Crisis of Dispossession: How White Capital and Policy Have Intensified Post-Katrina Housing Precarity


In 2019 there seems no end in sight to the movement of unhinged capital into New Orleans real estate. While every city struggles with the racialized displacement of poor people and precarious renters due to outside development, the legacy of redlining, the failure of the federal levees after Hurricane Katrina, and the predatory re-development of the city in the flood’s wake have led to a crisis of displacement, eviction and whitening of New Orleans. City and State housing policies (and lack thereof) have led to the complete commodification of housing— one which favors landlords, speculator investment and backdoor subsidizing of lucrative subleasing schemes. And finally, with the additional element of AirBnB and whole-home short-term rentals (STRs) being introduced in the last half decade, this process has truly gone off the rails. But this is not going unopposed; many are working to expose the eviction crisis, close off AirBnB futures and strategize on how to crash the housing bubble. Additionally, there are ways anyone can participate in the fight to take back homes and land from the market and return them to people.

As anyone paying attention to rental prices, the frequency of remodeling projects and the number of new AirBnBs around their houses can attest to, the displacement of black New Orleanians from their neighborhoods continues to rapidly accelerate. The redevelopment of New Orleans after Katrina and the city’s recent gentrification are largely simultaneous and symbiotic projects. A recent report from a land trust and housing rights advocacy group called the Jane Place Neighborhood Sustainability Initiative (JPNSI) and Davida Finger, a professor at Loyola University College of Law, used data from eviction cases in New Orleans between January of 2015 until July of 2018 to show where evictions are occurring most frequently and the rate at which they are occurring over time.

According to the report, New Orleans renters were evicted at double the national average, with 5.8% percent of renters experiencing an eviction in 2017. This statistic will most likely be higher in 2019 due to the upward trending direction of property value and rental prices. The report also included information on the racial and class make up of those who are evicted, based on the geographic concentration of evictions in low-income Black neighborhoods, and how the historical legacy of racist valuation systems like redlining are showing themselves to be in effect today, especially the way that property has been recuperated post-Katrina.

To get a deeper understanding of how New Orleans went from a de-populated city after Katrina to now facing a massive housing crisis and what local organizing efforts are working to reverse this trend, we interviewed Breonne DeDecker from Jane Place Neighborhood Sustainability Initiative. JPNSI was officially founded in 2008 as a community land trust, but its roots go back to the late 90s in the Mid City Neighborhood. We asked Breonne to help us understand what exactly “redlining” means and how it applies to the current housing situation in New Orleans.

Redlining was a systemic divestment from black communities alongside a systemic investment in white communities and white flight. Not only were a lot of the core neighborhoods that were occupied by black folks systematically divested from before Katrina– like Central City, Treme, Seventh Ward, and Upper Ninth Ward– a lot of those neighborhoods are the same areas that were massively destroyed by the Storm. After Katrina, rebuilding initiatives like the Road Home Program created a racist formula to do recovery funding by paying out settlements based on the appraisal of your home rather than how much it would cost to rebuild your home. And because real estate markets have proven to be racist over generations of home ownership in our country, that meant that a three-bedroom house in Lakeview received larger payouts than a three bedroom house in the Upper Ninth Ward, even if they took the same amount of damage and had the same amount of square footage and needed the same amount of money to repair. This was a denial of resources that left communities very vulnerable to what is occurring now, which is an influx of gentrification capital swooping in and capitalizing on these homes that were twice stolen. The wealth was stolen through redlining in the first place and then stolen again after Katrina when the recovery funding was inequitable. Research is continuing to show, even though it was federally prohibited, redlining is still occurring. The number of mortgages denied for African American families versus white families in New Orleans is shocking, particularly in neighborhoods like the Seventh Ward, which are historically black communities.

Evictions and housing cost burden occur more frequently in neighborhoods that are majority black, like the Lower Ninth Ward, St. Roch, Central City, Hollygrove, Gert Town, and New Orleans East. As the report puts simply, in majority white neighborhoods, between the time the data was collected, 1 in 24 residents experienced an eviction. In majority black neighborhoods, it was 1 in 4. Adding to the precarity of low-income renters are not only extremely unfavorable regulatory laws around tenants rights but an AirBnB frenzy. Breonne further elaborates how AirBnB was able to wedge into the market here:

Gentrification at its core is an economic process. There is this theory that was developed in the seventies and eighties called “the rent gap” that predicts when gentrification is going to occur, based off of analyzing potential economic returns. You can look at the economic returns s of a community and determine where developers are going to go. “The rent gap” is when evicting a current tenant and rehabbing the property will allow you to get more capitalization and a greater return; it’s the moment when the community exits from economic stasis and into the possibility that you will make more money if you sink a million dollars into rehabbing a building than if you just let it sit and have the current tenants paying rent. AirBnB massively, massively inflated the rent gap, because the returns a speculator would get from short-term renting a property are so much higher, and often does not even need the owner to renovate the property. The choice was no longer, “Oh you can rent this house to a local low-income tenant for $600/month and then maybe get a more higher income tenant for $1,000/month,” but, “you can evict this tenant and get $500 per night instead.” It changed the underlying math that landlords and developers were using when thinking about housing. Housing was divorced, even more so, from being a social good. It created this frenzy in some neighborhoods where people were paying $10, 20, 30,000 dollars more than asking price because they know it wasn’t going to be a home they were living in and it wasn’t going to be a rental property, it was going to be an AirBnB and they understood through their math formula that the money was coming.

All gentrifying cities are struggling with the problem of whole-home rentals, which means that a speculator or developer can buy any number of houses with no intention to live in them, instead renting them out as short-term rentals. This means companies like AirBnB mediate that economic interaction between the short-term renter and “homeowner,” which allows the company to sidestep housing regulations.

This process of whole-home/short-term renting leads to rapid loss of housing stock, often in areas where property valuation is quickly rising. However, the relatively cheap housing stock at the beginning of the boom and the massive amounts of tourism money at stake in New Orleans, combined with the failure to bring poor and black New Orleanians home after Katrina, have led to an eviction crisis. This process has culminated in displacing the black social core who built this city and made it into the cultural capital that 17 millions tourists flock to every year. There are now 100,000 fewer black people in New Orleans than there were before Katrina.

The policy path forward for this problem has been much discussed. Recommendations of JPNSI and other housing justice groups focus on the proposed requirement that any short-term rental have a homestead exemption verifying an owner lives on site, theoretically eliminating whole-home rentals and the ability of owners to amass multiple properties they operate essentially as hoteliers. Also proposed is what is called a “One-to-One Match”. For each STR permitted in a building, that building must also “match” and provide one unit of affordable housing. These policies will be voted on in June by the New Orleans City Council. Commenting on the ways in which these recommendations have been received by city council and those “homeowners” who defend AirBnB in New Orleans, Breonne lays out the contradiction in investment and housing:

There’s a lot of policing that occurs on the spending habits of low income people. But we don’t tend to have the same level of policing on the habits of the upper middle class or the wealthy. And there’s a lot of people saying “Oh I spent a lot of money and bought this house and I flipped it and now its an AirBnB and if you ban this I’m gonna lose my investment.” And it’s like, well, real estate shouldn’t be treated as a guaranteed investment. That is not the goal of it. In fact, treating real estate like a guaranteed profit-generating venture is what crashed the global financial markets in 2008, which caused disproportionate harm to Black and Brown communities and helped usher in the housing crisis that cities are grappling with. We shouldn’t be using the state to protect private investments that are actively displacing and dispossessing our community. That is the ultimate argument that we make: this is inherently a predatory and displacement based economy and the city should not be in the interest of protecting these speculators.

Additionally, once the policy around STRs falls into place, there is the work of reporting violations that anyone can and should do. Renters can and should be organizing together to take down AirBnBs and whole-home rentals that threaten affordable housing in their neighborhoods. Regardless of the result of the upcoming May vote in City Council, learning the laws regarding whole-home rentals in historic neighborhoods (banned), curfews, or how many nights a year there can be guests and reporting violations has a track record of actually hurting STR owners financially through instigating fines which can result in AirBnB closures.

The Renter’s Rights Assembly, which meets at 6:00pm on the first Thursday of the month at 2533 Columbus Street, is a new group of tenants, renters and allies formed with the intention of creating mutual aid networks and strategies to pressure elected officials to enact legislation favorable to tenants. At each meeting, free legal aid is provided to any renter who is facing eviction, harassment or seeking litigious options against an absentee or neglectful landlord. In their own words, the RRA is: “a space for tenants, students and houseless individuals to build power and create space for unimaginable solidarity. Via direct action, mutual aid, outreach and education, we hope to transform not only laws and policies, but also shift societal and cultural norms/ expectations around the rights and desires of renters. The right for affordable housing will not just take place in courtrooms and in legislative bodies, but most importantly on the streets.”

Resources built out of assemblage can reveal to us that we are not isolated in our individual transactional situations, and that we can support our neighbors and neighborhoods by creating strong relationships and networks so we can defend one another from eviction as well as put pressure on the city to prioritize housing as a right instead of as a vehicle for profit.

Not everyone has been duped by the myth that housing is a commodity or asset to accumulate value; some still understand housing is shelter, sanctuary, and place in which to build life. Besides countless days in city council and the courts trying to prevent renters from being evicted and stop the cancerous growth of AirBnB on the city, JPNSI is primarily a land trust, which works to create permanent, secure housing that cannot be taken back and flipped by a landlord, bank or the city. In their own words, community land trusts operate by removing land from the market, which permanently removes it from speculation and the amplification machine that housing and land in urban centers often get trapped into – a cycle of ever-escalating worth and ever-escalating pressures on surrounding neighbors and community members. Community land trusts encourage development without displacement, improve the housing stock, improving the amenities of the neighborhood while protecting people from being pushed out from the success of their own communities. Housing created by community land trusts is permanently affordable; it permanently holds space for low- and moderate-income residents.

It is urgent for white transplants (such as the authors of this article) and those with resources outside of the city to understand that there are historical precedents for some of these neighborhoods, such as the 7th, 8th, and 9th Wards, having mixed-race working- and middle-class demographics. However, the segregating forces of redlining and white flight led to an abandonment of these neighborhoods and caused black residents to suffer devaluation and environmental racism. The resilience of black middle-class communities is well documented in New Orleans and worth noting here, but it is important to see this as a part of consistent and predictable American trend, which is the social betrayal by the white working class of black communities whose resources and culture were built and then shared. In this post-Katrina moment, there are myriad reasons why young, often white people would come and move to predominantly black neighborhoods. Almost all of them can either be traced back to the availability of cheap housing due to segregatory and recuperative policies and the liberative possibilities that black New Orleans culture creates and allows for.

If we are to truly reverse the course of white-supremacist displacement and aid the creation of housing stability and opportunity for black natives, it is vital that we not only do the work of organizing and mounting pressure through the channels of policy but by physically putting our bodies in the way of the of landlords, capital and the police who protect both. We must be aware of the resources available to our neighbors facing sudden eviction. We must have tools to combat the rapid expansion of AirBnB, but even prior to that, we must know our neighbors and the local situation we are all in. How many people on your block own their home? How many rent? How many have had to move due to cost burden or eviction in the last three years? How many AirBnBs are there near your home? Are they whole-home rentals, and can it be ascertained if multiple are operated by the same people? The trajectory of post-Katrina New Orleans and American urbanism at large is not predetermined. We can work for harm reduction and push back the insidious tendrils of gentrification. We can organize to create models and futures where the value of property is not forefronted and instead access, livability, and choice are.

“I would really urge people to not isolate,” Breonne says. “Something that I tell myself all the time, is ‘What’s the point of having good politics if you don’t do anything with them?’ That’s been my mantra this year. I do not care if your politics are perfect if you are not actually in the fight. If you’re not in the fight, you’re not my ally.”

The presence of an established land trust guided by people critical of the free market and capitalism’s role in housing, and who are committed to the project of decommodifying land and housing, is an incredible resource. In a city full of non-profits, many of which profited off of the same funding vacuum as developers post-Katrina, and who seem to be standing behind and often accelerating the rabid development of this city, it can be easy to be cynical when thinking about getting involved in a housing-rights struggle. Jane Place and the Renters Rights Assembly, however, can be viewed as steps towards reclaiming the commons and crashing this speculation bubble by taking housing off of the profit driven market and creating permanent territories for the people who built and sustained the spirit of this city.

 

Photos by Annie Eff


The entire Jane Place NSI report can be found here

To search a map about current forms of redlining explore this app!

To learn more about displacement in New Orleans check out displacedneworleans.com

Leave a Reply

Your email address will not be published. Required fields are marked *