Inclusionary Zoning Short-Term Rental Nightmare in New Orleans

New Orleans     Let’s be clear:  inclusionary zoning is a good thing!  The problem is a bit like fake news though.  What is real inclusionary zoning versus something that just claims to be creating affordable housing, while doing very little past the claim?  This nightmare is unfolding in different versions repeatedly in New Orleans offering warnings and lessons for policy makers around the country.

One problem turns out to be the consultants.  If you hire consultants that have worked for AirBnb to front for the benefits of short-term rentals, you are going to have problems coming up with good regulations.  Or, if you hire consultants for inclusionary zoning that have done namby-pamby studies for other cities, don’t be surprised if you get a lame-ass ordinance which allows a city council to claim they have a policy, while enacting one that does virtually nothing.  All of this is happening in New Orleans

The inclusionary zoning proposal passed in recent months was Swiss cheese.  The number of loopholes was a developer’s dream of inclusionary zoning estimated to yield – are you sitting down – a whole 57 units of affordable housing from new developments per year.

Now the city and so-called consultants are debating how to manage short-rentals in commercial developments rather than residential homes, and it’s shaping up to be not simply contentious, but another policy disaster.  The city council’s initial proposal, according to the Times-Picayune New Orleans Advocate, “would have limited commercial short-term rentals to 25% of any property and would have required owners to provide one unit of affordable housing for every unit that is used as a short-rental.”  That’s not a bad place to start, since a commercial location’s short-term rentals are basically hotels with another name located in neighborhoods.

In the next block from our house a former hot dog factory has been converted into a condo-complex called the Saxony for specious reasons that insult some of the German worker families that once lived in the Bywater.  Currently, 67 of 75 available units are allowed for short-term rental!  Yes, 67 of 75, because the current regulation allows short-term rentals in commercial properties without restrictions.  That’s normally called a hotel with a couple of penthouse condos.  In this nightmare, we could say that any new regulation that limited them by any means would be something of a dawn.

The consultant is recommending that instead for the council’s proposal that they should collect higher fees on the short-term rentals in commercial properties, claiming that would create more affordable housing than the one-to-one ratio.  What refried baloney is that?!?  The city is in no position to develop affordable housing itself, so they would be paying or subsidizing a developer to do so, as opposed to requiring the developer to have to create affordable housing from the “get go” if they want to have short-term rentals.

A lesson that hopefully New Orleans – and other cities – will learn in this short-term rental versus affordable housing developer and consultant scam is simple:  fool me once, it’s on you, fool me twice, it’s on me.  New Orleans needs to not be fooled yet again by developers and their huckster allies.


Policy Discussions in the Weeds

St. Etienne     You have to be careful what you ask for, even in meetings of organizers from ACORN affiliates all around the world.  One of the requests from the meeting last year near Somerset, England, was that some of the discussions give some greater sense of strategy around policy in addition to actions and skills.  Our French affiliate, the Alliance Citoyenne, was especially interested in such a discussion around housing.

We aimed to please.  The discussion started with a detailed power point from ACORN Canada about the various aspects of the affordable housing campaigns they had fought in Ontario in recent years.  Judy Duncan, the head organizer, zeroed in on the importance of defining affordability in their negotiations on inclusionary zoning between determinations based on a percentage of average market rent versus a percentage of tenants’ income.  Even figures that look favorable, as we have found in London and elsewhere, of 80% of average market rent end up pricing out low-and-moderate income families when gentrification encroaches and rents skyrocket.  The breakdown of ACORN Canada’s work in Toronto on affordability that looked at the impact on various income levels from welfare and disability payments up to family income near 80,000 as a percentage of income and the percentage of rent payments from more than 50% of total income down to the policy goal of 30% underlined the point.  ACORN’s work there focused on inclusionary zoning parceling out percentages that set aside affordable units within these income groups and was clearly articulated in the plenary.

Contributions from Scotland’s fight on rent-pressure zones and how our Living Rent affiliate had managed to migrate their campaign in Parliament from initial concerns around security of tenure or lease terms and affordability and progress on a form of rent control, added fuel to the fire.  Comments from our German associates on the complexities of affordability there were useful as well as their explanations of the new tactics being tried in Berlin to define housing as a public good allowing seizure of affordable units from developers.

There was discussion of the financialization of the housing market with the growth of REITs and private equity’s invasion of the housing markets in Canada over the last twenty years and in the United States especially since the 2007-8 recession.  Judy showed a slide on the number of housing units controlled by REITS now in Canada, including some like Timbercreek, the target of our campaign in Ottawa.  The French went through their efforts around “democratization” of public housing to prevent privatization and gain some voice in governance and transparency.

We discussed the prospects for a Section 3 campaign for public housing tenants in the United States for jobs and training and whether there might be a way to move on similar issues in social housing in the UK, Canada, and France.  The ACORN Home Savers Campaign and contract purchases made an appearance in the discussion.

We were “in the weeds” on policy.  In the evaluation at the end of the day, some of head organizers were arguing that the skills workshops were the most engaging for their staffs.  As I said, you have to be careful what you ask for!