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Blight in New Orleans Part I: Structure & Strategy

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Blight in New Orleans Part I: Structure & Strategy A Report from the Bureau of Governmental Research MENDING THE URBAN FABRIC Blight in New Orleans Part I: Structure & Strategy FEBRUARY 2008 MENDING THE URBAN FABRIC BGR Review Committee BGR Board of Directors Henry O’Connor, Jr., Chairman Arnold B. Baker James B. Barkate Officers Virginia Besthoff Christian T. Brown Lynes R. Sloss, Chairman Pamela M. Bryan LaToya W. Cantrell Hans B. Jonassen, Vice Chairman Joan Coulter Hans B. Jonassen Robert W. Brown, Secretary Mark A. Mayer Carolyn W. McLellan Sterling Scott Willis, Treasurer Lynes R. Sloss Board Members Herschel L. Abbott, Jr. BGR Project Staff Conrad A. Appel III Robert C. Baird, Jr. Janet R. Howard, President Arnold B. Baker C. Davin Boldissar, Principal Author James B. Barkate Peter Reichard, Production Manager Virginia Besthoff Ralph O. Brennan Christian T. Brown BGR Pamela M. Bryan LaToya W. Cantrell Joan Coulter The Bureau of Governmental Research is a private, non- J. Kelly Duncan profit, independent research organization dedicated to Ludovico Feoli informed public policy making and the effective use of Hardy B. Fowler public resources for the improvement of government in Aimee Adatto Freeman the New Orleans metropolitan area. Julie Livaudais George Roy A. Glapion This report is available on BGR’s web site, www.bgr.org. Matthew P. LeCorgne Mark A. Mayer Carolyn W. McLellan Henry O’Connor, Jr. William A. Oliver Thomas A. Oreck Gregory St. Etienne Madeline D. West Andrew B. Wisdom Honorary Board Bryan Bell Harry J. Blumenthal, Jr. Edgar L. Chase III Louis M. Freeman Richard W. Freeman, Jr. Ronald J. French David Guidry Paul M. Haygood Diana M. Lewis Anne M. Milling R. King Milling George H. Porter III Edward F. Stauss, Jr. Bureau of Governmental Research 938 Lafayette St., Suite 200 Photos by C. Davin Boldissar New Orleans, Louisiana 70113 MENDING THE URBAN FABRIC T A B L E O F C O N T E N T S INTRODUCTION 1 OVERVIEW OF CHALLENGES 1 PROGRAM STRUCTURE 2 Current Structure 2 Fragmentation Creates Problems 4 Consolidating Blight Management 4 Controls on NORA 5 Code Enforcement: A Citywide Function 5 Coordination 6 GOALS AND STRATEGIES 6 Goals 6 A Comprehensive Citywide Strategy 6 Different Areas, Different Strategies 7 New Orleans’ Strategy 8 CONCLUSION AND RECOMMENDATIONS 8 Program Structure 8 Goals and Strategies 9 MENDING THE URBAN FABRIC INTRODUCTION OVERVIEW OF CHALLENGES ew Orleans has for decades suffered from New Orleans faces multiple structural, legal and admin- pervasive blight. Hurricane Katrina and the istrative problems in addressing blight. They include the resulting levee failures exacerbated this following: problem. No one has conducted a compre- N n hensive survey to determine the number of Fragmented Structure. The administration of blighted properties. However, federal agencies have esti- blighted property programs in New Orleans is mated that approximately 80,000 housing units were fragmented and uncoordinated. severely damaged by Hurricane Katrina. It is safe to say that there are tens of thousands of blighted properties in n Inadequate Goals and Strategies. Local govern- the city.1 ment has not articulated comprehensive and realis- tic goals and strategies for redeveloping blighted Blight poses a serious impediment to the city’s recovery. property. Blighted properties destabilize neighborhoods, depress property values and subject neighbors to health and safe- n Funding Deficiencies. Blighted property programs ty hazards. Blight deters investment and increases the in New Orleans lack sufficient funding to address likelihood that neighboring properties will also decline blight effectively. and become blighted. In post-Katrina New Orleans, it discourages residents from restoring flood-damaged n Poor Information. Poor record keeping and a lack homes. Blight also represents lost tax revenue potential of access to basic property information impede in a city with troubled finances. redevelopment. Local government plays a key role in fostering blighted n Acquisition Hurdles. Numerous problems with property redevelopment. It is uniquely positioned to acquisition processes prevent redevelopment. acquire blighted properties and encourage their redevel- opment, because of its powers, access to funding and manpower. METHODOLOGY BGR conducted interviews with numerous profes- Unfortunately, New Orleans’ blighted property programs sionals, including: have historically been ineffective. In the five years before Katrina, the City of New Orleans and the New Orleans n Staff of local government programs in New Redevelopment Authority (NORA), the entity charged Orleans and other cities5 with blight remediation in the city, acquired and redevel- oped only a few hundred properties annually.2 Post- n Urban planning and land use experts6 Katrina, the only tangible sign of redevelopment has been the transfer of approximately 600 blighted and tax- n For-profit and non-profit developers, attorneys adjudicated properties by NORA and the City to develop- and observers of the real estate market in New ers.3 Orleans BGR has previously made preliminary observations BGR reviewed reports and academic papers regard- ing blighted property programs and redevelopment, regarding the City’s blighted property programs. These including reports on New Orleans and the cities list- observations appear in December 2007 letters sent to ed below. BGR reviewed numerous documents and NORA and the City’s Office of Recovery Management materials it obtained from NORA and the City. (ORM).4 This study builds on BGR’s initial observa- tions, discussing the obstacles to blight remediation and In addition to New Orleans’ programs, BGR’s research proposed solutions in greater detail. focused on seven widely discussed programs: Philadelphia, Pittsburgh, Cleveland, Louisville, BGR uses the terms “blight” and “blighted” to refer to Richmond, Genesee County (containing Flint, Mich.) severely dilapidated or damaged properties, regardless of and Baltimore. whether such properties have been formally designated as “blighted” under a local government process. BGR also conducted physical surveys of hundreds of properties that NORA acquired.7 MENDING THE URBAN FABRIC BGR 1 n Disposition Procedures. The procedures for trans- ferring properties to individuals and developers are PROPERTY ACQUISITION PROCEDURES arbitrary, opaque and uncompetitive. Local government in New Orleans has four pipelines n Poor Maintenance and Cleanup. NORA has histor- for acquiring blighted property: ically not cleaned up and maintained the blighted property under its control. Road Home Transfers. The State of Louisiana plans to transfer to local government bodies residential n Involuntary Demolitions. Involuntary demolitions, properties that it purchases through the Road Home as currently administered, endanger blighted struc- program. NORA is the designated recipient for the tures that should be saved and returned to com- thousands of Road Home properties in New Orleans. merce. Expropriation. Expropriation (also called eminent There is no single “silver bullet” that will solve these domain) is a basic power of government to take pri- problems. Instead, policymakers must roll up their vate property for certain purposes authorized by sleeves and comprehensively address a multitude of law, in exchange for compensation. The City and issues. NORA both have the power to expropriate blighted property, although NORA’s powers are narrower. Due to the complexity and scope of the issues, we are Expropriation has been severely limited by 2006 addressing them in a two-part report. In this, the first part amendments to the Louisiana Constitution.8 of that report, we address the first two issues listed above: program structure and goals and strategies. In the Tax Adjudication. The City Finance Department second part, we will address funding and technical and periodically offers tax delinquent properties for sale procedural issues relating to property acquisition, main- to the public. Successful purchasers receive title in tenance, disposition and demolition. exchange for payment of back taxes plus costs and interest.9 The City holds properties that do not sell; in legal terminology, these properties are “adjudicat- PROGRAM STRUCTURE ed” to the City. In many cases, these properties are blighted. Local government has a number of tools available to address blight. It can actively enforce codes, encourage Lien Foreclosure. The City, through code enforce- rehabilitation through incentives, demolish properties ment proceedings, can impose fines and liens on that pose threats to safety and in some cases force the sale property that is in violation of public health, housing, of properties. Often, however, the government must fire code, environmental or historic district ordi- nances. The City can then foreclose on the lien, forc- acquire blighted properties for ultimate resale or conver- 10 sion to public use. ing a sale of the property by the Civil Sheriff. The Sheriff sells the property to the highest bidder, which New Orleans’ blighted property programs, like those in could be a private party, NORA or the City. The pro- other cities, focus mainly on the acquisition, maintenance cedure has not been successfully tested. and disposition of properties. In New Orleans, govern- ment can acquire blighted properties through expropria- tion, tax adjudication and foreclosure on liens created NORA. NORA is an independent authority created in through code enforcement proceedings (blight liens). The 1968 for the purpose of “eliminat[ing] and prevent[ing] Road Home program
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