New Orleans:Federal Housing, Environmental Policies Clash

NEW ORLEANS – It’s 11 a.m. on a Monday and Bernice Horne is sweeping the front porch. Inside, her son fixes himself a fast lunch—he’s on the clock— while her granddaughter readies for a class at the local community college. “Erica,” she calls. “Grab me a dust pan. We don’t need any more mess around here.”

The view from Horne’s front porch is bleak: a weedy lot; the dark, gutted house of a dead neighbor; and beyond that, a derelict subdivision stretching as far as the eye can see. Occasionally a bird swoops in or out of a broken window. A ripped chain-link fence borders the abandoned affordable-housing development, which never reopened after Hurricane Katrina forced its operator, the Housing Authority of New Orleans (HANO), to close it more than six years ago.

“One day my baby granddaughter was sitting out on the porch swing, and she said, ‘Why does that building have eyes? It looks like it’s looking at us,’ ” Horne, a retired school custodian, says. “I said, ‘Baby, they’re supposed to be windows and doors to keep little girls like you safe.’ “

Horne used a grant supplied by the state to rebuild her tidy ranch-style house from the ground up after Katrina. For reasons both emotional and financial, she never seriously considered not doing so. “We don’t have any other place,” she says quietly. “This is where I raised my children. We can’t afford to go anywhere else.”

Upon her return, she installed a jungle gym in the backyard and, inside, a plush sofa with plenty of room for chatting with the neighbors she expected would return. They haven’t. The population of Horne’s neighborhood, Desire, has dropped 68 percent since 2000, falling from 3,791 to 1,213 in 2010, U.S. Census data show. Where there were once occupied homes, weeds grow. The only commercial establishment for miles is the Money and Honey One Stop, a concrete-fronted corner store with unpredictable hours and an inventory heavy on 99-cent soda and hot potato chips.

Though New Orleans Mayor Mitch Landrieu’s recovery plan includes putting a $11 million community center and health clinic in this Upper 9th Ward neighborhood, the only city project to be completed so far is a modestly outfitted park with a small swimming pool, a few sports fields and a Kaboom playground donated to the neighborhood. On warm fall evenings, the sound of children playing football reverberates through otherwise quiet streets.

“No traffic. Nothing. It’s a ghost town other than the park,” a neighbor, Hardy Price, says. Price is one of four residents on his block. One of the others is his adult son, who lives across the street. The remaining two are renters who moved in next door after the property’s prior owner moved to Texas following Katrina and converted his home into a Section 8 rental.

The weeds were growing high in the Upper 9th Ward long before Landrieu took office—and indeed, even before the hurricane hit. For more than a decade before that disaster, a quieter one was unfolding, one that caused residents of the nearly 100 percent black, largely low-income community to live alongside a potentially lethal legacy of federal policy decisions. In the case of Horne’s neighborhood, the decisions were spectacular failures. Her house, as well as the abandoned HANO development she sees from her front porch and the public elementary school where she worked and her grandchildren studied, were built atop a 95-acre municipal dump.

Despite its devastation, the Upper 9th Ward has received far less attention than the Lower 9th, which sits several miles to the southeast, across the Industrial Canal, where a levee failure during Katrina sent 20 feet of floodwater surging into the neighborhood.

At a town hall meeting in September, residents begged Landrieu to invest in their neighborhood. “We have not a medical center, nothing for our senior citizens. We have a bus that goes nowhere. We need you, Mr. Mayor,” one resident exhorted Landrieu. “When you were running for your seat, you didn’t have to ask us. We stood by you. But now you done forgot about us.” A booming round of applause punctuated the woman’s comments.

Shrinking Cities , Big Worries

Welcome to the new normal—where entire swaths of city neighborhoods deteriorate behind fences and no one is too surprised when a child invents a story to explain why so many buildings in her community are vacant. The circumstances that brought New Orleans’ neighborhoods into their current limbo are a combination of singular events and larger national trends. Many communities around the country currently confront similar fates. For evidence, look to the urban prairies of Detroit; Youngstown, Ohio; and Flint, Mich. In the case of New Orleans, the storm immediately preceding abandonment was Katrina. In these other cities, it was the slower winds of economic and political change, the foreclosure crisis, decades of urban population loss, spending cuts, and federal policy changes. Now cities must decide how to proceed: continue to maintain support for communities built with earlier generations of public support or simply disinvest?

“We are paying a big price for decades of bad decisions at local, state and federal levels,” says Dan Kildee, president and co-founder of the Center for American Progress, a national nonprofit that focuses on urban revitalization. “We are paying the price of decades without a vision.”

Obama is the first president to admit loud and clear that new strategies must be followed in communities like Desire, where there are houses and no one to fill them or fix them. Unlike prior administrations that have changed individual programs and hinted at a broader need to reshape the way the federal government supports urban development, Obama’s secretary of Housing and Urban Development, Shaun Donovan, has said from Day One that the agency’s entire approach must be transformed to take into account changing economic and environmental considerations as well as new geography of poverty that has populations once concentrated in cities dispersed across ever sprawling suburban regions.

Indeed, the New Orleans housing officials who made the decision to build affordable housing on a landfill in the Desire neighborhood were not acting in a vacuum. Rather, they built in line with the theory that many argue guided urban development across the country throughout the 20th century—the notion that the health of cities depends on sustained growth, particularly in the area of housing, America’s favorite economic indicator.

“For generations in America, we have measured success by the number of housing units we are able to construct,” says Kildee.

Kildee has a point. When politicians want to prove the economy is robust, they cite the number of housing starts. When they want to demonstrate a community is healthy, they cite home values. Implicit in that is an assumption that populations will keep pace with the market and that the new housing will be absorbed. It is that assumption that Desire and hundreds of other similarly abandoned communities are now proving catastrophically wrong.

Obama is trying to reverse that legacy with HUD’s Sustainable Communities initiative—which takes a cross-agency approach to build more cohesive, connected regions wherein transit development coordinates with housing development and job growth—and the Choice Neighborhoods program for transforming isolated public housing developments into integrated, mixed-income neighborhoods.

But those changes are taking place in a context of drastically reduced federal support for cities and housing. The current federal spending package includes an 8 percent cut to the capital fund for public housing—a reduction that could have grave implications for already overburdened housing authorities. In New Orleans’ 9th Ward alone, the city’s housing authority has at least a half-dozen abandoned or partly abandoned complexes, including the Press Park subdivision visible from Horne’s porch.

Adding to the challenge: a nearly 40 percent slashing this year of the agency’s largest affordable-housing block grant program—HOME, which provides municipalities with grant dollars to be used exclusively for the purpose of providing affordable housing or direct rental assistance. A smaller but still sizable 6 percent reduction hit the agency’s most flexible community redevelopment grant tool, the Community Development Block Grant program. CDBG grants provide the funding for the sort of neighborhood-level intervention needed on the messy blocks surrounding Horne in Desire.

“Every local housing authority is going to be picking up the pieces and absolutely funding only its highest-priority communities,” says Linda Couch, a senior policy analyst at the National Low Income Housing Coalition.

But as budget cuts and political pressures force cities to take this triage approach, what happens to those neighborhoods that wind up on the wrong side of the red line?

Homeownership in Harm’s Way

If New Orleans is the city care forgot, Desire is the neighborhood care ignored. Built on drained swampland northwest of the Industrial Canal, the neighborhood grew up alongside a dump where refuse was burned in open pits from 1909 until 1948, when neighbors’ complaints about thick, putrid smoke forced legislation banning dumps inside the city. Instead of ceasing to dump in the neighborhood, though, city officials circumvented the legislation by converting the dump into a landfill. Burying the refuse would be more sanitary, they argued. The Agriculture Street Landfill persisted until 1965, when it was last used as an emergency dump for debris produced by Hurricane Betsy.

Soon after the landfill closed, the local housing authority began eying the unused city land for affordable housing. In 1969 the first of two federally financed developments, Press Park, rose atop the landfill. Though project engineers worried about subsidence on the former dump, politics outweighed any environmental concerns. In a freshly integrated city where much of the housing available to black families was substandard, the idea of building a modern housing development from the ground up—even if that ground might be contaminated—appealed to the city’s leadership. No remediation was done.

The Housing Authority of New Orleans began to aggressively market Press Park’s new, affordable townhouses to striving black families, instituting programs that allowed low-income public housing residents to become homeowners. A second project, Gordon Plaza, sprang up on the former landfill’s eastern edge in the late 1970s. Containing rentals, housing for senior citizens and affordable single-family homes, the development was, like Press Park, paid for with federal grant and loan money.

The strategy reflected the modus operandi of the city at the time: build more and build cheap. Over several decades, the strategy transformed previously undeveloped, drained swampland in the 9th Ward and farther east—areas now synonymous with Katrina’s devastation—into an area dense with federally subsidized affordable housing, populated overwhelmingly by black families.

Following the rooftops, the Orleans Parish School Board had a construction spree in the area. The school board constructed one school, Moton Elementary, on the edge of the Agriculture Street Landfill. Even before the school opened in 1985, school officials contemplated abandoning it because of elevated lead levels in the site’s soil. Again, pressure for a ribbon cutting won out. The school opened. By the time of the 1990 census, about 1,000 people lived on the landfill or along its immediate periphery.

“We moved there because the schools were down the street,” Horne, who bought her privately developed home on the eastern flank of the landfill in 1983, says. “The children didn’t have to cross a lot of traffic. They could walk to school.” But while the population continued to grow, so did concerns about the area’s environmental safety. People were finding stray landfill debris in their yards. The EPA, which according to legal documents had found evidence of contamination as early as 1986, came down again in 1993 to do testing, which found higher than allowed levels of lead, arsenic and polychlorinated aromatic hydrocarbons. Moton, located across the street from Press Park, closed in 1994 because of elevated lead levels, and Horne’s granddaughter Erica, then a first-grader at the school, tested positive for lead poisoning.

“Around that time, we stopped growing vegetables in our garden because we were worried about what was in the soil,” Gordon Plaza homeowner Ruth Parker says.

Legal Limbo

That same year, the EPA recognized the 95-acre Agriculture Street Landfill as a Superfund hazardous-waste site. Though many homeowners urged EPA officials to buy their homes and clear the land, the EPA decided on a cheaper fix: removing contaminated soil and replacing it with clean clay atop a fabric liner. The soil remediation cost $42.8 million and took nine years, wrapping up in 2003. The site still hasn’t been removed from the federal register of Superfund sites, despite agency officials’ taking steps to do so.

Still bouncing through the federal appeals system is the class action filed in 1993 on behalf of residents, homeowners and students who unknowingly bought homes, rented apartments or attended school on top of the landfill. After more than a decade in the courts, only a portion of residents included in the class of affected plaintiffs have received settlements, despite a 2006 ruling in their favor by Civil District Court Judge Nadine Ramsey, who declared the neighborhood “uninhabitable” and “dangerous.”

“If this was another kind of neighborhood, we wouldn’t have to fight so hard,” Horne, a plaintiff in the lawsuit, says. “It’s like we don’t exist, like we keep having to tell the courts and the city and everyone that we are still here. That’s what it feels like.”

In November an inspection of the landfill site done by EPA officials mentioned a resurgence of illegal dumping at the site. Plaintiffs in the class action say they hope for an eventual settlement that will allow them to move elsewhere. Parker bought her Gordon Plaza home in 1981 for $40,000. Thirty years later, its assessed value is $45,000. She and her husband are retired. Both have cancer. “The settlement is our only hope,” Parker says. “No one is going to buy these houses, knowing what is back here.”

Last year, a nonpracticing Houston attorney named Robert Spencer bought the largest vacant Gordon Plaza building for $1 from HUD. The property’s previous owner, Desire Community Housing, had defaulted on a HUD loan, leaving the federal agency to foreclose on the 2.6-acre property and auction it off. Spencer, who has said that redeveloping the complex would be his largest project to date, was the only bidder. He has made little progress on the site since buying it in May, neighbors say. Despite loud complaints from these nearby residents, Spencer has filed no permits for the demolition of the blighted fire hazard.

Meanwhile, HANO maintains that it can’t demolish Press Park until it buys out 67 private townhouse owners in the 237-unit authority development. It can’t do that until the courts decide on the class action, officials say.

Neighbors impatiently await the wrecking ball. It’s not hard to see why. Walk in through breaches in its chain-link border and you will find apartments with moldy, water-damaged pictures on the walls and toys on the floor, crusted in six years’ worth of dirt. Water from leaking sewer and water pipes pools in the overgrowth, leaving the faint aroma of a septic tank. At community meetings, residents blame HANO for failing to take cleanup action that could inspire private owners like Spencer to get moving.

Still Investing in Disaster

Further complicating matters is the fact that the federal government continues to invest in Press Park and the struggling blocks that surround it. Since Katrina, HUD has sent about $9.4 million in Road Home hurricane recovery grants to property owners in the 1,137-housing-unit census block that includes the 170-unit development, Louisiana Office of Community Development records show. On a warm Tuesday in October, one of those grant recipients, John Spears, climbed through an opening he cut in the development’s fence and showed a reporter the townhouse-style condo he restored using a $70,000 Road Home small-rental-program grant from the state community development office. Buckets of white paint and Spackle littered the otherwise empty three-bedroom unit.

In an upstairs room, a brand-new plastic-framed window looked out over the development’s deserted, trash-strewn inner courtyard. If you forgot about Katrina, it looked like the set of a dystopian horror movie about some kind of deadly pathogen hitting a low-end suburb.

To receive the first $46,000 in grant money the state—which administers federal Road Home funding—awarded Spears for completing the affordable-housing rehab, he had to show the unit to an inspector, he said. “The inspector said, ‘I don’t see anything else around here. Why would you redo it?’ ” Spears recalled, tapping his foot on a glossy adobe-colored floor tile. The question, however on point, didn’t stop the landlord from receiving his grant money or a certificate of occupancy from the city. Now he is waiting for a tenant to agree to move in so he can receive the final $24,000 installment of the grant allocation. He’s shown the place to a few Section 8 voucher holders but no one has taken up the lease, he said.

“I’m hoping HANO will fix the rest of this mess up so someone will actually want to live here,” he said. “Otherwise, they can buy me out and tear it down. I’ll give them this, and they can give me a new unit somewhere else.”

The HUD-appointed administrative receiver who runs HANO, David Gilmore, acknowledges that he has met with Spears but declines to talk about his specific situation. “We’re trying to buy everyone out,” he says.

Gilmore says that while FEMA will eventually pay for the demolition of the Katrina-battered complex, redevelopment is years off.

“I don’t have any plans at the moment. That doesn’t mean there won’t be,” says Gilmore, a bureaucrat imported from Washington to clean up and modernize the long-troubled housing authority, which was put under federal receivership in 2002.

A New Model for Housing

Developing Press Park into anything other than an open field will be tricky. Federal regulations prohibit using HUD housing grants on Superfund sites, meaning that HANO will have to transfer the property to a private owner if it wants to see housing developed there. Beyond that, the notion of rebuilding a neighborhood on a landfill in a far-off section of the city with few public services contradicts the essence of Obama’s holistic, cross-agency Sustainable Communities agenda.

“That was developed in a different time,” Gilmore says. “I am not sure if I would’ve ever built there in the first place.”

For HANO, the rethinking of federal housing policy coincided with its own controversial transformation. After Katrina, the agency never reopened its four largest traditional public housing complexes, instead initiating HOPE VI transformations—turning traditional public housing into smaller, mixed-income communities operated by private developers. The projects, which housing officials expect to complete in the next two years, reflect HUD’s reorientation toward mixed-income, mixed-use communities located in urban cores and connected to public services. One of them, Harmony Oaks in Central City, features wraparound tenant services in a new community center. A cross-city greenway has been incorporated into the design of another one of the developments, Faubourg Lafitte. The master plan for a third, Columbia Parc, includes a revenue-generating golf course.

But while residents are publicly enthusiastic about amenities in the new developments, their shrunken size and mixed-income portfolio mean many of the neediest pre- Katrina tenants remain locked out of the modern offerings. Before Katrina, HANO had 5,100 occupied housingdevelopment units and 8,500 vouchers, for a total of 13,600 units. HANO now plans to provide 22,500 households with assistance, but nearly 80 percent of families will receive the housing subsidy in the form of a Section 8 voucher, according to the agency’s 2012 budget. The number living in traditional public housing will have fallen 20 percent.

Again following federal policy trends, HANO has traded thousands of public housing units for a market-based voucher system that it hopes will encourage people to move into privately owned units and help deconcentrate poverty. The agency does not specifically track whether or not such a deconcentration is occurring, making it tough if not impossible to evaluate the policy’s success. Available data suggest the policy implementation still has a way to go: A 2010 analysis of census-tract-level data shows that most of the houses that are approved for voucher usage are located in low-income neighborhoods within close proximity to the former housing projects.

In addition to the tens of millions of dollars going to rebuild developments shuttered after Katrina, HANO last year took on another high-profile project: the redevelopment of Iberville, the city’s last major traditional public housing development—and the only one located in touristy downtown New Orleans.

HUD selected Iberville as one of five developments to receive federal support through Choice Neighborhoods. The reinvention into a mixed-use, mixed-income neighborhood will cost upwards of $600 million over the next decade of planning and construction, $30 million of which will come from the Choice grant.

Situated on the fringe of the French Quarter in the Treme, Iberville is by far the authority’s most valuable property, with enormous potential for private investment. The new development reflects that potential. Only a third of the new development’s 913 units will be public housing, with an additional 305 set aside for households earning 50 to 60 percent of the city’s $37,726 median income and the final third reserved for those able to afford market-rate units in the desirable downtown neighborhood. The housing authority has set aside a chunk of the site for commercial development that the agency hopes will bring national department stores and grocers to the area. Unlike the HOPE VI grants that paid for earlier public housing reinventions, Choice requires oneto- one replacement of all public housing units. Accordingly, HANO will build 517 replacement units off site.

A successful transformation of Iberville carries huge political potential for the city’s leadership as well as Obama, who has highlighted the community in speeches about the power of Choice Neighborhoods to reinvent American cities. Unlike the Press Park section of Desire, which is separated from New Orleans’ downtown core by railroad tracks, a smoggy stretch of industrial businesses and the interstate, Iberville can’t be ignored.

“The Treme community plays a vital role in the city’s heritage and cultural identity,” Landrieu said in a press release put out when HUD announced New Orleans would receive the Choice award. “This grant provides us with an essential tool to transform lives and revitalize one of the greatest neighborhoods in the country.”

Gilmore admits that even if Press Park were his top priority, it would not qualify for the same federal support as an Iberville. “It just would not satisfy the vast array of issues Choice Neighborhoods takes into account,” he says.

Winners and Losers

Ninth Ward councilman Jon Johnson was mad. It was Day 10 of the city council’s hearings on the 2012 budget, and the only clear message he was hearing seemed to be that his district, which encompasses a large swath of the city’s northeastern neighborhoods, including the most storm-devastated areas, was not going to see much help in the coming year. As the director of the city’s Regional Transit Authority explained that population losses in the 9th Ward would mean fewer buses, Johnson turned to an aide and spoke quietly for a moment. As soon the authority’s presentation ended, Johnson turned back to his microphone. “We have to stop dumping all of our resources in the core of the city,” he told the crowded council chambers. “We have communities out here that are struggling to hold on while downtown, things are getting built, things are improving. It is simply not right.”

Kildee, a Democrat who has announced he will run this year for a U.S. House seat in his hometown of Flint, Mich., has made a name for himself as a leader in the burgeoning “shrinking cities” movement. Kildee’s mission is to align the size of a city with its population, creating smaller cities where resources and services can be better targeted. A consultant to municipalities around the country, Kildee has advised the New Orleans Redevelopment Authority and stationed an outpost for his organization’s Vacant Properties Campaign in the city.

Kildee acknowledges that Johnson is right: There will be losers.

“I would love to live in a world where the federal government could provide enough resources to do it all at once, but until that day comes, someone has to make hard choices,” he says. “We know for certain that the old way of spreading money around is not working. But it does keep me up at night, worrying about those communities who may not benefit.”