What could New Orleans do with an extra $147 million?
Build 2,000 new affordable homes, essentially end homelessness in the city, fund development programs for opportunity youth, subsidize bus and streetcar fares, expand violence intervention services — and more, a group of nonprofit organizations told the City Council on Tuesday (April 4).
The city should spend some of the millions of dollars in federal pandemic aid sitting in city coffers on these investments, which are aimed at easing the structural problems at the root of the city’s struggle with violence and crime, community advocates said at a Tuesday budget meeting.
“When we’re having conversations in New Orleans about what provides public safety and what creates public safety, it is these types of investments,” said Will Snowden, director of the Vera Institute of Justice’s New Orleans office, who presented the spending plan along with representatives from the Louisiana Fair Housing Action Center and the New Orleans Workers’ Center for Racial Justice.
The advocates’ plan would direct $107 million to affordable housing initiatives, $20 million to youth development programming, $2 million to community violence prevention and $18 million to “community equity” efforts such as supporting food banks and building a pilot program to make public transit fares free for riders.
The ambitious spending plan draws upon both the American Rescue Plan Act, or ARPA, dollars and the swell of unspent surpluses sitting in the city’s fund balance. Their presentation is part of the public process this spring to figure out how to use those one-time funds, including what’s left of the $388 million in ARPA money received by the city — most of which remains virtually untouched.
The plan is a chance for local leaders to align city funding with their stated values, especially when it comes to affordable housing, said Maxwell Ciardullo with the Louisiana Fair Housing Action Center.
The advocates say the $15 million they want the city to direct toward homelessness reduction initiatives would house the more than 400 people currently believed to be living on the streets. The plan would also direct $70 million for new development that could generate up to 2,000 additional permanently affordable units across low-poverty and gentrifying neighborhoods, along with $20 million toward forgivable loans for small landlords and low-income homeowners to repair health and safety violations and $2 million in one-time funds to support renters displaced by health and safety violations.
New Orleans is falling behind its peers, given that other cities across the South have already doled out dollars for affordable housing, Ciardullo said. Closer to home, Baton Rouge, which received $165 million in COVID-19 aid, has allocated spending toward gun violence reduction strategies, a modest number of planned affordable housing units, neighborhood revitalization and youth employment programs.
Councilmembers dug into specifics of some of the proposals. How would the city ensure that so-called “slumlords” wouldn’t take advantage of a rental repair program for small landlords, Councilmember Lesli Harris asked. Could making city buses free help with the “fraught” busing situation for New Orleans charter school students, as Councilmember JP Morrell put it.
Councilmember Joe Giarrusso raised another potential use for the money not mentioned in the advocates’ proposal: mortgage assistance for first-time homebuyers. “That’s another piece we’ve got to be looking at,” Giarrusso said.
Travis Hills, who lives at the homeless shelter on Gravier Street, gave a public comment to councilmembers following the presentation: “From everything I hear, it sounds good,” Hill said. “Just show me the money.”
The city has until the end of 2024 to decide how to use its leftover pandemic aid and the end of 2026 to actually spend it. The city technically used nearly all of its first round of ARPA dollars, totalling $194 million, to shore up departments amid anticipated revenue shortfalls in 2021 and 2022. However, due to higher-than-expected tax revenues and lower-than-expected expenses, it was able to save about the same amount and put the money in its reserve fund, which had grown to about $300 million by the beginning of this year. Of the second $194 million ARPA round, about $100 million has yet to be allocated.
The U.S. Treasury, which administers the funds, has encouraged local and state governments to spend the money on affordable housing, though governments can use their ARPA funds across four categories: replacing lost revenue, responding to public health and other pandemic impacts, offering premium pay for essential workers, and bulking up water, ewer and broadband infrastructure.
Here’s a breakdown of the groups’ suggested spending plan for New Orleans:
- Housing: $70 million to build new affordable housing units, with another $37 million directed toward homelessness reduction initiatives ($15 million), forgivable loans for small landlords and low-income homeowners to repair health and safety violations ($20 million) and one-time funds to support renters displaced by health and safety violations ($2 million).
- Youth development: $20 million to support the Children Youth and Planning Board and fund programs for opportunity youth.
- Community violence prevention: $2 million to bolster the budget of the Office of Gun Violence Prevention.
- Community equity: $18 million across initiatives including a pilot program to make public transit free for riders ($5 million), cash assistance for some essential workers ($5.2 million) aiding food banks and expanding access to food assistance ($5 million), expanding the Office of Resilience and Sustainability ($2 million), an audit of contractor and subcontractors to ensure compliance with city labor laws ($500,000) and translation services for assorted city materials and City Council hearings ($500,000).
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