New Orleans is in the midst of an escalating housing dilemma that reflects challenges faced by cities nationwide. The city is grappling with a shrinking pool of affordable housing options alongside a rise in living costs. Compounding these issues are local factors such as the surge in short-term rentals, soaring insurance rates prompted by frequent hurricanes, and persistently low wages in essential sectors, all of which negatively impact the housing landscape. A recent report highlights that the New Orleans area requires as many as 44,000 additional affordable rental units to adequately cater to its residents, with much of this necessity felt within the city limits. However, according to HousingNOLA’s 2024 housing report card published last month, only 239 new units were developed in the previous year to address this shortfall.
In an effort to combat this affordable housing crisis, a ballot initiative has been proposed to establish a Housing Trust Fund aimed at allocating financial resources to bolster the availability of affordable housing. Importantly, this measure would refrain from imposing new taxes on citizens. Advocates view the creation of the Housing Trust Fund as a significant stride towards effectively tackling the affordable housing issue, which has worsened in recent times. Conversely, some critics, including the Bureau of Governmental Research, have expressed concerns that amending the city charter to establish this trust could impose overly rigid constraints.
The future of this measure now lies in the hands of voters. If approved, the Housing Trust Fund would earmark 2% of the city’s general fund annually for initiatives focused on affordable housing, which could involve both the preservation of existing units and the development of new ones, as well as programs to support affordable homeownership. Preliminary estimates from the Bureau of Governmental Research suggest that this allocation could amount to approximately $17 million during the first budget year of 2026 when the funding requirement is expected to take effect.
Councilmember Lesli Harris, a proponent of the initiative, explained that the proposed 2% fund is intended to align with the typical federal funding the city receives each year. Under the terms of the proposed charter amendment, any funds allocated from the Housing Trust Fund would not count towards the federal funding, thereby securing additional financial resources. “This would be a comparable amount to what we bring in through federal grants annually,” Harris stated, emphasizing that these funds would be free from the same stringent regulations found in federal programs.
When discussing potential uses for the funding, Harris outlined various projects: allocating $2.5 million for strengthening roofs on over 200 homes, which could indirectly lead to lower insurance costs and increased safety during storms; investing $1 million into enhancing over 100 rental units to comply with the Healthy Homes ordinance; and providing $5 million in gap financing to developers needing assistance with multi-family housing loans. Monique Blossom, a policy advocate at the Louisiana Fair Housing Action Center, noted that while the necessary funding figure seems daunting, the intention is not to construct a large-scale apartment building but rather to facilitate smaller projects that help developers complete their initiatives successfully.
If the Housing Trust Fund gains voter approval, it will be overseen by Finance New Orleans, the city’s established housing and development agency, alongside the New Orleans Redevelopment Authority. Additionally, a seven-member advisory board, appointed by the Mayor’s Office, City Council, and local affordable housing organizations, will oversee the distribution of the funds. By ordinance, focuses such as the preservation of current affordable units, the creation of new housing, and promotion of affordable homeownership will each receive a guaranteed minimum of 15% of the total Trust Fund, with the advisory board deciding how to allocate the remaining 55% based on urgent needs.
Transparency in spending is another hallmark of the proposed initiative, with plans to implement a public dashboard to monitor expenditures and involve the community through quarterly meetings. “This creates an opportunity for public engagement regarding the allocation of these funds, allowing for questions and discussions,” Harris noted.
The initiative has found favor among local housing justice advocates, who argue that it could significantly aid affordable housing initiatives within the city. Blossom emphasized that New Orleans has historically struggled to maintain affordability for its workforce and has relied heavily on federal funding to sustain housing efforts. However, a local good governance organization has raised alarms regarding the ballot measure, cautioning that its rigid structure could hinder future budget adaptability.
The Bureau for Governmental Research has advised residents against supporting the charter amendment, claiming that it would create obligations difficult to modify or reverse. They argue for a more flexible approach through an ordinance that could be adjusted by the City Council instead. Despite these critiques, the proponents of the Housing Trust Fund continue to advocate for its potential, drawing parallels with other cities that have established similar funds through charter amendments. Harris firmly stated, “The focus on housing must transcend political whims; it absolutely must be a priority.”