Institute for Economic Development and Real Estate Research
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Institute for Economic Development and Real Estate Research March 14, 2011 Mr. David Bowman Director of Research and Special Projects Disaster Recovery Unit, Office of Community Development Post Office Box 94095 Baton Rouge, LA 70804‐9095 Dear Mr. Bowman, We are pleased to deliver our final report focusing on market trends and conditions in the New Orleans region. This is final report, where appropriate and possible, incorporates suggestions based on comments received from those who reviewed the draft version of the document. We have enjoyed working with you on this challenging assignment and look forward to hearing from you if you have any questions or if we can be of further assistance. Sincerely, Ivan J. Miestchovich, Jr., Ph.D. Director and Associate Professor of Finance 413 Kirschman Hall 2000 Lakeshore Drive New Orleans, LA 70148 504.280.1408 Fax: 504.280.3952 A Member of the Louisiana State University System Committed to Equal Opportunity Table of Contents Executive Summary: Overview of Current Market Conditions .............................................................. 7 Forward: Overview and Methodology ................................................................................................ 11 Purpose ................................................................................................................................................... 11 Affordable Housing Needs versus Housing Demand .............................................................................. 11 Sources .................................................................................................................................................... 13 Limitations of the Report ........................................................................................................................ 15 History of the Rental Market in New Orleans Metropolitan Area ....................................................... 16 Graph 1: Apartment Occupancy and Permit History .......................................................................... 16 Pre‐1970’s ............................................................................................................................................... 17 Table 1: Profile of Renter Occupied Housing ...................................................................................... 17 Table 2: Age of Structure, Renter Occupied Housing ......................................................................... 18 Table 3: Units in Structure and Age of Structure ................................................................................ 18 The 1970’s ............................................................................................................................................... 19 The 1980’s ............................................................................................................................................... 20 The 1990’s and Beyond ........................................................................................................................... 21 Table 4: Average Occupancy New Orleans Metropolitan Area, 1974 to 2010 ................................... 23 Table 5: Housing Production and Wage and Salary Employment History by Decade ........................ 24 Residential Construction, 2003 – 2010 ............................................................................................... 25 Single Family New Construction ............................................................................................................. 25 Table 6: Residential Building Permits: Single Family Housing, 2000 ‐ November 2010 ..................... 28 Multi‐Family New Construction .............................................................................................................. 28 Table 7: Residential Building Permits: Multi‐Family Housing, 2000 ‐ November 2010 ...................... 29 Apartment Occupancy Trends: 2004 – 2010 ...................................................................................... 31 Occupancy Trends: Market Rate Units ................................................................................................... 31 Table 8: Household Estimates for New Orleans Metro Area .............................................................. 35 Table 9: Apartment Occupancy Summary, 2004 ‐ 2010 ..................................................................... 37 Table 10: Apartment Occupancy Summary of Units Reporting Occupancy Each Survey Period, 2004 ‐ 2010 .................................................................................................................................................... 38 Occupancy Trends: Age and Size of Property ......................................................................................... 39 New Orleans Market Assessment – An Analysis of Supply and Demand Dynamics 1 Table 11: Market Rate Apartment Occupancy by Complex Size by Area, 2010 ................................. 40 Table 12: Market Rate Apartment Occupancy by Age by Parish, 2010 .............................................. 40 Occupancy Trends: Mixed Income Property ........................................................................................... 41 Table 13: New Orleans Mixed Income Properties: Occupancy Summary – Total Units, 2010 ........... 41 Table 14: New Orleans Mixed Income Properties: Occupancy and Rent Summary – Market Rate Units, 2010 .......................................................................................................................................... 41 Table 15: New Orleans Mixed Income Properties: Occupancy Summary – Rent Assisted Units, 2010 ............................................................................................................................................................ 42 Apartment Rent Trends: 2004 – 2010 ................................................................................................ 43 Rent Trends: Market Rate Units ............................................................................................................. 43 Table 16: Apartment Rent Summary, 2004 ‐ 2010 ............................................................................. 45 Graph 2: New Orleans Metro Rent Trends, 2004 ‐ 2010 .................................................................... 45 Table 17: Apartment Rent Summary of Units Reporting Occupancy Each Survey Period, 2004 ‐ 2010 .................................................................................................................................................... 46 Graph 3: Apartment Occupancy and Rent Trends, 1973 ‐ 2010 ......................................................... 46 Rent Trends: Mixed Income Property ..................................................................................................... 47 Table 18: New Orleans Mixed Income Properties Market Rate Rent Summary, 2010 ...................... 48 Rent Trends: Subsidized Housing ............................................................................................................ 49 Table 19: 2010 Rent Limits ‐ Income Categories (inclusive of utilities) .............................................. 49 Table 20: Multi‐Family Development Units Renting or Under Construction, by Income Range and Unit Type, New Orleans ...................................................................................................................... 49 Table 21: Multi‐Family Units Renting or Under Construction, by Income Range and Unit Type, New Orleans Metro Area ............................................................................................................................ 50 Profile of Subsidized Rental Housing .................................................................................................. 51 Table 22: Descriptive Profile of Rental Assistance Programs ............................................................. 52 Table 23: Income Distribution by Tenure in New Orleans .................................................................. 53 Graph 4: Cost of Renting, 2004 vs. 2009 ............................................................................................. 54 Low Income Housing Tax Credit (LIHTC) Properties ............................................................................... 54 Table 24: Subsidized Multi‐Family Development Units Post‐Katrina ................................................. 55 Table 25: LIHTC/Piggyback/LHFA New Orleans Pipeline by Planning District .................................... 55 Table 26: Mixed Finance Developments (non‐Public Housing) .......................................................... 56 Table 27: Mixed Income Public Housing Redevelopment .................................................................. 57 Table 28: Mixed Finance Developments Placed in Service ................................................................. 58 New Orleans Market Assessment – An Analysis of Supply and Demand Dynamics 2 Public Housing Communities .................................................................................................................. 58 Table 29: Public Housing Status Report – New Developments .......................................................... 58 Tenant‐based Section 8 Vouchers .......................................................................................................... 59 Table 30: Tenant‐based Vouchers by Planning District, 2010 ...........................................................