N.O. City Council begins process to place expiring affordable housing tax on Nov. ballot
7th June 2021 · 0 Comments
By Michael Isaac Stein
The Lens
New Orleans City Councilwo-man Kristen Palmer is initiating the process to place a ballot proposition before Orleans Parish voters in November that would renew an expiring affordable housing property tax.
The housing tax is one of five local property taxes that expire at the end of the year, worth a combined $23 million annually. Last year, Mayor LaToya Cantrell presented voters with a controversial plan to renew and restructure those five taxes, but voters shot it down.
Shortly after that defeat, the Cantrell administration announced that it had no plans to make another attempt at renewing the taxes this year, essentially leaving them to expire. The City Council then stepped in and committed to putting the largest of those five taxes — dedicated to the Public Library — on the Nov. 13 ballot. And it’s now starting that process for the housing tax as well.
Cantrell has come out in support of the Library renewal effort. But in a statement to The Lens, the administration wasn’t as enthusiastic about the housing renewal plan, saying it wasn’t Cantrell’s “preference.”
“Our preference is to take the next year to come up with an overall strategy and plan around our funding needs, including affordable housing but also other priorities such as early childhood education and maternal health. As the Mayor stated last year, she does not intend to propose millage votes this fall, and any discussion about new millages or the extension of old millages would happen next year.”
The expiring housing tax was first approved by voters in 1995, and generates between $3 million and $4 million every year for the city’s Neighborhood Housing Improvement Fund. The fund can be used to help provide homeownership opportunities, alleviate blight and promote affordable rental housing through direct rental assistance and by incentivizing affordable housing development.
For years, much of the money generated by the tax was used for administrative costs for code enforcement. But in 2015, the council, led by then-Councilwoman LaToya Cantrell, passed an ordinance requiring that it instead be used specifically for blight remediation and affordable housing. Raising money through the Neighborhood Housing Improvement Fund was a priority for Cantrell when she was on City Council.
The council’s Thursday meeting agenda includes a motion announcing the council’s intent to formally place the renewal on the ballot at it’s July 15 meeting — a necessary procedural step. But Palmer said the issue would go through a committee meeting first.
“We’re going to start the process and see how it goes,” Palmer told The Lens. “We’re going to bring it to committee and it will be an open and public process. That’s how government is supposed to work. If there is another way we can go that everyone is good with in terms of setting aside money and directing money to affordable housing, we’re all ears.”
Palmer said that this process would allow the administration a chance to present an alternative plan if they don’t support renewing the tax.
“My hope is that by starting the process to introduce it, we will have a plan presented to us,” Palmer said. “If this is not something the administration wants, then they would need to show us where the money is coming from to support affordable housing, and whether or not that money has the same type of flexibility that the [Neighborhood Housing Improvement Fund] has.”
Palmer said that while the city has long had an affordable housing crisis, the coronavirus and related economic fallout made affordable housing funding more vital now than ever.
“If they want to wait until next year, if the public wants to wait until next year, let’s have that discussion and figure out where the money is going to come from for this year for affordable housing,” she said.
On Tuesday (June 1), the Louisiana Fair Housing Action Center voiced its support for renewal in a letter co-signed by 78 other organizations including neighborhood associations, homeless service providers, real estate companies, criminal justice reform advocates and more.
“It would be particularly egregious to allow this funding stream to lapse—even for one year—when we know there are acute and desperate needs for assistance in our community. Despite lower rates of COVID infection, tens of thousands of families in Orleans Parish are still behind on their rent or mortgage due to pandemic-related financial hardships.”
The letter also pointed out that renewing the funding would be easier this year because it’s a tax renewal. If the city waits until the tax expires at the end of the year, it would have to be introduced to voters as a new tax increase.
Councilwoman Helena Moreno said she is signing on with Palmer as a co-sponsor of the motion to initiate the tax renewal ballot proposition.
“The working people that have built and sustained our city must have a place to live in it far into the future,” she said in a statement.
The housing tax is one of five taxes expiring at the end of the year. The other four are dedicated taxes for the New Orleans Public Library, economic development, capital improvements and street and traffic control devices.
The public library tax — the biggest of the five — is being placed on the Nov. 13 election ballot with the support of the City Council and Cantrell. The housing tax could also end up on the ballot.
But no public plans have been announced yet for the remaining three taxes.
“I’ve not heard of any plans,” Palmer said. “I’m just kind of focused on affordable housing right now.”
Two of the three remaining taxes — for street and traffic control devices and for capital improvements — brought in roughly $10 million last year. The third tax — dedicated to economic development — was cut completely by the City Council in 2020 in response to skyrocketing property valuations throughout the city. So although the economic development tax doesn’t officially expire until the end of the year, it hasn’t generated any funds since 2019.
Last year, Mayor LaToya Cantrell unsuccessfully attempted to renew and restructure all five taxes.
Cantrell’s proposal would have kept the tax rate exactly the same, but would have consolidated the five taxes into just three. The main effect was that it would have diverted roughly 40 percent of the library tax to other uses, mainly economic development.
The plan — which was presented to voters as three interconnected but separate ballot initiatives — was criticized for failing to offer a clear vision for how the library would adjust to such a large budget reduction, or how exactly the city would spend the money being taken from the library budget. Voters rejected all three propositions in December.
Now, Cantrell says she wants to regroup this year and introduce an entirely new property tax proposal next year, mentioning early childhood education and maternity care as possible priorities.
The above article originally appeared in The Lens on its website (www.thelensnola.org). The Louisiana Weekly enjoys a partnership with The Lens.
This article originally published in the June 7, 2021 print edition of The Louisiana Weekly newspaper.
