Study says N.O.’s continued growth could rest with her elders

21st November 2011   ·   0 Comments

By Christopher Tidmore
Contributing Writer
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A report by the Greater New Orleans Community Data Center argues that New Orleans is becoming a progressively older city, and that’s an opportunity. According to gnocdc.org’s Alli­son Plyer and Elaine Ortiz, the city has a chance to gear its economy towards the elderly in such a fashion that can decrease blight (by increasing population) while providing improved resources for our graying citizens.

As Plyer wrote in a report for The Urban Institute, “By 2020, the share of the city’s households headed by adults age 65 and older will spike…In the most conservative scenario, the number of elderly households will increase by 8,800 (or 34%) from 2010 to 2020.”

“The predictability of the upcoming demographic changes offers an opportunity for our city to get ahead of the curve and enact policies that support a diversity of households,” she continued.

“The city and other stakeholders should continue to implement strategies to attract new residents. There are examples from other cities about coordinated marketing of neighborhoods and online portals to accomplish this goal. But in order for the city to thrive, we also need to ensure we meet the housing needs of aging residents.”

The solution of how to pay for the medical, social, and housing resources for this drastic spike in the Crescent City’s elderly population, in the view of Plyer and her colleagues, is to attract wealthier retirees from outside New Orleans. That would answer many of the local problems caused by decades of out-migration, in their view, as well as bolster resources for those over the age of 65.

Their solution, however, has also re-launched the debate in time for the Spring legislative session over whether Louisiana should phase out its income tax on retirees. And, whether it should be done in such a fashion to immediately exempt those who move into the state—in order to help draw new elderly residents.

THE CHALLENGE

“Do you have many snowbirds in Louisiana?” an oil executive from Calgary, Canada asked this reporter last week. He was accustomed to retirees escaping to Arizona, Florida, or Texas, but was surprised by the few who came to Louisiana, in general, or New Orleans, in particular.

“You have great fishing, year-round golf, and a fantastic culture,” he continued, “but Louisiana is not on the radar screen for most Canadians.”

Nor for most Americans either. The Pelican State trails most of its sunbelt neighbors in the total number of people who choose to either retire here—or payday loans oxford alabama live in Louisiana even part of the year.
As real estate developer John Treen explained to The Louisiana Weekly, “We have never been good at attracting retirees. The message has not gotten out.”

Treen who explored building housing geared for those over the age of 65 knows something of the topic. “We should be in the top three retirement locations in [the Continential] U.S. We have the best fishing in the world less than a hour away from some of the most beautiful parks and sports, all right next door to the food and culture of New Orleans. It’s a combination that should bring thousands of retirees to Louisiana [to live], yet it has been slow.”

A confluence of growing economic deprivation matched with a need to find a way to fund an increasingly aged society in Southeast Louisiana may provide the political impetus to act.

“Katrina and the levee failures dealt a massive blow to the metro’s economy,” Plyer explained. “The New Orleans area economy was just recovering from that blow when the Great Recession struck and leveled off jobs recovery. Thus, the metro today has fewer jobs than during much of the 1980s, and a population that is roughly the size it was in 1975. Moreover, the New Orleans economy continues to be largely driven by declining industries of tourism, oil and gas, and shipping, which does not bode well for future job growth. Until new emerging industries generate substantially more jobs, the New Orleans metro will have slow population growth and modest housing demand.

“And New Orleanians are feeling the impact of the Great Recession, although to a lesser degree than in the nation. The poverty rate in the city increased from 21 percent in 2007 to 27 percent in 2010, about the same as it was back in 1999. Meanwhile, poverty rates in the U.S. are now higher than eleven years ago. But even with the nationwide increase in poverty, the city of New Orleans’ 27 percent poverty rate is substantially higher than the United States average of 15 percent.”

“Since the onset of the recession, job losses in the New Orleans metro area have been more moderate than across the nation. However, the New Orleans metro had 98,300 fewer jobs and 148,746 fewer residents in 2010 than in 2000. As a result, demand for housing has declined since 2000, and vacancies and abandonment have increased. Current eco­n forecasts suggest only tepid job growth through 2018. Thus, demand for housing ripping off payday loans will likely be driven primarily by the changing needs and preferences of the population at its current level rather than by a large influx of newcomers.

“Just as suburbanization has dramatically changed housing choices and caused major geographic shifts nationwide over the past half century, the aging of the baby boomers will profoundly affect housing needs and living arrangements in coming years. These impending changes may result in even greater loss of population and increasing blight in New Orleans. Or, by planning the city’s development with the knowledge of these demographic trends clearly in mind, we can leverage the power of these shifts to increase our popu­lation and reduce blight.

“The progression of the baby boomers through the age ranks along with falling birth rates have already brought massive changes to our region – and indeed the whole country – with many more changes yet to come. For example, in the New Orleans metro area, since 1980, the share of households with children has fallen from 43 percent to 33 percent, while the share of individuals living alone has grown from 24 percent to 28 percent. These trends are likely to accelerate as the baby boomers age – with individuals living alone outnumbering households with children in the not-too-distant future.”

These trends will transform neighborhoods into literal empty-nests unless attempts are made to bring in new residents. “Single-family home sales in the city have fallen substantially since 2007 due to the credit crunch and weak economy. Average monthly home sales in New Orleans through September of 2011 are 35 percent lower than the same period in 2007 and 13 percent lower than in 2008. However, 2011 home sales are so far running about even with home sales during the previous two years. Thus far in 2011, 182 homes have been sold each month at an average sale price of $239,175, which is just three percent lower than during the same period in 2010. In the rest of the metro area, single-family home sales through September are also down from 2007 and 2008, but slightly higher than last year. In 2011, 498 homes have been sold each month at an average sale price of $192,787.”

Moreover, there are fewer young people in the city, looking to buy houses, even with the Hispanics who came to help rebuild after the storms. “In 2011, the first of the baby boomers began turning 65. The number of people 65 years and older will soar over the universal cash loans leicester next two decades. Already, we have seen small shifts in the age structure of the metro area. In 1980, only nine percent of the metro population was 65 and older. In 2010, it was 12 percent.”

“Were it not for the influx of 34,561 Hispanics and Asians under the age of 65 over the last decade, the age structure of the New Orleans metro would be even older. While the metro population over 65 years of age is 68 percent white, only 55 percent of the population ages 20 to 64 are white, and only 45 percent of children 0 to 19 years old are white. People of color make up 45 percent of the working age population and the majority of the child population, with African Americans representing the largest share. Hispanics account for a rapidly growing share of the population under the age of 65. In 1990, only four percent of the metro area population under 65 was Hispanic. In 2010, it was eight percent.”

Many older residents do prefer to “age in place,” as Plyer put it, whether they are suburban residents of Louisiana or of other states. But, more than a few are attracted to city living, especially in a culturally rich place as New Orleans, but only if there are neighborhoods that cater to older residents. So far there are not. “New Orleans can strive to attract those empty-nesters who may prefer to give up their suburban homes for more walkable downtown neighborhoods, but because most older adults prefer to remain in their homes, the city will not likely see an enormous influx of retirees. However, as the large cohort of New Orleanians reaches older age, decision­makers maybe able to reduce a large outflow of households by creating policies that support New Orleanians remaining in their homes as they age.”

According to American Com­munity Survey 2009 data, in New Orleans, individuals 65 and older living alone are disproportionately more likely to be homeowners living in single-family homes built before 1950. As these seniors age, they may reach a decision point about whether they can continue to stay in their historic homes. “Indeed, it seems that many seniors reached this decision point over the last decade resulting in the loss of hundreds of elder households from historic neighborhoods — including nearly every neighborhood that did not flood along the ‘sliver by the river.’ As more and more New Orleanians reach older age, enabling them to remain in their homes payday loans rancho bernardo will be a critical component to reducing blight and abandonment in the city.”

Some elders will eventually need special care facilities already present in the city such as the Archdiocese’s Christopher Homes; however, the city needs a large expansion of infrastructure for the elderly that can live on their own. And, since New Orleans also features, according to GNOCDC.org, some of the poorest retirees in the nation, a market of wealthier retirees must be attracted to help build up the economy of elder care.

There is not enough disposable income amongst the city’s retiree to do this on their own, according to Plyer, “Affordability problems persist for New Orleans homeowners. In the city of New Orleans, median housing costs for home-owners with a mortgage (including taxes, insurance, and utilities) were $1,470 per month in 2010, 14 percent higher than in 2004. For homeowners without a mortgage, costs have increased by 19 percent since 2004 to $467 per month. A cost-burdened household, as defined by federal standards, pays more than 30 percent of pre-tax household income on hous­ing costs. In 2010, 35 percent of New Orleans homeowners were cost-burdened, a higher share than the national average.”

We need new residents, and in strange way, demography and politics may be coming together for a solution.

THE POSSIBLE ANSWERS

Plyer and her organization advised, “To make the best use of our limited resources, our community needs a forum to facilitate collaboration among the various systems working to improve elderly services, including housing, transportation, social supports, and in- and out-of-home services. A network crossing issue areas and jurisdictional boundaries would enable groups to share their expertise and plans, help identify opportunities for leveraging disparate efforts, and provide a robust voice for increasing funding or innovative programs for services or housing.”

“A strong love of place is perhaps one of the most distinguishing features of New Orleanians. This love of place made us resilient enough to rebuild our city after the costliest disaster in U.S. history. If we start planning today, together we can ensure that New Orleans continues to be a place we can all enjoy well into our twilight years.”

Some legislators have mused, how­ever, that simple coordinated strategies, while necessary, do not go far enough. “Right now, if you were a retiree with means, where would you go, Florida, with no income tax or Louisiana with a six percent tax?” mused State Senator Conrad Appel in a past interview with payday providers this newspaper.

Increasingly, the — has learned of an attempt to create a scaled-back income tax phase out. In the 2011 legislative session, a coalition of Democrats and Republicans nearly succeeded, in passing out of both the Senate and House, a complete end to the state income tax. Only the strong, yet quiet, opposition of the Jindal Administration forestalled the end of income tax. Noted in the debate was the need to attract new residents, which a target income tax phase out might accomplish.
Pre-filing of bills for the Spring session will not begin formally until after the inauguration in January, but this newspaper has learned of interest — based on the demographic findings — in a new legislative attempt to phase out the income tax, but just for those over the age of 60. And, then only over two decades, unless you were a new migrant to the state.

The proposed plan, as it was described, would eliminate taxes for those over the age of 80, a relatively small hit to the state budget. Then the phase out would progress downward year by year until to exempts all those over the age of 60 for income taxation (IE those over 80 exempt, next year those over 79, then 78, and so on).

By doing so, it would also allow the state to suspend income taxes for new in-migrants immediately, or those over 60 who have not lived in Louisiana for at least 10 years. As these are new residents, there would be no income tax loss to the state budget. Since taxes would be going down for everyone else over time, it is expected by advocates of the plan that the proposal would pass constitutional muster under the equal protection clause. And, these new residents would be buying houses, producing sales tax revenue, and help fund out retirement infrastructure as soon as 2013.

Armed with a $75,000 homestead exemption and a locked property assessment for those over 65, a Louisiana that would be income tax-free would present one of the most attractive locations for the elderly to retire below the snowline. And, the increased wealthier retiree population moving in could help finance the creation of an improved care network for our increasingly elderly citizenry already here, or so the plan’s advocates suggest.

This article was originally published in the November 21, 2011 print edition of The Louisiana Weekly newspaper