David Hammer / Eyewitness News
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NEW ORLEANS -- The city's interpretation of a special post-Katrina zoning ordinance is keeping some rental property owners in Lakeview from using more than $1 million in federal money to repair storm-damaged doubles.

As the state struggles to deal with thousands of unfixed owner-occupied houses that received Road Home grants, the Road Home's separate program for rental properties has a different challenge in Lakeview: grantees that can't rebuild because of the city's Department of Safety and Permits.

The landlords say they've been trapped first by a Road Home rental program that took years to launch, then by a city that hasn't issued new permits to fix up Katrina-damaged doubles since 2011.

The city and the Lakeview Civic Improvement Association say the city's 2007 Lakeview Single-Family Residential District zoning ordinance was meant to preserve Lakeview as a community of single-family homes.

The landlords and fair housing advocates say the ordinance clearly envisioned maintaining the existing doubles in Lakeview and any effort to block their recovery is as a violation of federal housing laws and potentially discriminatory.

'The City has been consistent in applying the current law and is seeking guidance from the court on possible solutions,' said Tyler Gamble, a spokesman for Mayor Mitch Landrieu. 'Our goal is to be able to put these properties back into commerce in a way that is consistent with the character of the neighborhood.'

The Louisiana Division of Administration says its Road Home program is not in conflict with the city's zoning ordinances.

'The state and the City share the same goal to reduce blight in New Orleans,' state spokesman Doug Baker said. 'The City regulates its own permitting regulations and zoning, but we are working with the City to help ensure that the homes that did receive (Road Home Small Rental Property Program) money move forward according to the law. If a property owner impacted by any zoning changes wishes to continue to rehabilitate a smaller number of units, the SRPP remains committed to working with them and to restoring affordable rental units back into the City. However, this must be done in compliance with the City's zoning laws.'

Sue Spilsbury and her sister want to fix a double on Memphis Street that their family has owned and rented out since 1961. It was built in 1933 by Cajun carpenters and designed to flood, she said. She's done little but paint and clean it since Katrina, but she believes the plaster and original flooring has held up well and the $200,000 Road Home was prepared to give her was going to allow her to make it nice again.

But, meanwhile, many of her neighbors have turned modest single-family homes into mansions. After being held up by the slow Road Home, she says 'a small group of mansioneers' have misapplied the Lakeview zoning ordinance to keep her from bringing renters back to the block.

The ordinance clearly states that doubles that were demolished after the storm had to get a permit to rebuild before Aug. 29, 2010, the fifth anniversary of Katrina. But WWL-TV legal analyst Doug Sunseri said the ordinance is silent on any deadline for permits for renovating two-family homes that still stand.

And yet, when Spilsbury went to the Department of Safety and Permits, she was told she could not renovate any double in Lakeview. She said the staff pulled out a memo written by former Safety and Permits Director Paul May in August 2011. In it, May said he found the ordinance 'unclear' and 'therefore, effective immediately, no permits are to be issued for the renovation of an existing two-family dwelling in' Lakeview.

Shelley Midura, the former city councilwoman who represented Lakeview and proposed the ordinance in 2007, said the intent was never to block renovations of existing doubles.

'I think it's a stretch to interpret that section the way it's being interpreted and I don't think that was the intent,' Midura said. 'It could not be clearer to me that the intention was to allow existing doubles to be renovated.'

But that's not the view of the current councilwoman, Susan Guidry, who would have an opportunity to clarify the ordinance if she thought that were necessary. She was a part of the Bring New Orleans Back commission in another neighborhood and observed some of the deliberations of Lakeview leaders when the ordinance was being crafted.

She said they believed most landlords would have to tear down and rebuild from scratch, and that's why she feels the five-year grace period was really intended for any double in Lakeview.

The state Division of Administration says there are only three properties in Lakeview that got Road Home rental money and are not done rebuilding.

But the issue of the ordinance affects potentially dozens of other unfinished doubles that have sought or could seek permits if the city can't continue the blanket denials.

Lakeview Civic Improvement Aassociation President Ann LeBlanc has kept the pressure on the Board of Zoning Adjustments to keep enforcing the block on two-family building permits.

Speaking to the BZA last year against landlord Brad Wegman's permit application, LeBlanc warned that allowing any such permits would be 'a game-changer for Lakeview.'

'This isn't just an individual case,' she said. 'We have over 50 properties and if we don't start consistently applying this ordinance, you're going to change Lakeview.'

On the contrary, Spilsbury said this enforcement of the ordinance is an effort to change the Lakeview she grew up in. She filed a lawsuit against the city, but former Orleans Parish Civil District Court Judge Nadine Ramsey, who is now running for City Council, gave a one-word denial. Spilsbury has appealed to the Fourth Circuit Court of Appeal.

Wegman, meanwhile, could have gotten about $1 million to rebuild or renovate his family's five multi-family rental properties if it hadn't been for the ordinance. But neighbors don't feel sorry for him because they have been wanting to get rid of his family since before Katrina.

Stephanie LaBarriere lives next door to a Wegman property on West End Boulevard. It is a rickety empty shell, with its doors and windows left wide open. LaBarriere said the tenants sold drugs before Katrina and lived in squalor with no electricity or water after the storm. Someone associated with the Wegmans' upstairs tenants was even shot to death in the alley next to her house 13 years ago, she said.

Wegman said his brother who lived in the property has had drug problems, but that allegations of drug-pushing tenants or any kind of murder associated with his properties are completely false.

Wegman and his Road Home-appointed contractor, Paul Cook of One Construction, sought a permit to turn the three-apartment house next to LaBarriere into a double in October 2012. They were denied, at LaBarriere and LeBlanc's urging, among others. At one point, Cook suggested that denying a permit might be a violation of federal fair housing laws.

And now, formal complaints to that effect have been filed with the U.S. Department of Housing and Urban Development, while the Greater New Orleans Fair Housing Action Center is representing several Lakeview landlords in court alleging housing discrimination.

'There's absolutely no intent in this ordinance or with our (Lakeview Civic Improvement Association) board to discriminate against anyone based on race or socio-economic basis,' LeBlanc said. 'In fact, post-Katrina Lakeview is very different than it was before Katrina. We have African-Americans in our neighborhood, we welcome them. We welcome everybody. It has absolutely nothing to do with anything that would violate the Fair Housing Act.'

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