Sky-high home costs leave many priced out of New Orleans

Sky-high home costs leave many priced out of New Orleans

NEW ORLEANS -- Uptown remains one of the most expensive places to live in New Orleans. 

On the market right now is a house on Valmont Street that boasts 3,100 square feet, has four bedrooms and four and a half bathrooms. The listing price: $885,000. 

"It's a gorgeous renovation. This would actually in Uptown terms would be considered mid-range," said realtor Greg Jeanfreau. 

If that's not in your price range, there's another home on the market on Memphis Street in Lakeview. Along with its three bedrooms, two and half baths is a cozy backyard and game room. The listing price: $449,000. 

"It's a good price point, it's right at $205 dollars per square foot," said Jeanfreau. 

Jeanfreau is an agent with Latter and Blum Realtors. He said the current growth and demand for housing in New Orleans is unprecedented. It has its plus and minuses. 

"You have people moving here from other parts of the country. To them, $500,000 is like $50,000 to us, and it doesn't seem like that much. It's a pretty wild time. There's a lot of excitement, but there's a lot of things happening and there's people that aren't happy about it." 

Among those unhappy with the pricey local housing market is Minerva Flores. She's raising her 4-year-old son, Damian, on her own. Damian is also a special needs child.

Flores said her bills are piling up. 

"I have to borrow money from friends sometimes just to make ends meet. It's a lot, especially being single," said Flores. 

She pays roughly $900 a month to live in a two-bedroom apartment in Terrytown. Flores wants to move to New Orleans because it would be closer to where her son gets his therapy. 

She said the rent in the city make that virtually impossible. 

"Rent is so high. Food, clothes, everything, these are things I have to consider. I could never make it, you know, on minimum wage," Flores said. 

According to a report by HousingNOLA, rent in New Orleans have jumped 50 percent from 2000 to 2013. Home values have soared 54 percent in that same time frame. Right now, the average price of a three-bedroom, two-bathroom house in New Orleans stands at roughly $159,000. The fair market rental rate for a two-bedroom apartment in metro New Orleans is $965 a month.

I mean there are apartments for $500, $600 dollars, but the conditions are not livable. The bathrooms in some of these places I've looked at are not something I want to expose my son to," Flores said. 

Housing experts say, on the most basic level, what's happening in New Orleans is a function of supply and demand. After Hurricane Katrina, the number of undamaged homes shrunk dramatically, sending home prices soaring. Since the storm, the cost of construction, insurance and property taxes have all increased, in some cases even tripling.

While rent and home prices in New Orleans have shot up, salaries and wages have not. According to the HousingNOLA study, the average household income in New Orleans, roughly $37,000, remained unchanged from 2000 to 2013. 

There's also growing concern for the pay that people who make up the back bone of the city's tourism industry. There are roughly 34,000 workers in the service industry in metro New Orleans. An analysis of the money they made last year finds that housekeepers, bartenders and the like, pulled in less than $23,000. 

"New Orleans is so unique because of the rich culture of its people, and we're very aware and concerned about what's happening," said Ellen Lee. 

Lee is the director of housing policy and community development for the city of New Orleans. Born and raised here, she sees both the benefits and challenges of more people wanting to live in New Orleans. 

"We're really seeing tremendous growth. We know that our population is coming back, post Katrina. Because of that, we are experiencing market pressures in certain neighborhoods that are causing certain areas of the city to be unaffordable for many of our citizens," said Lee.

Harold Brooks said he's feeling that pressure. For almost 20 years, Brooks has lived at a house on St. Claude Avenue near Poland Avenue in the Upper 9th Ward. It's an area that Brooks says is increasingly gentrifying, driving up the costs of homes and rent around him.

"You can't get mad at them. They just bought the house, you can't mad with that individual. You get mad with the city. You get mad with the city. They allowed this to happen, they created this problem," said Brooks.

Lee would argue against that. She said the city is limited in what it can do to when it comes to gentrification, which she believes is happening.

"I think it's something that's real, and certainly from the point of view the residents living there it is, and they're clearly seeing a change in their neighborhoods, we are very concerned about displacement and people not being able to remain in their homes," said Lee. 

So what, if anything, can the city do to help people find affordable housing?

"The direct assistance is something that the city is not able to support a lot of individuals. That's a cost, a price tag that would be untenable to assist every individual. The way we use our financial resources is working with for profit and nonprofit real estate developers, to subsidize the development of rental housing and home ownership housing," Lee said.

Lee points to developments like Faubourg Lafitte as prime examples of what affordable housing may look like in the future. The goal is to have a truly mixed neighborhood, where low to moderate income families can rent apartments next to more affluent families that either are renting or buying the homes across the street. Lee said the city also possesses property which could also be used for housing.

"What we can do is not necessarily making all of the properties available, but in strategic neighborhoods, how might we withhold, if you will, not put on the market for sale every property in the city's inventory so that some of those units can be preserved for affordable housing," Lee said.

Housing advocates estimate that over the next 10 years, 33,000 more rentals and homes will have to be added to meet the growing demand. In the meantime, where can you find reasonable housing prices and rent? Greg Jeanfreau said you may want to look at Gentilly. 

On Warrington Drive near the London Avenue Canal sits a newly renovated, four-bedroom listed at $235,000.

"I think it's a great deal. To me, Gentilly seems to be the promised land of affordable houses. You can really get more for your money than other parts of the city," Jeanfreau said.

Jeanfreau said select spots in Treme can be affordable, but you may have to make some concessions. On St. Ann Street, there's house listed at $100,000, but it's only 500-square feet. 

"It's a small house, it's a postage stamp of a house, it's for somebody that's a minimalist," said Jeanfreau. 

Among the seemingly insane home prices in the Upper 9th Ward is a house on St. Claude Avenue near Press Street. Recently renovated by the Preservation Resource Center, the two-bedroom, two-bath home is listed at $295,000. 

Just down the street though, it all seems irrelevant to Brooks. He said the rising cost of insurance and property taxes, will likely be too much for him to stay in the neighborhood. He feels like he's being pushed out.

"You're going to do one of two things: If you own a house, you're going to sell it, if you're renting, well, you're just going to move." Brooks said. 

On the West Bank, Flores is considering a move to Houston where she has family. It may not be New Orleans, but she said at least there, she says she and her son would have a fighting chance to live in a place without going broke. 

"It's sad that I'm considering it, but I don't know what else to do. I can't afford it anymore," said Flores.

There are affordable options in New Orleans East as well, but keep in mind that flood and homeowners insurance in the East will likely be much higher. The Greater New Orleans Housing Alliance is working with the city and neighborhood associations to come up with a strategy to create more housing, but that's a 10-year plan.


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