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Affordable Housing Not Adding Up In New Orleans

<p>Despite vastly higher levels of federal affordable housing tax credits awarded to Louisiana, developers are pulling out of projects because they can't make sufficient profits.</p>
April 12, 2007, 5am PDT | Alex Pearlstein
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"Developers awarded federal tax credits to build affordable housing in post-Katrina New Orleans are concluding that many of the projects aren't financially feasible and are unlikely to get built before the government's 2008 deadline."

"After Hurricane Katrina destroyed more than 82,000 low- and moderate-income rental units in 2005, the federal government substantially increased Louisiana's tax-credit allocation, giving the state $170 million in low-income housing tax credits specifically for hurricane-ravaged areas."

"Under the terms of the agreement, the developers must be ready to rent the units by the end of 2008 or lose crucial financial benefits that could help push their projects along. But according to the Louisiana Housing Finance Agency, about 65% of the projects that were awarded tax credits are in jeopardy because developers can't get them off the ground. Some private developers say the number of projects in jeopardy is much higher, perhaps as much as 80%."

"Although all of the $170 million in tax credits -- plus an additional $13 million -- for Louisiana have been awarded, only 5% of the proposed units have started construction."

[Editor's note: Although this article is only available to WSJ subscribers, it is available to Planetizen readers for free through the link below for a period of seven days.]

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Published on Wednesday, April 11, 2007 in The Wall Street Journal
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