A plan to build a multifamily rental housing complex in the Lower 9th Ward is on hold after a state agency failed to provide a major component of its financing.
The Louisiana Housing Corp. declined last week to provide tax credits to Global Green USA, which has proposed building a 20-unit, mixed-income apartment building at Douglas and Andry streets. The agency’s board, led by state Treasurer John Kennedy, said the project was too expensive and would be burdensome to taxpayers.
The decision reversed one made in 2009 giving Global Green the tax credits it needed to move forward with the project.
Global Green said Thursday it will file a formal letter of appeal to the Louisiana Housing Corp.
Global Green USA is the U.S. arm of Green Cross International, an agency that advocates “green” building and other sustainable projects. The nonprofit has built five single-family homes in the Holy Cross neighborhood since 2006.
The $5.4 million project was to be built, in part, with $1.2 million in low-income housing tax credits, distributed through the Louisiana Housing Corp., formerly the Louisiana Housing Finance Agency, said Michelle Pyne, the project manager for the site.
Global Green said the project would have been the first new affordable multifamily rental housing built in the Lower 9th Ward since the neighborhood was swamped by floodwaters and emptied of its residents after Hurricane Katrina in 2005.
The Louisiana Housing Finance Agency board approved the Global Green request in 2009, with a higher price tag. The original proposal was to build 18 units at $500,000 per unit. Following the initial approval, Global Green had to complete a housing study and attempt to gain approval from the Louisiana Bond Commission.
Global Green went before the Louisiana Housing Corp. board last week to ask that it reaffirm its predecessor agency’s decision to allocate 4 percent low-income housing tax credits to the project. The current project has two additional units and a price tag of $266,000 per unit.
Although the housing corporation’s staff recommended approval, the board voted 8-2 against the project.
At an average size of 675 square feet, the cost per square foot of the units is nearly $400, too expensive for taxpayers, Kennedy said.
“We could buy a home in the Country Club of Louisiana (in Baton Rouge) or English Turn in New Orleans cheaper than what they want to spend on a 675-square-foot apartment,” Kennedy said. “That’s just outrageous. That’s not affordable housing.”
Kennedy went on to question why the project needed to be funded by taxpayers at all when the Global Green board includes presumably wealthy celebrities like actors Leonardo DiCaprio and Edward Norton. “This is a vanity project for some Hollywood folks who aren’t putting any money into this thing,” Kennedy said.
Pyne said the board’s cost concern was being applied arbitrarily. A project with a more expensive per-unit cost was approved during the same meeting last week, she noted. Kennedy voted against that one, too.
City Councilwoman Stacy Head said Global Green’s plan to use sustainable building materials, high-efficiency appliances and solar panels merits the high cost relative to other developments.
“I can’t see any rationale for this project not going forward,” Head said. “Certainly building smart and building green might be slightly more expensive than building in a farm field with traditional construction, but we’re building for the future of New Orleans.”
The tax credits were the financial underpinning of the plan, which also includes Community Development Block Grant money and private funding. But without the tax credits, those dollars are unavailable, Pyne said.
“It really stops, if not completely destroys, the momentum in this resilient community,” said James Perry, executive director of the Greater New Orleans Fair Housing Action Center. “It’s key to moving the Lower 9th Ward forward to move this development forward.”
Kennedy said he would be willing to entertain another proposal for the area. He suggested 1,000-square-foot, single-family homes costing $100 to $125 per square foot.
“I agree with Global Green that we need to do more for our neighbors in the Lower 9th Ward,” Kennedy said. “This project is not the way to do it.”