Author: partnerssoutheast_sk82om

Originally published by The Advocate

Louisiana landlords with rental houses walloped by 2005’s Hurricanes Katrina and Rita were eventually promised state help to rebuild: If they could get loans to rehab their properties, the state government would later reimburse them. 

This program was touted as key to reviving New Orleans’ rental market. But not long after it got going, the 2008 financial crisis intervened. Banks simply wouldn’t extend construction financing to those landlords, even with the state’s repayment pledge.  

It was a major wake-up call for those running the state’s “small rental” rebuilding program in 2008 and 2009. And although the country’s financial climate has improved, the lessons learned after Katrina continue to guide Louisiana leaders as they again look to help landlords rebuild after a disaster, this time the 2016 floods. Baton Rouge saw 12,643 rental properties swamped last August, while 28,000 rentals statewide flooded.

State officials say working with banks and landlords has become a major emphasis of Restore Louisiana’s programs to help rebuild rentals. Three banks — Investar Bank, Home Bank and Woodforest National Bank — are already on board, all agreeing to extend financing to landlords who are successful applicants to the state’s programs.

The state is offering two large-scale programs. One is focused on neighborhood landlords who own a few rental properties, and the other is geared toward big apartment complexes. Whether the financial help is considered a loan or a grant depends on the applicant, and some of the loans are fully forgivable. In East Baton Rouge Parish, the city-parish government is also offering one small program for landlords who own just a few rentals.

In order to apply for the state money, though, landlords need to have a bank willing to agree to extend construction financing to them. They can use one that has agreed to partner, or ask other banks if they are willing to participate as well. The programs will be run by the Louisiana Housing Corporation, which is another shift from contractor-run Road Home program.  

In devising the strategy to help rebuild rentals hit by the 2016 floods, state Office of Community Development Executive Director Pat Forbes said it was important to tackle the root of the problem by increasing available housing, rather than by spending money on helping renters.

“The reason we’ve gone this route is that before the floods, we already had a terrible shortage of affordable rental housing,” Forbes said. “The floods hit a bunch of affordable rental units, and in addition to that, a lot of homeowners had to move out of their homes and they occupied some of the rentals that were there.”

Two programs

The neighborhood landlord rental program is accepting applications until August 16 from landlords who own seven units or fewer that were affected by the flood. The program has $36 million to spread across developers, nonprofits, community housing corporations and housing authorities that apply.

The program should help 300 to 350 applicants and translate into 1,200 to 1,500 rentals, said Robert Bizot, LHC’s director of flood recovery programs. While the program has been deemed a “loan,” it can be fully forgiven if landlords comply with all of the requirements.

One rule is that landlords can only rent out their properties as “affordable” units for at least five years after they finish renovations. Landlords and developers are allowed to submit up to three applications and ask for no more than $1.5 million.

Partners Southeast, the nonprofit development firm that works with the East Baton Rouge Housing Authority, plans to submit three applications to the neighborhood landlord rental program. Because Partners is a nonprofit, they are eligible to apply for funding to build new affordable housing. For-profit landlords can only apply for money to rebuild properties affected by the flood.

Partners Southeast announced last year that they were planning an apartment complex in Old South Baton Rouge near the Water Campus called River South, which should have a mix of affordable and market rate apartments.

Now, they want to capitalize on the space near River South with additional properties that they hope to build using flood recovery money from the state. They are applying for money for more affordable housing developments wedged between Oklahoma Street, Glacier Street and Duane Street.

Partners Southeast envisions using the money to add three buildings with a handful of apartments in each of them, ranging from one bedrooms to three bedrooms.

J. Daniels, the chief operating officer for Partners Southeast, said it was smart for the state to include a wide range of incomes in what’s deemed “affordable.” While some affordable housing is restricted to just low-income renters, the state’s program will allow tenants living in the rentals to earn up to 80 percent of Baton Rouge’s median income.

That means a family of four earning as much as $51,900 annually could qualify for affordable housing in the new rentals, based on 2016 income limits from the Department of Housing and Urban Development.

“And at the end of that affordability period, you can then convert some of the units to market-rate units, furthering the creation of an economically diverse neighborhood,” Daniels said.

He said Partners Southeast has had good luck with banks getting on board with their projects, but both banks and private developers can be skittish about the administrative requirements involved with affordable housing.

“What will probably be a challenge in some cases is the fact that some private owners, or market-rate owners, don’t want to necessarily participate in affordability or income-restricted units,” Daniels said. “They view it as burdensome, in some matters, because of the compliance that’s involved.”

Some wonder why they have not heard more about the program that could have helped them. Alvin Rattle, for example, owned a rental house in the Monticello neighborhood that flooded in August.

He took out an SBA loan to rebuild and sold it when the work was finished. But he estimates that he could have had $60,000 more in his pocket if there was help to rebuild the house. And he questions whether the state programs will entice anyone to apply given the bureaucracy involved.

“Is there anything that’s out there to help a small business person that’s trying to make it?” Rattle asked. “This flood came out of nowhere and it changed my life. It’s a lot of red tape in these programs they have going on, they don’t tell you.”

The other main state program to restore rentals is called the “multifamily gap program,” and the deadline for it was June 15. The $38.25 million program is for developers, housing authorities and others with 20 or more units in multifamily structures.

Public and affordable housing agencies can receive $40,000 per flooded residence, while market rate rentals can receive up to $65,000 per unit or $6.5 million total. Like with the neighborhood program, those who receive the money to rebuild multifamily structures have to accept affordability requirements for future occupants.

While industry experts say there does not appear to be a good mechanism to track whether landlords with a few properties are rebuilding, they are seeing larger apartment complexes come back online.

Craig Davenport, a commercial real estate appraiser with Cooke, Moore and Associates, said most apartment complexes covered by flood insurance have been rebuilding. He said Baton Rouge’s tight rental market has started to loosen a bit as people move back into houses they own at the same time that newly restored rentals are becoming open again.

Laura White, vice president of the multifamily division for Latter and Blum Property Management, said eight of the nine apartment complexes she manages that flooded were restored between January and May. While apartment complexes are rebuilding, though, White said she is seeing landlords with single family rentals, like Rattle, sell them and walk away.

2008 versus 2017

When Paul Rainwater reflects back on the state’s rebuilding efforts from Hurricanes Katrina and Rita, he remembers the numerous changes made along the way to recovery programs.

By the end of 2008, the state’s small rental program that was intended to restore 18,000 rentals had only issued around 400 grants, although it had started the year before with the promise of moving quickly. Rainwater was the executive director of the Louisiana Recovery Authority before becoming former Gov. Bobby Jindal’s commissioner of administration and chief of staff.

“We were in a major financial crisis and we had to get money in the hands of the landlords and the banks just weren’t able to do it,” recalled Rainwater, who is now a consultant. Christina Stephens, who was the spokeswoman for the Louisiana Recovery Authority at the time, also said the crisis had a “chilling” impact on the small rental program.

In reaction, state officials retooled the small rental program to help landlords by having properties inspected and ensuring they were using qualified contractors, but then giving money to landlords directly to make their repairs.

Like now, landlords who received money in the hurricane aftermath also had to accept affordability requirements. But Bizot said the outreach to banks for the 2017 program has been much more extensive. Brad Sweazy, the chief operating officer for the housing corporation, said this time landlords are eligible for help based on the cost of repairs, not how much they will be able to charge for rent. 

Bizot, Sweazy and the others administering this year’s program are also hoping for high interest in the programs, which will then show the federal government that Louisiana needs more money for recovery. 

Both Rainwater and Stephens said it is important to remember that no two disasters are the same, and each recovery has different challenges. Rainwater added that being open to change was a key take-away from the Road Home’s small rental program, as it is important to shift gears if something isn’t working.

“You have to be flexible and have you ear to the ground and be talking to regular old citizens,” he said. “You go into the home and you figure out how to help them. You have to figure out a way to put those people over the goal line because you want those people in your community.”

Editor’s Note: This story was changed after publication to correct the names of the banks involved in the state programs. 

Originally published by The Advocate

A senior housing development is being planned for Gardere Lane, with the East Baton Rouge Parish Housing Authority’s development arm billing the project as a way to help vulnerable seniors, especially those affected by the August floods, while the parish experiences rental housing dearth.

The development, which local officials hope will address the tight rental market and community members hope will be a boon for the troubled Gardere area, will include both affordable and market-rate apartments and will be called Cypress at Gardere.

The nonprofit Partners Southeast development firm, which works with the Housing Authority, recently acquired the property at 515 Gardere Lane near Highland Road from Chase Bank for $450,000.

The four-story complex is being planned for 88 one-bedroom apartments and 11 two-bedroom apartments. Construction is expected to begin in early 2018 and finish about a year later.

“Our focus continues to be on our most vulnerable population, and seniors are that, especially post-flood,” said J. Daniels, the chief operating officer for Partners Southeast.

The complex will back up to Bayou Fountain. Although some neighborhoods around the bayou flooded in August, Daniels said the property where the apartment is being planned did not flood, nor did the adjacent Louisiana Soccer Association property.

Still, he said development’s elevation will be raised by 18 to 24 inches, just in case.

Daniels said the Cypress at Gardere is the first senior development Partners Southeast has taken on, and they hope to use it as a model for future developments.

Monika Gerhart, City Hall’s Office of Community Development director, said Baton Rouge was already experiencing a housing crisis before the floods wiped out roughly 13,000 rental units in August. And close to half of Baton Rouge’s renters at that point were spending 30 percent of their income on rent.

By February, the rental vacancy rate in Baton Rouge was down from its usual 7 percent to 3 to 4 percent, multifamily real estate appraiser Craig Davenport then told The Advocate.

“This is going to contribute to this badly needed mix of housing units,” Gerhart said of Cypress at Gardere.

Gardere community advocates also applauded the apartment complex, saying it can be one factor that helps to turn around the mostly low-income community marked by pockets of crime and blight.

Juan Cruz, a public health planner who advocates with the Gardere community, said the neighborhood is still trying to connect with the rest of the city, as forthcoming sidewalks and bike paths should entwine Gardere with other neighborhoods.

He also worried the complex might continue a trend of rental housing cluttering Burbank Drive over the past few years. The complexes on Burbank are mostly geared toward LSU students.

Still, Cruz said, Baton Rouge needs more senior housing, and the Cypress at Gardere development should have a “ripple effect.”

Murelle Harrison, executive director of the Gardere Initiative that tries to combat substance abuse and other social ills that affect the neighborhood, said Gardere is “moving in the direction we want to go.” She said she recently met with BREC about an upcoming $350,000 renovation for the Hartley-Vey Gardere park. 

BREC will meet with people who live in the neighborhood to determine what new features the park will receive as part of the renovation, BREC spokesman Cheryl Michelet said.

“As we work to improve the community, we need to look at all age groups,” Harrison said. “Our focus has been mostly on the younger children and their families, but I do realize there are older people in the community that need a safe place and a healthy place.”

Daniels said it has not yet been determined how many apartments will be affordable or market-rate. But all people interested in living there will apply through the same manner — directly on-site or through the management company — and the management company will then determine who qualifies for an apartment at a lower price.

The planning of the development was done with seniors and their possible mobility issues in mind, he said. On its 4 acres, Cypress at Gardere may include a salon, a library, a theater room, a fitness room, walking trails and more.

The development also will be on the Capital Area Transit System bus line to help seniors who do not have cars or no longer drive, Daniels said.

CATS’ route 46 travels through Gardere Lane, and the route is bookended by the Mall of Louisiana and L’Auberge Casino and Hotel. The bus route also makes stops at Baton Rouge General Medical Center-Bluebonnet and Our Lady of the Lake Regional Medical Center.

Construction of the senior development is expected to cost around $17 million. The construction team includes CORE Construction and Legette Construction, with Legette qualifying as a minority owned business. People interested in construction jobs for building the complex can attend a meeting at 6 p.m. Thursday in room 313 of Southern University’s T.T. Allain Hall, or call Tyrone Legette at (504)340-0616.

Originally published by Baton Rouge Business Report

The development arm of the East Baton Rouge Parish Housing Authority is planning to develop a 99-unit senior housing complex on a 4.5-acre site on Gardere Lane between Highland Road and Burbank Drive.

The Cypress at Gardere, as the planned development will be called, will consist of 88 one-bedroom and 11 two-bedroom units in a single, four-story building at 515 Gardere Lane.  The EBRHA acquired the property earlier this month from Chase Bank for $450,000.

The agency’s nonprofit development firm, recently rebranded as Partners Southeast, is spearheading the project. The firm was formerly known as Partners for Progress.

“We are excited about the opportunity to provide our senior residents with this first-class housing community surrounded by attractive neighborhood amenities,” says Partners Southeast Chief Operating Officer J. Daniels, adding the estimated cost of the project will be around $17 million.

The Cypress at Gardere will include a mixture of market rate and affordable housing units. Daniels says no determination has been on the breakdown between the two categories, or on whether the complex will be open to adults over age of 55 or only those 62 and older.

“We’re still figuring all that out,” he says. “It’s early in the process.”

Partners Southeast has selected a joint venture of CORE Construction Services and Legette Construction to be construction manager. Construction is scheduled to begin early next year, with completion scheduled for early 2019. Partners Southeast will solicit proposals from property management firms in the coming months, Daniels says.

The site on which the complex will be developed is zoned C-1, or light commercial, under which senior housing is allowed, meaning the project does not need to go before the Planning Commission for zoning approval.

The complex will feature a two-story lobby entrance, a community room with kitchen, salon, library/business center, theater room, fitness room and walking trails.

Originally published by The Advocate

Old South Baton Rouge is getting 46 new homes — some apartments, some duplexes, some single family homes — as part of the latest effort to revitalize the historic neighborhood where poverty has taken hold.

Metro Councilwoman Tara Wicker, Housing Authority Executive Director Richard Murray and Partners for Progress Chief Operating Officer J. Daniels made the announcement Wednesday, standing on a plot of land at the intersection of Glacier Street and Oklahoma Street that will soon become an apartment complex.

The housing developments will cost $9.8 million to build, which they are paying for with a combination of Louisiana Housing Corporation tax credits, the private debt from the tax credits, Housing Authority money and Community Development Block Grants.

Despite the Housing Authority’s involvement in the creation of the housing units, they wanted them to have a combination of affordable and market rate options to create mixed income developments.

“It’s really going to serve as a catalyst and change for Old South Baton Rouge,” Wicker said.

The River South apartments, which will go on Glacier and Oklahoma, will have 18 units with two or three bedrooms each. Prospective tenants, regardless of whether they are low-income or looking for market rate housing, will have to go to the apartment complex’s leasing office to apply to live there, Daniels said.

The wait list for River South has not opened up yet, but Murray said he expects demand to be high. Anyone can apply to live in the new units, regardless of whether they are a current resident of Old South Baton Rouge, but Daniels said they especially want to encourage Old South Baton Rouge residents to apply.

The remainder of the 46 housing units will be scattered through Old South Baton Rouge, on places including Highland Road and Washington Street.

While political leaders have talked over the past year about the need for economic development in north Baton Rouge, Old South Baton Rouge is often forgotten. The neighborhood between LSU and downtown Baton Rouge used to be a thriving and multi-ethnic hub that entertainers dropped by when they were in town.

It changed in the 1960s, when Interstate 10 was built through Old South Baton Rouge, and desegregation led to many of its longtime residents moving to other parts of the city. Since then, the community has been lower income and crime there has increased.

Wicker, the Housing Authority and other community activists say they want to reverse that trend. The Housing Authority has also recently built a small neighborhood off Thomas H. Delpit Drive.

Wicker said she plans to host a developer’s tour of Old South Baton Rouge in the next week to drum up more private interest in redeveloping the community.