Affordable housing advocates in New Orleans are divided over a $45M housing bond on upcoming ballot

On Nov. 15, New Orleans voters will decide whether to approve three bond propositions, which together could provide an infusion of $510 million to support capital projects across the city. One $415 million bond would support a raft of infrastructure improvements to streets, roads and public facilities. Another $50 million bond would fund stormwater and drainage projects across the city.

But it’s the third item — a $45 million bond for affordable housing — that has become the most contentious going into the election.

The question of whether voters should approve this bond has divided some affordable housing advocates, who disagree as to whether bonds should be used at all to fund affordable housing.

Last year, New Orleans voters added a Housing Trust Fund to the city charter, which obligates the city to dedicate 2% of its general fund budget each year to affordable housing initiatives. Based on Mayor LaToya Cantrell’s proposed general fund budget, that would come out to $14.5 million next year, of which all but about $2.75 million, set aside for administrative expenses and a reserve fund, would be used for housing initiatives.

The money is overseen by an advisory committee made up of representatives from housing organizations across the city as well as political appointees.

Andreanecia Morris, president of the Greater New Orleans Housing Alliance and a co-chair of the committee, is opposed to the bond proposition because she believes it undermines the spirit of this new Housing Trust Fund. Morris’ organization, which has long been an influential voice on housing policy in the city, has sent out emails to supporters urging them to vote no on the housing bond proposition.

“The Housing Trust Fund is intended to be as immediate as possible,” Morris said. Under the proposed schedule approved by the State Bond Commission last month, the first round of bonds wouldn’t be offered for sale until June, after which they must be purchased and the proceeds delivered to the city. General fund money, on the other hand, won’t be “bogged down in the mechanics and unpredictability of bond financing or (federal) funding.”

But Maxwell Ciardullo, a local housing advocate and the other co-chair of the committee, sees it differently.

“I think if we do this right, the bond money can be an additional source of funding on top of the roughly $12 million a year that the Housing Trust Fund provides,” Ciardullo told Verite News. “And I think bond money is especially important because it gives us upfront cash to pay for big expenses without raising taxes.”

When the New Orleans City Council approved the ballot language for the affordable housing bond proposition two months later at its Aug. 7 meeting, there was no explicit mention of the bond being used to finance the Housing Trust Fund. The proposition reads that the bond can generally fund “constructing, renovating, acquiring, and/or improving affordable housing facilities.” But an informational page on the city website only mentions that the bond money will be managed by the Housing Trust Fund — not whether it will ultimately supply the money.

And an earlier July 1 presentation by then-Chief Administrative Officer Gilbert Montaño suggested that the intent of the bond was, in fact, to provide at least some funding for the Housing Trust Fund.

“I had a great fear that we would just be pulling away from the general fund,” Montaño told the council at that meeting, referring to the Housing Trust Fund, which voters overwhelmingly approved last year. “We do understand that some will still have to come from the general fund, but I believe this (bond) is a thoughtful and long-term solution for the city to have a really longstanding affordable housing program as opposed to a competing interest with general fund dollars.”

A representative for the city did not respond to a request for comment by Verite News as to what the strictures of the bond will be.

Councilmember Lesli Harris, who has been one of the council’s most steadfast voices on housing issues in recent years, told Verite News that the bond proposition would strengthen affordable housing measures — and not undermine the Housing Trust Fund.

“The bond provides an additional $45 million for larger multifamily developments across the city, many of which are too big to be financed solely by the Housing Trust Fund,” Harris said. “Passing this bond means more total dollars available for affordable housing in New Orleans, not a replacement for the Housing Trust Fund. The HTF will continue to operate regardless of the outcome of this election, and the bond strengthens, rather than undermines, our broader affordable housing strategy.”

Earlier this fall, the Housing Trust Fund Advisory Committee, which is made up of city and community representatives and oversees the estimated $12.5 million in annual funds available for affordable housing, recommended that the bulk of the fund’s money go to support small, multifamily developments, arguing that it was the fastest way to bring new rental units onto the market – especially since the fund was limited.

Some housing advocates argue that the $45 million bond, on the other hand, could be used to provide gap financing for larger developments.

John Sullivan, the director of state and local policy at Community Enterprise Partners, said that is why he’s in support of the bond proposition.

“Anytime you can add funding for affordable housing, we’re going to be for that,” Sullivan said. According to him, while developers are able to leverage federal tax dollars and private lending to fund large developments, cities still often provide critical gap financing to help the projects come to life. “You do need those larger chunks that are not as easy to fund from the existing Housing Trust Fund allocation.”

But Morris contends that the $45 million bond will not be additional money for housing beyond the Housing Trust Fund, but instead will just be a temporary replacement for general fund dollars to meet the 2% obligation.

Morris was concerned, in part, that city bonds are subject to approval by state officials through the Louisiana State Bond Commission. She also said that previous bond proceeds intended for affordable housing went unused.

“This undermines the trust fund at every level, starting with there’s no guarantee that there will be any money,” Morris argued.

“The bond financing scheme undermines the Trust Fund because it puts the funding, which the voters intended to guarantee, at the whims of the state,” Morris said. “But if the state allows the bonds to go out and the dollars aren’t realized until June, that also takes us back to the funding shenanigans that got us to the point where the voters demanded to use guaranteed dollars.”

However, it appears the bond sales are ready to proceed if voters agree to them. The State Bond Commission approved the $510 million bond package — and the proposed schedule for issuance — in September.

It’s true that some older bond proceeds intended for affordable housing have not yet been used. In 2019, New Orleans voters approved a $500 million bond proposition, with some of the proceeds intended to be used for affordable housing. Those bonds were sold in two rounds, one in 2021 and one in 2024. According to a report by the Bureau of Governmental Research, $15 million from the 2019 sale set aside for affordable housing did, in fact, go out, providing gap financing for five affordable housing projects with a total of 193 units. Another $17 million set aside from the 2024 sale have thus far gone unspent, but that money has been placed into the Housing Trust Fund.

As to Morris’ concern about the uncertainty of bond funds materializing in a timely way, the annual 2% requirement in the Housing Trust Fund law remains in place no matter what happens with any future bond sales. Under that law, anything that bond proceeds don’t cover would have to be made up with general fund money.

In addition, there is nothing in the Housing Trust Fund charter amendment or city ordinance that requires that money in the fund go out to housing projects on any particular schedule. The advisory committee and the council determine how and when the money will be spent, regardless of its source.

In her opposition to the bond proposition, Morris has found support from the Bureau of Governmental Research, which came out against it in a recent report.

“It’s an important opportunity to leverage additional public and private dollars to help solve this very major problem here in New Orleans, but we have some concerns about the mechanism of using bond funding to pay for this,” said Rebecca Mowbray, BGR’s president, adding that the Housing Trust Fund already had its own funding mechanism. “You should be paying for annual recurring expenditures with recurring funds.”

Of particular concern to Mowbray was that, unlike the larger bond proposals for infrastructure and drainage, there was no list of specific affordable housing projects that would be funded via the bond.

“One of the things we look for is, is there a plan to tell us how, if you get this, you are going to use the money?” Mowbray added. “That’s important, basic accountability. And people haven’t really had clear answers on this.”

In a July presentation before the City Council, city officials declined to list specific affordable housing initiatives that would be funded because “affordable housing project timeframes are lengthy and sometimes unpredictable,” according to one slide.

However, Ciardullo expressed skepticism toward BGR’s stance, noting that the group also came out against the Housing Trust Fund last year.

“BGR has never met an affordable housing initiative that it didn’t oppose, and they’ve lost all credibility on the issue as far as I’m concerned,” Ciardullo said.

Mowbray contested his characterization, saying that while the group recognizes the urgent need for affordable housing, they believe that mechanisms used to address it should be better honed.

“I would love to have us have a position in favor of it; It’s a major issue facing the city,” Mowbray said. “But I would turn it around and put back on some of the people who have been working on this and be like, why, if you care so much about this thing, why aren’t you able to come together and figure out these details?”

Still, for Ciardullo, the question as to whether to support the bond proposal is uncomplicated.

“I’m just a little confused about why anyone would turn down $45 million for affordable housing, given where our budget is at right now,” he said. “I think the bottom line is that we vote yes for the Affordable Housing Bond, and then we can let the city know that we want that $45 million to go to the big, long neglected developments … and that we have it in addition to the Housing Trust Fund.”

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This story was originally published by Verite News and distributed through a partnership with The Associated Press.