A ‘Housing Trust Fund’ is on New Orleans ballots next month. What do voters need to know?
It is no secret that New Orleans is facing a housing crisis. Like many other cities across the nation, New Orleans is contending with a decreasing supply of low-cost housing coupled with cost-of-living increases across the board.
The city has also faced its own acute challenges: an influx of short-term rentals;rising insurance premiums due to frequent, devastating hurricanes and persistently low wages in key industries – all of which create knock-on effects in the housing market. According to a 2023 report, the New Orleans area needs a whopping 44,000 additional affordable rental units to support its population. Much of that need is concentrated in the city itself. But according to HousingNOLA’s 2024 housing report card, released last month, the city created just 239 new units over the past year.
A new ballot measure aims to address the city’s affordable housing crisis by creating a Housing Trust Fund. If passed, the measure would obligate funding to promote affordable housing. Crucially, it would not levy any new taxes on residents.
Proponents say the Housing Trust Fund is an important step towards materially addressing the affordable housing crisis that has accelerated in recent years. But some critics, such as the Bureau of Governmental Research, argue that the measure, which would amend the city charter, is too restrictive.
Now the question will go to the voters.
If passed, the Housing Trust Fund would dedicate 2% of the city’s general fund each year to affordable housing efforts, such as preserving or creating affordable rental housing or promoting affordable homeownership programs. According to the BGR report, funding is estimated to come to about $17 million in the 2026 budget year, the first year the dedication would be required.
In an interview, Councilmember Lesli Harris, who has championed the proposal, that 2% number is designed to match the amount of federal money that the city usually receives each year. (Housing Trust Fund dollars would be in addition to such funding. Under the language of the charter amendment, the council must appropriate the trust fund money from city funds rather than counting state or federal dollars toward the 2% requirement.)
“It’s about the same amount of money that it comes in in federal grants every year,” Harris said. “But this wouldn’t be tied up with the same regulations and subject to the same restrictions.”
When asked how that money might be spent, Harris pointed to a number of possible uses: $2.5 million could pay for fortified roofs for over 200 households, helping to drive their property insurance rates down and keep homes safer during storms. $1 million could be used to upgrade more than 100 rental units so that they are in compliance with the Healthy Homes ordinance. And $5 million could provide gap financing to developers who need extra assistance to secure a loan for multi-family housing.
“It is a difficult number to conceive,” said Monique Blossom, the director of policy and communications at the Louisiana Fair Housing Action Center. “But it’s really important to keep in mind that this is not going to create a skyscraper of apartments. It’s going to be more allocated to smaller projects. And for a lot of developers, getting something over the finish line.”
If approved, the Housing Trust Fund will be administered by Finance New Orleans, the city’s longstanding housing and development financing agency, and the New Orleans Redevelopment Authority. A seven-person advisory council – with members appointed by the Mayor’s Office, City Council and local affordable housing organizations – will decide how to allocate the funds.
By ordinance, each area of focus – preservation of existing affordable housing, creating new affordable housing and promoting affordable home ownership – would be guaranteed 15% of the Housing Trust Fund. The advisory council will decide how to divvy up the remaining 55% of the funds, prioritizing whichever area they think needs the most attention.
Harris also noted that the spending from the fund will be transparent. There will be a public dashboard to track spending, as well as quarterly meetings with the council.
“That means the public has the opportunity to interact with how the money is allocated, where the money is going, and to ask questions as they should be able to do,” Harris said.
Pushback from good government group
The Housing Trust Fund has garnered support from local housing justice organizations and advocates, who say that this measure will be a boon to affordable housing.
“New Orleans has failed to keep housing affordable for the people who live and work here,” Blossom said. “We’ve relied solely on (federal) funding until very recently to fund the creation and maintenance of affordable housing, and that lack of investment has helped get us in the situation that we’re in.”
However, a local good government group has raised concerns over the ballot measure.
The Bureau for Government Research released a report advising residents to vote against the proposed charter amendment, writing that it would be “difficult to alter or undo.” They further argue that because the ballot measure would create a compulsory allocation, it might limit the flexibility of future city budgets.
BGR argued for dedicating affordable housing funds through an ordinance, which could be eliminated or modified by the City Council, rather than a charter amendment, which can only be changed through a citywide vote.
“Our research certainly shows that there is a need,” said Rebecca Mowbray, president and CEO of BGR. “However, we differ on the mechanism, and we believe that if the city wants to invest in affordable housing, it should do so through a more adaptable approach than the charter amendment.”
She instead recommended that the city improve and use a “backup ordinance” already in place to obligate the funding to affordable housing efforts. The ordinance, which takes effect next year, calls for at least $20 million annually to finance affordable housing projects.
Mowbray pointed to other cities that have successfully implemented similar housing trust funds, like Pittsburgh, Cleveland and Miami – all without charter amendments.
“What we found is that we actually like the backup ordinance better because you can accomplish everything that they want to accomplish through the Housing Trust Fund charter change, but you can also preserve some flexibility and retain the ability to adapt to any future needs that may come up 10 or 20 years from now,” Mowbray said.
But Councilmember Harris disputed this.
“That backup ordinance doesn’t do what the charter amendment does,” Harris said, saying that the backup ordinance would allow the city to use existing federal dollars for the fund. “So we would be looking at maybe $5 million of new money rather than the $15 to $20 million of new money.”
Some housing justice advocates raised skepticism over BGR’s endorsement against the ballot measure.
“It’s no surprise that BGR would come out in opposition to the Housing Trust Fund charter amendment because they have a history of hostility towards funding for housing,” Blossom said. In the past, BGR has come under scrutiny for its critical reports on how and whether the city should promote further affordable housing.
Proponents also point to Atlanta as an example of another city that used a charter amendment to successfully establish a housing trust fund, though that amendment has more stipulations than the one proposed for New Orleans.
“We can’t leave housing up to political fiat,” Harris said. “This needs to be a priority.”
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This story was originally published by Verite News and distributed through a partnership with The Associated Press.