The Future of Homeownership in New Orleans How Do We Keep the Dream Alive for Everyone? Topics The Changing Picture of Homeownership in 2016 The Continuing Importance of Homeownership Solutions for Current Homeowners Creating Opportunities for Aspiring Homeowners Part 1: Homeownership in the 21 st Century Nationwide Trends A snapshot of New Orleans Homeownership in the 21 st Century: Nationwide Trends As of 2015, The National Homeownership Rate is at 1993 Levels Racial Disparities in Homeownership Homeownership rates have dropped, but Housing Prices have Increased Housing prices are increasing, but for the vast majority of Americans, incomes are not. Homeownership rates are down across all age ranges, but most steeply amongst younger demographics Homeownership in the 21 st Century: A Snapshot of New Orleans Change in Population Post-Katrina Snapshot of New Orleans Today Homeownership PercentageTotal PopulationAfrican Americans United States66%49% Louisiana68%53% New Orleans47%43% Adjusted for inflation, median household income is declining in New Orleans and Nationwide The Rising Cost of Housing in New Orleans Uptown New Orleans The price of housing has increased rapidly in some neighborhoods, but flatlined in others New Orleans East The price of housing has increased rapidly in some neighborhoods, but flatlined in others Kenner The price of housing has increased rapidly in some neighborhoods, but flatlined in others Severe Decline in African American Homeownership Since Katrina Part 2: The Continuing Importance of Homeownership Why is Homeownership Still Important in 2016? Challenges faced by tenants Effect of natural disasters on homeowners vs. renters Homeownership as a means of both individual and generational wealth accumulation The Continuing Importance of Homeownership: The Rent is Too Damn High In 2015, CNN ranked New Orleans as the sixth worst city for renters, citing a 9 percent hike in rents and a 1.5 percent income decline since GNOFHAC study revealed that of the more than 62,000 rental properties in New Orleans, nearly 50,000 needed some kind of major repair, while thousands of other properties had mold, water leakage, rodents and other issues. Rent and Income Since 2005 Green Rent and Income both increase Orange Rent increased, income decreased The Rent is Too Damn High More Renters are Cost Burdened (Spend more than 30 percent of their household income on housing) than Homeowners Percentage of Renters Who Are Severely Cost Burdened Severely Cost Burdened: Spending more than 50% of household income on housing Source : The Data Center analysis of U.S. Census Bureau data from American Community Survey 2004 and 2013. Percentage of Homeowners Who Are Severely Cost Burdened Severely Cost Burdened: Spending more than 50% of household income on housing Source : The Data Center analysis of U.S. Census Bureau data from American Community Survey 2004 and 2013. The Continuing Importance of Homeownership: The Impact of Natural Disasters on Homeowners vs. Renters Renters Are More Likely to Be Displaced By A Natural Disaster Low-income families comprise two- thirds of rental households. Rental stock is less likely to be up to code and more likely to be damaged by a natural disasters Landlords have less financial incentive to pursue mitigation measures on rental units to increase resiliency to disasters Renters Are Less Likely to Return After a Natural Disaster Less infrastructure exists to help tenants return after natural disasters Housing costs frequently increase in immediate aftermath of natural disasters Landlords generally take longer to fix rental units, and those on the market may be damaged The Continuing Importance of Homeownership: Homeownership and the Wealth Gap What is Wealth? Net Worth: the difference between the values of assets and liabilities Wealth can be passed from generation to generation Most Americans Biggest Asset: Their Homes Homeownership and Wealth Creation Homeownership long has been central to Americans ability to amass wealth; even with the substantial decline in wealth after the housing bust, the net worth of homeowners over time has significantly outpaced that of renters, who tend as a group to accumulate little if any wealth. New York Times Editorial Board, 11/24/2014 Remember: Racial Disparities in Homeownership Why Does the Wealth Gap Matter? Wealth can be self-perpetuating Ability to build equity Ability to build credit Opportunities for borrowing money Increased capacity to respond to crisis Personal financial crisis Natural Disasters Part 3: Solutions for Current Homeowners Protecting Existing Homeowners Challenges to Homeowners: Increasing flood and hazard insurance premiums Increasing taxes as home values rise Challenges to Homeowners: Flood Insurance Flood Insurance Premiums Limited to 18% increase per year under the Homeowner Flood Insurance Affordability Act of 2014 Average Flood Insurance Premium in 2012 in Orleans Parish was $889.85 Challenges to Homeowners: Hazard Insurance Within Louisiana, Greater New Orleans Has the Highest Insurance Rates Possible Policy Solutions: Tax Relief for Longtime Homeowners Longtime Owner Occupants Programs Philadelphia: homeowners who have lived in a house for 10+ years and whose household income is less than $110,000 annually can cap and freeze assessments for 10 years in certain circumstances Boston: Proposed bill to allow residents who have owned homes for more than ten years and whose property values have increased by ten percent or more to defer property tax payments until sale of home Part 4: Creating Opportunities for Aspiring Homeowners Case Study: Baltimores Vacants to Value Program Streamline the disposition process for city-owned properties. Intensify and streamline code enforcement. Designate and facilitate investment in community development clusters in emerging markets near areas of strength. The city has sold 90 percent of its own properties to private developers in these areas and catalyzed $21.4 million of private investment. Provide homebuyer incentives. In one program, for example, the city has provided $10,000 booster payments to 117 households. Support large-scale redevelopment (including multifamily housing) in distressed areas by clearing areas to become development-ready. Opportunities for Aspiring Homeowners: ASI Federal Credit Union Opportunities for Aspiring Homeowners: Community Land Trusts Opportunities for Aspiring Homeowners: Jericho Housing
