Inclusionary Zoning Archives : Wade Rathke: Chief Organizer Blog

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.

Inclusionary Zoning Lite and Little

New Orleans Catching up on back papers I found both the interesting and the disappointing.

Let’s start by keeping it positive and look at something called RentCheck, which is an application designed for tenants, but gaining some support by landlords, finding it useful enough that they have downloaded it in 40 US states and seven different countries. RentCheck charges renters $20 per lease and landlords $5 per month to manage properties using the app. The app “…allows renters and landlords to complete a standardized rental inspection with smartphones. Users can track the condition of a property using time-stamped photos and get access to inspection records at any time.” This stops the problem of landlords showing up unexpectedly and of tenants having to prove the conditions of the apartment are the same as when they rented so that they are able to recover their security deposits. If it works, it seems like a win.

On the other hand, we fight for inclusionary zoning everywhere in the world when it means the development of more units of affordable housing, so it seemed like good news seeing a headline that the New Orleans City Council had finally adopted a plan for such zoning in the city, especially since real estate and business interests had tried to get the state to prevent them, forcing a veto from the governor. The plan seemed pretty complicated though. It’s not a citywide requirement for developers, but instead is based on maps – that have not been generated yet – that will focus less on areas plagued by dislocation or gentrification, and instead on areas close to public transit and job centers. Are developers even interested in those areas? How does this not ghettoize affordable housing rather than beating back gentrifiers?

According to one of the local papers,

“The policy requires a developer building five units or more to make 10 percent of rental units affordable to anyone who earns 60 percent of the area median income, or about $30,000 for a two-person household. The requirement also applies to homeownership, but the area median income in that case is higher, set at 80 percent, or about $42,000.”

The CEO of the Home Building Association is screaming like a stuck pig that this plan isn’t “workable,” is “anti-business,” and will push developers into surrounding parishes without any restrictions. Meanwhile to put some sweeteners in the pot for the developers, the city is willing to allow more density, reduce parking requirements if close to a bus stop, and shrink the size of a lot size.

All of which is so much hooey, and this is the punch in the gut to dash any hopes that inclusionary zoning lite or whatever was just passed will really increase affordable housing in New Orleans:

“Consultants told city officials to temper their expectations. If New Orleans had enacted such a policy five years ago…just 126 affordable units would’ve been created based on projects built since then.”

All of which makes this a drop in the bucket compared to the oceanic problem of affordable housing in New Orleans or any other city thinking about inclusionary zoning. Why would politicians take the heat and lose the campaign contributions for something that only yields 25 new affordable units per year? Why pretend to deal with the issue, rather than meeting it head on?

Very disappointing!