Owen Courreges: Build more housing, bigger or smaller, and build a stronger New Orleans

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Owen Courrèges

Owen Courrèges

Housing costs have been rising to unsustainable levels in New Orleans as the market struggles to increase supply to satisfy the demand. Alas, not everyone is sanguine about the ways in which demand is being met.

First, there is infill development, i.e., building housing on vacant lots in existing neighborhoods. However, in the most popular New Orleans neighborhoods, opportunities for development are scarce and developers are starting to build on smaller, irregular lots.

For example, in the 3100 block of St. Thomas Street in the Irish Channel, construction is being completed of a house on an 880-square-foot lot.

Alas, architect Jonathan Tate has faced opposition from neighbors regarding the project.

“The lot on St. Thomas ‘wasn’t worthy of a house’ is what the neighbors said,” Tate told Uptown Messenger.

Neighbors worry about increased density causing congestion and view tiny houses on small lots as aesthetic blight. At the base of it all, they also worry about their property values. Meanwhile, developers just want to meet rising demand for housing and make a buck in the process.

“We’re trying to provide an alternative option for someone with a price point that doesn’t exist in this part of the city,” Tate explained.

Other examples of this phenomenon are cropping up. Construction of a new house is underway at 4621 Chestnut Street, and the house will only be 12 feet wide. In that case, a technical zoning violation was subsequently discovered (one that the city previously missed), and a stop work order was issued.

At the ensuing Board of Zoning Adjustments (BZA) hearing, busybody neighbors came out in force to kvetch about the development.

“The neighbors are vehemently opposed to this project,” neighbor Susan Drogin proclaimed before the BZA. “We do not want it deferred. We want it denied.”

Ultimately approval was granted, but the process unnecessarily delayed construction, resulting in some weather damage to the property.

Elsewhere in the city, the demand for more housing is being met by building higher, but the city’s strict height restrictions have proven to be an impediment. Over at The Lens, columnist Matt Gatzman notes that at least six major development projects have requested height wavers in the last year alone.

The greatest push for taller buildings seems to be in the CBD/Warehouse District and along the riverfront. Although some waivers have been issued, they face an uphill battle.

Neighborhood groups, predictably, are ardently opposed to any loosening of height restrictions. In late May, the Faubourg Marigny Improvement Association (FMIA) filed a lawsuit challenging the city’s new zoning ordinance, which contained an overlay district that would permit new structures a 25-foot “height bonus” under certain specified conditions.

The FMIA cites the Master Plan, which repeatedly states that development must respect the “scale” and “character” of historic neighborhoods.

This is the same reasoning cited by neighbors who get upset about tiny houses going in on irregular lots. It conflates the language of preservation with the idea that any new development essentially can’t increase neighborhood density.

The problem with this reasoning, of course, is that it doesn’t allow the real estate market to respond to demand. This results in artificially higher housing costs for everyone.

Artificially high housing costs can have negative aggregate effects. Following the end of the housing bubble in the late 2000’s and the ensuing national recession, the federal government created the Financial Crisis Inquiry Commission (FCIC) to determine the causes of the crisis.

When the FCIC issued its report in 2011, three members of the panel released a minority opinion that argued, in part, that local land use controls were a contributing factor in the financial crisis:

“In some areas, local zoning rules and other land use restrictions, as well as natural barriers to building, made it hard to build new houses to meet increased demand resulting from population growth,” the opinion stated. “When supply is constrained and demand increases, prices go up.”

New Orleans also has other reasons to ease development restrictions. Greater densification tends to be occurring in neighborhoods that didn’t flood, increasing the city’s stock of housing above sea-level.

None of this is to say that development has to be entirely unrestricted. We don’t need to allow high-rise buildings in the middle of residential neighborhoods or outhouse-sized homes, but we need to allow denser development in high-demand areas.

Small, irregular lots in historic neighborhoods are opportune locations for housing and the city shouldn’t allow neighbors to slow (or even stop) the progress of infill development. Likewise, the city shouldn’t back down from its plans to allow taller development along the riverfront.

Neighbors opposing greater density can’t see past their own narrow, selfish interests. The market needs to be allowed to meet housing demand; those standing in opposition should not be given a soapbox.

Owen Courrèges, a New Orleans attorney and resident of the Garden District, offers his opinions for UptownMessenger.com on Mondays. He has previously written for the Reason Public Policy Foundation.

26 thoughts on “Owen Courreges: Build more housing, bigger or smaller, and build a stronger New Orleans

  1. Owen,

    You had me until the last paragraph:

    “Neighbors opposing greater density can’t see past their own narrow,
    selfish interests. The market needs to be allowed to meet housing
    demand; those standing in opposition should not be given a soapbox.”

    Shutting down those in opposition does not make for a better community. What I believe is needed is better facilitation between neighbors and developers.

    • Moses,

      My point is that neighbors are getting a voice that they don’t deserve. All of these laws are derogations from private property rights; thus, if a developer is complying with existing law, then I don’t think neighbors deserve a government-issued soapbox to hold up a particular development. Likewise, there should be safeguards to protect a developer that has gone through proper channels and, through no fault of their own, has violated some technical zoning rule. Neighbors shouldn’t be able to exploit that and get to delay construction, as well as the benefit of a forum to complain about issues of no legal importance.

      Likewise, I don’t support frivolous lawsuits aimed at overturning parts of the zoning ordinance passed by the council and approved by the mayor. That’s an undeserved soapbox as well.

      The facilitation model is something I don’t support either. This is generally a zero-sum game. Neighbors won’t accept houses on small lots. They won’t accept buildings taller than what standard zoning will allow. Getting them to talk to each other won’t help when neighbors come to the council with pronouncements like: “We do not want it deferred. We want it denied.” Really, where is there to go with that? What discussions can happen? Neighbors simply need to be told that it isn’t their property and they don’t have a say beyond the narrow confines of the law.

  2. Owen, in a democratic society, everyone needs a voice, whether or not it utters sensible opposition to others’ dreams.

    I do feel that we, as a city, have not aggressively encouraged infill with houses that can be sold in the $70-90K range–and those 1000 sq ft lots can hold 800 sq ft cottages.

    The per capita income of our population over the age of 16 requires our attention in planning and building quality “starter” houses that are affordable to working people in a $25-30K income bracket.

    Homeownership is the backbone of a community.

    • ultimateliberal,

      We aren’t just a democratic society; we’re a *liberal* democratic society. People have the right to own and manage their own property within the confines of the law. If neighbors think that all development should be some holistic endeavor where they get an equal say in what other property owners do, I think they need to be told: “No, your opinion doesn’t matter here, and you’re selfishly holding up the construction of more affordable housing. You insufferable jackass, you.”

      As you note, we need more infill development and more affordable housing. Small homes on small lots can help accomplish that, as can taller development in select areas. However, the more self-indulgent denizens of New Orleans often see any development as being the enemy. They consider themselves good, tolerant liberals, but then proceed to wet themselves at the very prospect of change when it comes to new housing and greater density.

      I’m with you with regard to housing, but I think we need a stronger hand when dealing with neighbors and neighborhood organizations. I’m not worried about sparing their feelings; they need to be delivered a forceful “no.”

      • “…selfishly holding up the construction of more affordable housing. You insufferable jackass, you.” I like that! But still, in this country, thank the God you worship–if you believe in a God– that we still have the right to say what ails us, and to be heard. It’s OK to be a pompous ass in public, and it’s OK to shout him/her down in the name of justice.

        • ultimateliberal,

          I didn’t intend to malign anybody’s right to free speech; I was really trying to address the use of hearings, legal technicalities, lawsuits, etc., to voice this opposition and (sometimes) get concrete results.

        • Ultimateliberal – No one here is saying people can’t voice opposition.

          The issue is clogging and delaying someone’s free and legal right to construction. Complain and oppose all you want, write letters, get to the editorial board, but to delay and restrict the building while within existing legal law… THAT’S the issue.

    • Deux,

      It is, but in the end the line is really a practical one. If you can’t accommodate the basic features of a house to make it meet code, it’s too small. Beyond that, I hesitate to regulate. If somebody can live in a veritable shoe box and wants to do so for affordability reasons, let them.

      • We’ve already covered this ground when it comes to mobile homes. FHA will not finance a mobile home smaller than 400SF. You could live in less theoretically (Henry David Thoreau’s cabin was only 150SF).

        However, to accommodate a sanitary kitchen and a bathroom with hot running water you’d probably need about 300SF, and most Americans agree it makes sense to require these things for a basic standard of living and hygiene.

      • Also worth noting that other kinds of living arrangements are more space-efficient and can reduce the space needed per person. New Orleanians already do this to some extent by getting roommates, but you could also legalize boarding-houses and other kinds of housing where certain amenities are communal.

    • When you see the size of some studio apartments, both rentals and condos, you have to wonder what’s “too small.” An Army officer gets (got when I was one) 600 sq ft. in the Bachelor Officers’ Quarters. In NYC, $1900/mo will get you a 200 sq ft studio.

      In my opinion, everyone deserves outdoor space, whether for a car or play space for kids. On a 25×40 ft lot (1000 sq ft), one can easily build a 12×30 house with two stories: liv/kit on first floor, 2 brs, ba on second floor. 720 sq ft with three closets, storage, four 10×12 rooms. The house can be built for less than $70K, and is expandable so that two more 10×12 rooms can be built as an el into the driveway side at the rear.

  3. Owen,

    I usually enjoy reading your commentaries, but I think you
    are overlooking a few things in this one.

    First, many of these “busybody” neighbors are people who
    invested in areas like St. Thomas Street in the Irish Channel when it wasn’t so hip or safe to move there. Even the 4600
    block of Chestnut St was not so great not that long ago. Thanks
    to these people these neighborhoods are doing very well today. It seems to me the city should be doing what it can to help these people protect their investment from Johnny Come Latelys that want to now change the rules and laws to fit their desires.

    The people that wish to build on these small lots are the
    ones who are changing the law. Having a house like this on a block clearly affects all houses on the block and not in a positive way. It is the equivalent allow someone to permanently put a FEMA trailer in their yard. Is this really fair to the people who have already invested on these neighborhoods?

    Matt Gatznman with the lens wrote an outstaying article explaining
    how developers and neighbors worked together for a few years to come up with reasonable zoning laws. Those laws are now in place. Unfortunately, we have greedy developers and individuals who think that they are special and that these laws should not apply to them. If
    you are politically connected you can get waivers, exceptions, and even the laws changed. This is known as corruption. You left out a number of points that Gatznman made. Below is the link to the story. Are zoning laws actual laws or are they only suggestions?

    Finally, I am tired of hearing that there is no affordable in
    Orleans Parish. There are numerous houses available that are nice and affordable in Gentilly, Algiers and New Orleans East. This mentality that we have to cram everyone into 1/3 of the city while we let the other 2/3 of the city rot is completely idiotic. People
    Uptown and in other parts of the “Sliver by the River” need to come out of their little bubble and realize that their efforts to cram everyone into a very small area of the city are only taking away from the rest of the city. The reality is that until these areas rebound
    the entire city will continue to struggle to pay for police, street repairs, infrastructure, and other needs.

    These small homes that are being constructed are going to
    sell for $150,000 to $200,000. These are the kind of buyers that own at least one car, so let’s not bring up any bull that they have to have public transportation. They could easily buy a larger home in a nice Gentilly neighborhood.

    http://thelensnola.org/2015/02/03/yet-another-cbd-developer-seeks-to-deviate-from-the-zoning-code/

    • Michael J,

      We do part company quite starkly here. First of all, I don’t think the government should be in the business of trying to protect peoples’ property values. It shouldn’t obviously prevent public nuisances that arise from conflicting land uses, and in a city such as New Orleans there is an enforceable interest in historic preservation. However, as far as maintaining density and preventing infill development goes, it’s unjustified.

      In any event, these homes on small lots are being legally constructed. You would have to change the law to stop them, not to enable them. And I think greater density is positive for the city as a whole regardless of whether neighbors see it that way. We’ve seen time and time again how neighbors would often prefer blight and disuse to a property being utilized in way that they disapprove of. That addled thinking holds the city back and is partly responsible for our excessive housing costs and poor economic climate.

      I also think you’re wrong about there being affordable housing in Orleans Parish. With the exception of a New Orleans East and the Lower Ninth, it’s all been creeping up in price. And any new development takes pressure off the market.

      • Until today (12 Aug) when the new zoning takes effect there was a minimum lot size and contiguous lots that did not meet it and were owned by the same person any time since 1970 were required to meet it or seek a variance. So houses attempting to be built on lots smaller than the minimum lot size that were in contiguous ownership with adjacent lots any time since the 1970 zoning code was enacted were indeed breaking the zoning law (contiguous lots below minimum lot size owned by the same person loose the right of one house per lot UNDER THE LAW) That is why they needed to seek a variance (in some cases lately after the fact) and that is why the neighbors got a soap box. — Under new zoning the minimum lot sizes are reduced further but it is not clear to me if the rules on contiguously owned non conforming lots losing the right to build a house remain. — another observation that has nothing to do with density is that housing costs seem to have risen due to the new highest and best use in town of illegal short term rentals, bypassing the normal costs associated with running a business – including any zoning rules prohibiting them – they have replaced long term rentals in many areas because they are so much more lucrative to the owner.

    • With every investment comes a certain level of risk……….that’s the way of the world, my friend. Buy low, sell high……….

      And I disagree with your opinion of “affordability.” A house selling at a price over $80K is NOT affordable to half the population of this city………and they are the ones who can least afford to rent, which, in the minds of reasonable people, is a guaranteed method of throwing one’s meager earnings at the wealthy landlords/slumlords.

      • If the risk becomes too great, people will stop investing. This is what occurred in the 70’s and 80’s and people moved out of the city in big numbers. It is very encouraging to see many people with money investing in New Orleans today. I would suggest don’t blow it this time. You mentioned “$80,000”. The people developing these “tiny houses” plan to sell them for around $200,000. That’s less than most houses are selling for in the area, but still somewhat expensive. They are not selling them for $80K. You cannot even build these homes for that much and that is not taking into consideration the cost of the land, which could be $80K for a small section of land, and the profit that these developers plan to make. (The average lot in the Irish Channel is 30 x 120 and selling from $175,000 to $200,000.) The areas in Orleans Parish where you can still find a decent size, livable house in the other half of the city. The Advocate had the price increases on the front page of their paper yesterday. While prices have somewhat increased in Gentilly, this area is still affordable. Meanwhile, prices have decreased since 2005 in New Orleans East and remained about the same in Algiers. I will repeat what I said above, attempting to cram everyone into the “Sliver by the River” while the rest of the city rots is idiotic and will never make a strong New Orleans.

        • There are thousands of lots in other areas, as you so noted, which sell for less than $30,000, or can be subdivided so that three basic houses can be built for $75K each. The problem, as I see it, is greed………sellers of lots, builders, and sellers of new homes.

          As to the Sliver by the River, have you checked our flood insurance rates lately? I paid $325 for a house that has an 18 inch crawl space.

          Did the city flood during Katrina?

  4. Are these tiny homes going to look out of character (and ugly) in the neighborhood? Probably. Are tiny homes going to become long-term residences? Probably not. Eventually, the owner would sell it and buy a bigger home that has more space. This higher sale frequency and somewhat lower price tag increases the likelihood of a landlord purchasing the house to rent out. I do not see the residents or the neighbors ever being happy about these transient homes. In a highly regulated real estate environment with no chance of decreased regulation, we can at least hope that the regulations produce desirable results. I doubt the neighbors will be given a special exemption to build 20 foot tall fences to block the sight of these homes, so it would make more sense to zone them commercial or add them to the adjacent lots.

    There is plenty of cheap housing and land in New Orleans East and the Ninth Ward, waiting to be colonized and civilized by bold, well-armed adventurers.

  5. Turlet,

    There’s nothing unusual or wrong about buying a starter home and eventually getting something bigger. That has nothing to do with whether building new housing lowers housing costs by increasing supply. We need more small homes, probably as much if not more than we need larger ones. And having a house as a rental lowers prices on the rental market.

    Finally, neighbors don’t like living next to rentals or starter homes because they don’t have permanent neighbors, they can frankly go screw themselves. The government shouldn’t be in the business of protecting their fear of new people.

    And telling people to live in bad neighborhoods is crass. People are more likely just to forego the city entirely if that’s the choice that’s forced on them.

    • A supply increase is fine as long as we are building quality over quantity. These tiny houses would be great in Tokyo, but most Americans expect a quality home to have decent square footage and yards.

      I’m not sure if these homes qualify as “starter” homes. Perhaps some do since they seem to be multilevel. Screw the neighbors would be a fine sentiment if the neighbors were equally unrestricted by the rules of building height (and whatever other rules were bent), but that is not the case. We should all play by the same rules. Building something is better than nothing, but I can imagine a smaller version of Singleton’s, or some little shop selling necessities like milk, eggs, and snowballs.

      Those “bad” neighborhoods I mentioned are only bad because of the people currently living in them, and we have people alive today who can remember when those were good or at least decent neighborhoods. Several “bad” neighborhoods have been “gentrified” since Katrina. This is a better way to increase the housing supply.

  6. There’s a lot of eyesores on Canal St. which could be developed. Urban Farms are useless and are taking up an increasing amount of space.

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