Agency set to lose $31 million
The Housing Authority of New Orleans will have $31 million less to spend next year, based on a budget approved Tuesday by the agency’s one-man board, David Gilmore.
HANO expects to bring in $292.6 million in revenue in the fiscal year beginning Oct. 1.
That’s down 10 percent from the amount the agency had to spend in fiscal year 2013.
HANO will receive less money, in part, because of federal spending cuts, said Leslie Dews, the agency’s deputy manager for administration. Federal subsidies are expected to decline by 30 percent in the coming fiscal year, the result of the budget sequestration process, Dews said.
Revenue also will be down because HANO has completed major construction on several projects in 2013 and won’t need the same level of capital funding in 2014, Dews said.
“There are a number of measures we are going to have to undertake” to stay within the smaller budget, Dews said. “We can’t grow administratively. And certainly in 2015, it’s going to become a serious issue.”
The agency isn’t filling vacant positions unless they are critical, Dews said. HANO has 285 employees now, down from 289 a year ago, and is likely to lose more in the coming fiscal year.
But Dews said it will still provide the same level of service to the low-income families it helps.
Gilmore was not comfortable making the same promise. “The degree to which (a staff reduction) ultimately impacts the service level is unknown at this point, but it’s possible that that might occur,” he said.
HANO generates revenue from a variety of sources including federal housing vouchers, tenants’ rent, the Federal Emergency Management Agency, grants and interest income.
The agency expects to spend $292.5 million in the coming fiscal year. The greatest expense is the Section 8 voucher program, which currently assists with rent payments for 18,095 households. HANO expects to spend $158 million on that program next year.
Another large chunk of the agency’s budget, about $97 million, will go toward capital projects, including:
- $3.6 million to complete 120 elderly units at Columbia Parc, the former St. Bernard housing development, and to finish construction of an “educare” facility.
- $10.4 million for the construction of 52 public housing units at the site of the former Florida housing development and demolition of the units damaged by Hurricane Katrina.
- $10 million to begin the vertical construction of 155 units at the Guste Homes Housing Complex.
- $38 million for construction of the 100-unit Lafitte Senior Housing complex.
- $5.5 million for the demolition of buildings in the B.W. Cooper housing development, now known as Marrero Commons, and the completion of construction on 160 units.
- $29.2 million to help demolish the Iberville housing development and build 227 replacement units.
In other business, Gilmore approved the transfer of 123 HANO-owned scattered-site properties to the Crescent Affordable Housing Corp. He said HANO doesn’t have the money to rehabilitate the properties or the ability to manage them responsibly. The federal Department of Housing and Urban Development must approve the transfer.
“If approved by HUD as we expect, ownership will be transferred to Crescent Affordable Housing Corp. and HANO will hold a mortgage against the properties until sold,” Gilmore said.
The vacant units, many of which were damaged by Hurricane Katrina, are “physically obsolete to a degree beyond that which would allow implementation of a reasonable program for rehabilitation,” HANO said. The units have significant termite damage, foundation and other structural deficiencies, and potentially hazardous materials, officials said.
“Our inability to manage them means that at no time in the future can these properties stay within HANO’s jurisdiction, because HANO can’t deal with them,” Gilmore said. “It is, literally, beyond HANO’s capacity. So we have to think about and figure out some other strategies.”
The item was approved, despite a request by some residents that HANO find a way to renovate at least some of the structures and return them to use in a city in need of more affordable housing.
“It seems to me that some of those houses could be rehabbed,” said Lillie Walker-Woodfork, a resident leader for HANO’s scattered-site properties. “If we’re going into a new era, why can’t we save some of them?”
About 65 percent to 80 percent of the total cost to renovate the scattered sites would have to be dedicated to rehabilitation if HANO were to try to redevelop them, the agency said. HUD does not consider rehabilitation to be cost-effective if it exceeds 57.14 percent of the total development cost.
Gilmore said keeping the properties is not practical.
“I know we’re all interested in figuring out some way to advance the affordable housing cause in the city,” Gilmore said. “But for practical considerations and practical reasons, HANO may not be the best source of getting that done.”