Dive Brief:
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New Orleans city officials are considering a proposal that would require developers to include a percentage of affordable housing units in their projects as the city struggles to bridge its housing affordability gap, according to The Times-Picayune, citing a new study from the City Planning Commission.
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Under the plan, developers would be required to earmark 12% of units for low-income tenants on projects with 10 or more units that are located in key neighborhoods, including the city’s downtown.
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The Smart Housing Mix program would loosen density rules, reduce parking requirements and afford tax breaks for developers to help manage the addition of affordable units. The affordability requirement is proposed for 50 to 99 years.
Dive Insight:
New Orleans' widening affordability gap comes as developers there have largely focused on the higher-end of the housing market, fueling inventory shortages on the lower end, while home prices trend higher across the board.
The focus on development in the upper tiers of the market was underlined earlier this month as developer and real estate investment firm The Domain Companies unveiled plans for a $100 million, 29-story residential tower in the city’s mixed-used South Market District. It joins other buildings that have recently risen in or are planned for the district, including The Standard, an $80 million luxury condo building for which financing was recently secured.
Meanwhile, a proposal to redevelop a former grocery store near the city’s downtown into a 211-unit apartment building got the green light this month from the City Planning Commission and is now awaiting approval by the City Council, the Uptown Messenger reported.
Many cities in the U.S. are facing a critical shortage of affordable housing as home prices continue to rise on the back of strong demand and limited inventory, especially at the lower end of the market.
Rising home prices, along with lot and labor shortages, helped to push housing affordability to its lowest level in eight years during the fourth quarter of 2016, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index.
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