News When Tearing Down Public Housing Might Be a Bad Idea
posted by April 9 at 15:26 PMon
When you haven’t exactly nailed down how you’re going to replace it.
The US Department of Housing and Urban Development (HUD) successfully (and controversially) pushed last year to tear down several thousand units of public housing in New Orleans after Katrina—even though much of the housing had not been damaged in the post-hurricane floods. The units, which housed more than 5,000 people, were supposed to be replaced with “mixed-income” housing by a private developer. In the meantime, tenants would have to make do with (toxic) FEMA trailers.
Except, whoops, the national housing credit crunch is making HUD’s plan, which relies heavily on private financing, look less likely:
The rapid decline in financial markets has upset plans developers made last year to remake the public housing developments with a mix of public and private money. Since the City Council voted to demolish the complexes late last year, a spiraling credit crisis has made banks uneasy about making new loans. Meanwhile, the value of low-income housing tax credits that will be used to finance the projects has declined.
In recent weeks, the Louisiana Housing Finance Agency, the state entity handling the award of tax credits, has said that any affordable housing developers who have not yet closed on their financing plans may find themselves unable to do so. […]
In December, Mayor Ray Nagin required developers to submit copies of financing plans before the city would issue demolition permits, but those were not signed deals proving that the financing was actually in place.
The Times-Picayune filed a public records request for copies of the financing plans submitted by each developer, but the mayor’s office did not make them available within three days as required by law.
So impoverished former public-housing residents may find themselves SOL, thanks to the short-sighted actions of a disgraced former housing secretary (Alphonso Jackson, who resigned in March) and a controversial mayor who refused to help public-housing residents return to their homes after Katrina hit.
Via Facing South.