The New Orleans City Planning Commission on Tuesday (May 9) voted in favor of adopting a city program to offer incentives for developers building new affordable homes for sale to lower-income buyers.

The commission voted 5-1 to make the incentives available to developers who set aside some of their units for homebuyers making up to 120% of the median area income. 

The recommendation, if adopted and codified into city law by the City Council, represents a modest expansion of the city’s existing “inclusionary zoning” policy, which now only applies to rental units. The proposal advanced to the council on Tuesday — drafted by City Planning Commission staff — adds a homeownership element. But unlike the rental program, which mandates affordable set-asides in certain neighborhoods, participation in the homeownership program would be purely voluntary, though the commission could consider a mandatory component after further study of the issue.

“This is … a baby step of us getting to a broader policy,” said Kelly Butler, the city’s inclusionary zoning administrator.

Under the proposal, developers building fewer than 10 units must set aside one affordable unit to access the incentives, which could include reductions in required parking spaces and density bonuses; developers building 10 or more homes must set aside at least 10% of those units. The affordable units would be restricted to homeowners under the income requirement — about $94,000 for a family of four, under 2022 guidelines — for a five-year period, according to the proposed rules

Under the proposed rules, the city’s zoning administration, under the Department of Safety and Permits, would ensure compliance from developers who make use of the incentives. 

The initial inclusionary zoning policy, which was approved by the City Council in 2019 and took effect two years later, required developers building rental units in the city’s most expensive neighborhoods to price up to 10% of those units for lower-income renters. Developers building apartments elsewhere in the city could still take advantage of incentives.

The council directed the commission earlier this year to look at expanding the zoning regulations by adding a homeownership component. The commission was also to consider employing a “community land trust” model, where homeowners purchase a house while leasing the land on which it sits from a local nonprofit. 

That was rejected in the proposal considered Tuesday. Commission staff said they spoke with the city’s two community land trusts — one of which currently doesn’t offer homeownership opportunities — and decided that having a land trust partner with developers at this point would severely limit where new homes could be built.

According to commission staff, a market feasibility study is currently in the works to see if the city’s mandatory inclusionary zoning boundaries require an update, and to assess how to include affordable homeownership in the mandatory program.

At the Tuesday meeting, speakers from two affordable housing groups spoke in favor of the changes; no speakers opposed.

“This is for developers who want to do the right thing,” Maxwell Ciardullo with the Louisiana Fair Housing Action Center told commissioners.

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Michelle previously worked for The Associated Press in South Carolina and was an inaugural corps member with the Report for America initiative. She also covered statewide criminal justice issues for Mississippi...