The Myth of New Orleans’s Affordability

Cities with “cheap” housing aren’t cheap if most wages are relatively low.

New Orleans's Calliope housing projects in 2006, prior to demolition (Lee Celano / Reuters)

In popular (and pricey) cities such as New York and San Francisco, the idea of outrageous rental prices is easy to grasp. These are the places that birth urban legends about awful housing situations: Three people living in a 400-square-foot studio, or a friend of a friend who’s paying $1,800 for a room that is, technically speaking, a closet. But dangerously high rent isn’t about just sticker price—it’s about price in relation to income. And that’s a problem in cities all over the U.S., even those that might seem cheap by comparison.

The New Orleans metro area is one such example. There, according to a rent index compiled by the housing website Zillow, a one-bedroom apartment costs around $1,400—far less than in the astronomically priced San Francisco Bay Area, where similar units go for more than $3,000. Even though New Orleans’s prices might seem more reasonable by comparison, they can still be quite burdensome: More than 35 percent of the city’s residents spend 50 percent or more of their salaries on rent. (That's significantly more than the national average, which is about 25 percent.)

These imbalances make more sense when the state of the local economy is taken into consideration. In New Orleans, unemployment is about 6.3 percent, which is higher than the national average, and average weekly wages are about $980, which is lower than the national average. Louisiana is also one of only five states with no minimum wage law on the books. For workers there, wages automatically default to the federal minimum of $7.25, a number that hasn’t changed since 2009. That helps explain why comparably low rental prices can be so onerous, and why the city’s poverty rate is so high, with around 27 percent of the population living in poverty in 2013, compared with only 16 percent nationally.

When it comes to the rental market, New Orleans, like many cities, has an issue with supply, with many people vying for a small number of available, affordable units. But unlike many cities, New Orleans is also still recovering from the catastrophic hurricane a decade ago, which ravaged most of its housing stock. But because most of the city’s rental market is made up of single-family homes rather than large apartment buildings, the benefits of rebuilding efforts have been mostly distributed to homeowners, not renters.

There are other reasons renters’ lives are difficult, too. Some cite the lack of public housing: Soon after Katrina, the city tore down four out of 10 low-income housing projects in hopes of rehabilitating the public-housing system in the city, despite the fact that the existing buildings were salvageable. The rebuilding that has taken place since has largely yielded mixed-income neighborhoods with single-family homes rather than the larger multi-family structures that stood before. Supporters argue that many of the units in the city’s housing projects were vacant anyway, and that new, mixed-income neighborhoods give families a shot at living in areas with less concentrated poverty—a factor that has been proven to have a positive impact on low-income families. But critics say that the teardown exacerbated the rental problem, reducing the number of units available to the poorest residents and that the slow rebuild has prolonged the displacement of many residents.

The legacy of housing discrimination throughout New Orleans and its neighboring parishes plays a role too. According to Monika Gerhart-Hambrick, the policy director for the Greater New Orleans Fair Housing Action Center, that discrimination ranges from individual biases—for example, an owner who refuses to rent to minority applicants—to systemic government policies. In St. Bernard parish, a blood-ordinance law enacted after Katrina prohibited owners in the majority-white community from renting their homes to anyone who wasn’t a blood relative without a special permit.

Sixty percent of New Orleanians are black, and an undue portion of housing woes fall onto black renters. “There has been pressure applied to lower income renters, who are overwhelmingly African American, and they’re really being moved and forced into rentals that are most likely to have issues of deferred maintenance, including a large percentage of rentals with really significant health and safety issues,” Gerhart-Hambrick says.

The problem isn’t just the lack of units, it’s the lack of units that are safe, clean, and generally livable.  “Across the board—whether it’s in public housing, whether we’re looking at Section 8 properties, or whether we’re looking at properties on the private rental market, the lack of a comprehensive plan to rebuild or rehab rentals created tremendous competition, and therefore pressure on the market for the rentals that remained,” according to Gerhart-Hambrick. “In a competitive market, lower-income renters are therefore more often pushed to substandard rentals, and the city lacks an enforcement mechanism for health and safety standards for rentals.”

Factoring in all of the problems facing renters in New Orleans, it becomes clear that even at relatively low prices, finding a safe, affordable place to live can still be remarkably challenging.