MARKET FOCUS Supply-Demand Gap Widens In Big Easy The public and private sectors aim to deliver more affordable housing units in New Orleans, but a combination of factors hampers their efforts. John Nelson P erhaps more than most any market in the Southeastern United States, New Or-leans is feeling the full brunt of the CO-VID-19 pandemic as the city’s economic base is centered around tourism and hospitality, indus-tries that were devastated by the lack of leisure travel for the past 15 months. The New Orleans-Metairie-Kenner unemployment rate stood at 8.7 percent in April, down dramatically from 16.6 percent a year earlier but still above the na-tional rate of 6.1 percent in April. The Centers for Disease Control and Preven-tion (CDC) still has not fully lifted the morato-rium on commercial cruises, which especially hurts Carnival and other cruise lines that call at Port of New Orleans. The CDC replaced its emergency “No-Sail Order” guidelines this past fall with the “Framework for Conditional Sail-ing Order,” which allows cruise lines to apply for conditional sailing certificates that allow them to conduct simulated trial voyages in wa-ters subject to U.S jurisdiction. However, it’s not expected that Port of New Orleans will reach its pre-pandemic level of cruise trips until 2022 at the earliest as cruises are expected to have strict capacity require-ments for the foreseeable future. With far fewer tourists coming to the city than pre-pandemic levels, workers at the various bars, casinos, restaurants and hotels in New Or-leans are having to make due with less wages, which severely impacts their ability to pay rent. “We’re a tourist economy, and the majority of our households work in the service and tourism industry, which all fac-tors in to how much they can afford for housing,” says Brenda Breaux, ex-ecutive director of the New Orleans Redevelop-ment Authority (NORA). “What the pandemic has done has further exposed the city’s need for afford-BRENDA BREAUX able housing.” Executive Director, In 2015, the city’s New Orleans primary governmen-Redevelopment tal housing agencies, Authority The New Orleans Redevelopment Authority is the landowner for a tract in the city’s Seventh Ward district at the corner of St. Bernard and North Claiborne avenues. NORA is currently accepting bids from developers for a new affordable housing property that will feature 50 to 60 units. (Photo courtesy of NORA) including the City of New Orleans Office of Community Development, Housing Authority of New Orleans (HANO) and NORA, as well as some state agencies and various businesses and community leaders, drafted a comprehen-sive strategy to combat its housing crisis called “HousingNOLA.” The plan calls for the cre-ation or rehabilitation of 33,600 affordable units (both rental and homeownership opportunities) by 2025. In the first five years, the goal was to address the most dire housing needs first and produce at least 7,500 new affordable housing units. In the latest HousingNOLA semi-annual report re-leased in early May, the report found that only 1,277 units were created in the initiative’s first five years, though the City of New Orleans Of -fice of Community Development declined to provide data to contribute to the report. Judith Moran, vice president of project man-agement with affordable housing development firm McCormack Baron Salazar, says that the goal is being further put out of reach due to the rising costs for construction materials nation-ally, as well as the costs to develop in New Or-leans. “Construction costs are high in New Orleans because of the nature of the soil, storm water management issues and land costs, making it in-creasingly difficult to de -velop affordable housing here,” says Moran. Andreanecia Mor-ris, executive director of HousingNOLA, says JUDITH MORAN that in addition to be-Vice President ing woefully short of the of Project five-and 10-year goals, Management, those figures are also not McCormack Baron fully representative of Salazar the city’s actual need for affordable housing. “The need is one number, and we recognize www.REBusinessOnline.com 20 | Southeast Multifamily & Affordable Housing Business | May/June 2021