commission on the Conditions of Women in the Informal Sector to organize two years of national testimony and research on women s labor realities into a 250-page report with legislative recommendations Freelance Journalist, Worldwide Wrote on cultural, economic, environmental, and women s issues for the Los Angeles Times, Denver Post, the India Economic Times, the Statesman, the Population Council, the Ford Foundation, the U.N Writer, Poetry Flash, Berkeley, CA Reviewed poetry books, wrote poet profiles, interviews, cultural histories of social justice-oriented poets of civil rights movement US Forest Service Wilderness Ranger, Fire Fighter Seasonal employment as wildfire fighter in High Sierras of California Served as Wilderness Ranger five summers in eastern Sierras and southern Rocky Mtns of Colorado building trails, monitoring stock/grazing use, recreation use, reveling in universe! Education B.A. Narratives and Culture, U.C. Berkeley, Regent Scholar, with honors. Publications -The Role of Housing Trust Funds in Creating Housing Opportunity in America, Housing California and PolicyLink, forthcoming March Expanding Housing Opportunity in Providence: Making the Case for Inclusionary Zoning. PolicyLink, forthcoming April A Long Way Home: The State of Housing Recovery in Louisiana 2008, PolicyLink report, August 2008, -Delivering Equitable Development to a Recovering Louisiana: A State Policy Guide for 2008 and Beyond, PolicyLink, January Struggling in the Crescent City Shelterforce, National Housing Institute, October, Bringing Louisiana Renters Home: An Evaluation of the Gulf Opportunity Zone Rental Housing Restoration Program, A PolicyLInk report. August Issue Brief: Building a Better New Orleans, Hope Needs Help, PolicyLink, August, Investing in Equitable Recovery: Philanthropy Confronts the Historic Neglect of the Gulf Coast, A PolicyLink Report. - Ensuring Broad Access to Affordable Neighborhoods that Connect to Opportunity, The Covenant with Black America, Third World Press, Chicago, A National Housing Policy Agenda: Focus on States and Localities, Progressive Planning, July Expanding Opportunity: New Resources to Meet California s Housing Needs, PolicyLink Report, January Combatting Gentrification through Equitable Development, Chapter by Kalima Rose in African Americans in the United States Economy, edited by Cecilia Conrad, John Whitehead, Patrick Mason, and James Stewart, and to be published by Rowman & Littlefield Publishers, Inc., Increasing Housing Opportunity in New York City: The Case for Inclusionary Zoning, PolicyLink and Pratt Institute Report, Fall Expanding Housing Opportunity in Washington, DC: The Case for Inclusionary Zoning, PolicyLink Report, Fall Combatting Gentrification through Equitable Development, Race, Poverty and the Environment, October Beyond Gentrification: Tools for Equitable Development, Shelterforce, May/June Achieving Equity through Smart Growth: Perspectives from Philanthropy, Funders Network for Smart Growth and Livable Communities, February Community Involvement in the Federal Healthy Start Program, PolicyLink Report, June

17 Case 2:06-cv Page 17 of 20 - Women Confront the Global Economy at UN World Conference, ColorLines, October Equal Means: Women Organizing Economic Solutions, editor, Ms. Foundation for Women, quarterly journal, published Where Women Are Leaders: the SEWA Movement in India, Zed Press, London, and SAGE Publications, New Delhi, Community Service -Board Director, Housing California, serve as Chair of Research Committee, 2008-present -Committee member, Louisiana Legislature Joint Municipal Subcommittee, SCR 118 on Addressing Unmet Disaster Housing Needs, 2008-present. Committee member, Louisiana Legislative Subcommittee on Inclusionary Housing, First Peoples Fund, Board Director, Rapid City, SD present -Louisiana Housing Alliance, Policy Committee, 2006-present -Communications Arts and Sciences High School, Board member, Berkeley Unified School District Advisory Committee on School Finance, Berkeley Unified School District Superintendent s Advisory Committee on High School Reform, Berkeley Unified School District Healthy Start Initiative, Board Chair, Just Economics, Board member References i U.S. Department of Housing and Urban Development, Office of Policy Development and Research. Comprehensive Housing Market Analysis, New Orleans-Metairie-Kenner, Louisiana. March 1, ii PolicyLink, A Long Way Home. Aug Louisiana Housing Finance Agency, Housing Pipeline Report. Jan LRA, Small Rental Pipeline Report. Dec iii U.S. HUD. Current Housing Unit Damage Estimates Hurricanes Katrina, Rita, and Wilma. February 12, Revised April 7, Analysis by the U.S. Department of Housing and Urban Development s Office of Policy Development and Research. Road Home Applicants only include applicants deemed eligible as of June 26, Rental units with funding allocations includes units from the Gulf Opportunity Zone Low Income Tax Credit Program and Small Rental Repair Programs. Rental units built or underway includes tax credit developments that are placed in service, are under construction or have closed their financing as of July 17, Also includes Small Rental Repair Units that are in the construction stage, are in pre-closing or have closed as of June 18, iv s with Christine Robertson, Louisiana Program Director, Local Initiative Support Corporation, December 22, v PolicyLink, A Long Way Home: The State of Housing Recovery in Louisiana, 2008, Report, August, 2008, based on LRA data. vi US Department of Housing and Urban Development, Disaster Housing Assistance Program Report Provided to Louisiana Recovery Authority, January vii Federal Emergency Management Agency, Active Leases Report Provided to Louisiana Recovery Authority, Feb 9, viii Federal Emergency Management Agency, Rental Resources by Parish Report Provided to Louisiana Recovery Authority, Feb 17, ix Phone canvassing conducted between Feb of major realtors (Latter and Blum, Prudential Gardener, Remax, and listings found on craigslist.com and nola.com. x GCR, LHFA Summary: Louisiana Housing Needs Assessment, January 2009, and exchange with Rebecca Rothenberg, GCR housing analyst, March 5-6, xi xii The Gulf Opportunity Zone Act of 2005 (HR 4440 passed by Congress on Dec. 16, 2005, and signed by President Bush on Dec. 21, 2005) establishes tax incentives and bond provisions to rebuild the local and regional economies devastated by hurricanes Katrina and Rita. The act is commonly referred to as the GO Zone Act. The act awarded $170 million in Low Income Housing Tax Credits (extended over 10 years to total $1.7 billion) to fund rehab or new 17

18 Case 2:06-cv Page 18 of 20 construction of affordable rental housing in Louisiana. Housing finance agencies such as the LHFA require a Qualified Allocation Plan from developers who wish to be considered for LIHTC allocations. The QAP includes a scoring mechanism that allows the housing finance agency to rank development projects and allocate funding accordingly. xiii The Piggyback Program is funded by Community Development Block Grant dollars to finance the development of additional workforce rental housing in the GO Zone. The piggyback funds are combined with LIHTC tax credits. xiv Louisiana Housing Finance Agency, Low-Income Housing Tax Credit Program Calendar Years 2007 and 2008 Gulf Opportunity Amount Credits, Accessed Feb 20, xv xvi Bureau of Governmental Research. Cementing the Imbalance. August, xvii Louisiana Housing Finance Agency, Housing Pipeline Report, 9% Low Income Housing Tax Credit Pipeline. Feb 17, xviii Bureau of Governmental Research. Cementing the Imbalance. August, xix A critical issue related to housing recovery is how to maintain the level of affordability that existed prior to the disaster. Housing costs were modest before the disaster and there will be numerous challenges to building an affordable selection of housing options for residents, and extensive subsidies may be necessary The damages to St. Bernard Parish s housing stock were widespread and comprehensive, impacting virtually every available structure and leaving the parish uninhabitable. As a result, Hurricane Katrina s impacts on housing will be felt for years to come by the citizens of St. Bernard Parish. Louisiana Speaks. Louisiana Plans, Long Term Community Recovery Planning: St. Bernard Parish Accessed Feb 20, xx xxi U.S. Department of Housing and Urban Development, Office of Policy Development and Research. Comprehensive Housing Market Analysis, New Orleans-Metairie-Kenner, Louisiana. March 1, xxii U.S. Department of Housing and Urban Development, Office of Policy Development and Research. Comprehensive Housing Market Analysis, New Orleans-Metairie-Kenner, Louisiana. March 1, xxiii GNOCDC, The New Orleans Index, January Accessed Feb 20, xxiv Novogradac & Company. A Market Feasibility Study of Parc Place Apartments. June xxv Louisiana Housing Finance Agency, Tax Credit Income Limits, _tc_%20income_%20limits_14feb08.pdf Accessed Feb 20, xxvi xxvii xxviii St. Bernard Parish, Parish Redevelopment and Disposition Plan for Louisiana Land Trust Properties, March xxix GNOCDC, The New Orleans Index, January xxx GNOCDC, The New Orleans Index, January xxxi Louisiana Speaks. Louisiana Plans, Long Term Community Recovery Planning: St. Bernard Parish Accessed Feb 20, xxxii Louisiana Speaks. Louisiana Plans, Long Term Community Recovery Planning: St. Bernard Parish Accessed Feb 20, xxxiii Louisiana Speaks. Louisiana Plans, Long Term Community Recovery Planning: St. Bernard Parish Accessed Feb 20,