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Sparked by concerns about an entire city block of luxury short-term rentals under construction in Central City on a site that was supposed to be developed as affordable housing, the City Council on Thursday adopted two measures designed to prevent such situations from happening in the future.
The measures, sponsored by District B Council member Lesli Harris, came in response to a report earlier in the week about a plan to develop affordable housing on the site of the former Brown’s Dairy. That plan fell through, and the original developers subsequently sold the land in several parcels to other developers, who are now building dozens of four- and five-bedroom townhouses to be marketed as short-term rentals.
Harris’ measures wouldn’t affect the current project on the former Brown’s Dairy site, which would be grandfathered in. But it would prevent future projects in the area.
The first measure would make zoning changes to disallow any future short-term rental projects at the Brown’s Dairy site and a section of the surrounding neighborhood bounded be the Pontchartrain Expressway and South Saratoga, Felicity and Carondelet streets.
The other measure would create citywide standards for affordable homeownership. Most affordable housing developments are apartment complexes that target renters. Housing advocates say a missing piece of the puzzle has been programs that make it easier to develop single- and two-family homes that low- and moderate-income buyers can afford.
Both measures, approved unanimously by the council, must still be approved by the city Planning Commission.
“We lament that one of the horses has left the barn,” said Housing NOLA Executive Director Andreanecia Morris, who has been pushing for such changes for more than a year. “This, at least, closes the barn door and keeps other horses from escaping.”
Tools for the toolbox
Harris said she also has been working on policy changes that would make it easier for developers to build affordable housing for homeownership. She was planning to introduce something more comprehensive earlier this year, she said, but decided to act now after learning about the Brown’s Dairy project.
Her first measure would make several changes to the city’s zoning code, creating standards and regulations to guide affordable housing development.
The lack of support from the city is why the Brown’s Dairy project, originally pitched to the council in 2020, fell through, according to that development team, 1400 Baronne, LLC.
The team — Peter Aamodt, David Hecht, Michael Meredith, Emerson Gibbs and Mike Sherman — planned to build 53 two-family homes that would target buyers earning $65,000 a year or less and would enable them to generate income by living on one side of a house and renting out the other.
But, as they explained to the council at the time, they needed ways to either lower their development costs or help homebuyers pay their notes — or both. They requested a zoning change to allow for smaller lot sizes, which would allow them to build more houses on a site and, thereby, make more money. But that rezoning never happened.
Harris blames her predecessor, former District B Council member Jay Banksfor its failure. Banks has said he cannot comment on the project except to say he is disappointed it fell through.
“I know they asked to change the required lot size and Jay Banks denied that,” Harris said. “They could have made it work with more density.”
The developers also suggested giving homeowners a break on their property taxes or providing them with mortgage payment assistance. But while the city applauded their concept, no assistance ever materialized, though it’s not clear how hard the developers pushed.
Again, 1400 Baronne declines to address specifics of what went wrong. But Morris said if the changes Harris suggested are approved by city Planning Commission, it will create standards, allow for lower density, and address some of the issues that derailed 1400 Baronne’s plans.
“We have been talking about this for a long time,” she said. “It’s a shame it wasn’t a priority until it became a crisis.”
Uber to the French Quarter
After 1400 Baronne’s plans fell through, the developers sold the land in several chunks to different developers and builders. More than half are now owned by brothers Daniel and Frank Glaser, who operate short-term rentals around the country through their platform Heirloom/Stayloom, which is an upscale Airbnb.
Harris’ second motion will ban short-term rentals in the neighborhood, which is one of the few historic areas in the city that currently allows short term rentals.
Commercial real estate experts have said because the area is zoned to allow for commercial use and was formerly an industrial site, with no existing housing, the former dairy site is ideal for short-term rental units—especially larger homes that are in high demand and short supply.
But housing advocates, who supported Harris’ measures Thursday, said a neighborhood of short-term rentals will not benefit Central City.
“Research shows that short-term rental guests in Black and Brown neighborhoods do not spend money,” said Maxwell Ciardullo of the Louisiana Fair Housing Action center. “They just Uber to the French Quarter.”
The Glasers did not resond to a request for comment.
Mayor LaToya Cantrell’s administration said it supports both measures.
“We have been consistently expanding land use options for affordable housing … and see this as a logical next step that builds on our existing for-rent affordability incentives,” the mayor’s office said in a prepared statement.
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