BATON ROUGE -- The state Legislature on Thursday approved
a proposal by the Louisiana Recovery Authority for
rebuilding rental housing, including a controversial program
that would require income means testing for renters.
A group of mostly Republican lawmakers had called on
legislators to vote against the program. State Rep. Steve
Scalise, R-Jefferson, on Thursday asked the LRA to
re-evaluate the requirements in the program. He said
lawmakers had been misled into thinking that the federal
Department of Housing and Urban Development had required the
specific income restrictions.
"They're hiding behind HUD, and it's not
HUD's requirement to do it," Scalise said.
The LRA recently approved several changes in a plan for
using billions in federal dollars to rebuild rental housing
damaged by Hurricanes Katrina and Rita. Those changes were
submitted to the Legislature as five separate items on a
mail ballot, all of which passed. The changes now need HUD
approval.
The LRA has proposed several programs backed by federal
block grants to encourage low-income and mixed-income
housing developments for rental property. Those include a
low-income housing tax credit program approved by lawmakers
Thursday. The Legislature also approved a new plan for
assisting owners of mobile homes, and a program to help
local governments implement a new statewide building code.
The most controversial item on the ballot was the program
for small-scale rental property, aimed mainly at buildings
with one to four rental units. The LRA wants to spend $869
million over the next 10 years to repair an estimated 18,000
of these units.
The program would offer no-interest loans to small-scale
property owners only if the landlords rent to people with
incomes below 80 percent of the local median income and
charge rates capped at "affordable" levels, which
have not been determined. A property owner would not have to
pay back the loan unless the building were sold.
On that program, the Senate voted 26-11 and the House
voted 62-32, the narrowest votes of all the items.
HUD maintains figures for median incomes of metropolitan
areas, but has not completed calculations for median incomes
in the New Orleans area after Hurricane Katrina. Its current
figures apply the same average number to all parishes in the
metro area.
For a household of four, the median income in the New
Orleans area is $52,300. The threshold for a low-income
renter would be 80 percent of that figure, or $41,900. The
low-income threshold for a household of three is $37,650 and
for a household of two would be $33,500. A single person
would have to make $29,300 or less to qualify as a renter.
Scalise said he did not oppose the affordable rents but
criticized the income requirements as unfair to the middle
class. The New Orleans area needs more apartment units, a
problem holding back the area's growth in work force.
When Scalise tried to build support for a vote against
the income requirements, House Speaker Joe Salter,
D-Florien, a Blanco ally, wrote members defending the LRA
program.
Salter said HUD regulations require Louisiana to spend at
least half of its emergency supplemental Community
Development Block Grant dollars on low- to moderate-income
people and that the LRA was simply guided by what the
federal agency demanded.
Scalise then asked HUD whether the federal agency
actually requires the income limits across the board for
people renting under the program.
An Oct. 4 letter to Scalise from L. Carter Cornick III,
HUD's general deputy assistant secretary for
congressional and intergovernmental affairs, said,
"This is partly true, and partly is the LRA's
program design choice." While the overall rule requires
that 50 percent of the entire disaster recovery grant from
HUD must be used for activities that primarily benefit low-
and moderate-income households, it is possible to get a
waiver from some of the requirements and to allow property
owners to rent some units to low- income tenants and others
to anyone at market rates, the letter said.
Cornick said that, "to date, the state has not
requested such a waiver."
HUD noted that Mississippi's plan would rebuild
rental units allowing renters with and without income
restrictions.
The LRA's plan requires that 100 percent of units in
the program serve low- and moderate- income people. The HUD
letter said its Community Development Block Grant program
does not require that 100 percent of the small-scale rental
program meet those income levels, under some circumstances.
Scalise said the Salter letter and the LRA's
previous misinformation about HUD's requirements raise
serious questions about whether the Legislature really
understood the rationale behind the program.
"I'm very disappointed that they misled people
in order to get the plan passed," Scalise said.
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Robert Travis Scott can be reached at
rscott
timespicayune.com or (225) 342-4197.
