Developers Chosen to Build Affordable Single-family Homes in Lower 9th Ward

BY JESSICA WILLIAMS | This email address is being protected from spambots. You need JavaScript enabled to view it. DEC 24, 2018 - 10:08 AM

Four developers have been chosen to build affordable homes in the Lower 9th Ward as part of a plan by city officials to revitalize that neighborhood.
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Four developers have been chosen to build affordable homes in the Lower 9th Ward as part of a plan by city officials to revitalize that neighborhood.

The nonprofit groups tapped by the New Orleans Redevelopment Authority this month include Home by Hand, Lucas Construction, UnCommon Construction and SBP (formerly the St. Bernard Project).

Up to 16 vacant properties along Andry Street near Dr. Martin Luther King Charter School were available for rehabilitation. The nonprofit Home by Hand will develop up to four of them, while SBP will take up to three properties. 

Lucas Construction will take up to two, and UnCommon Construction will take one.

Aaron Frumin, of UnCommon, which partners with high schools to award construction apprenticeships to students, said the project will allow his nonprofit to fulfill its mission while also serving a neighborhood in dire need of more investment.

The redevelopment authority made the properties available as part of its Orleans Housing Investment Program, which offers subsidies to developers willing to build affordable single-family homes for purchase. The program also helps would-be homebuyers with down payments and closing costs.

The program is seen by some advocates as a way to encourage home buying in and area that before Hurricane Katrina had one of the highest rates of black homeownership in the city. 

City officials also hope the program will help increase the area's population and attract the private investments it now lacks. 

A panel of NORA staffers and city officials evaluated seven proposals before selecting four developers to receive the awards. 

Developers were selected based on their experience, the strength of their proposals, their ability to repay the loans, the impact their projects would have on the surrounding area and their willingness to work with disadvantaged businesses.

Home by Hand scored the highest, with 482 of 500 possible points, followed by SBP, with 426 points; Lucas Construction, with 410 points and UnCommon, with 380 points. 

The groups will buy the lots for 10 percent of their fair market value or $2,500, whichever is greater. NORA will then provide low-interest loans of as much as $100,000 per property to build the homes. Firms can later have up to $75,000 of each loan forgiven.

The developers must also work with real estate agents to find prospective buyers.

The homebuyers, meanwhile, can get $25,000 in down payment assistance and potentially as much as $65,000, depending on the amount of financing the home's developer receives but does not use.

The program is generally open to people who earn no more than 80 percent of the area's median income, or $52,500 for a family of four.

However, families who earn up to 120 percent of median income — $78,720 for a family of four — and can show that they were negatively impacted by hurricanes Katrina or Rita are also eligible. 

Public school teachers, law enforcement officers, firefighters and emergency medical technicians will get first choice of the homes for sale.

The program is being funded by about $1 million in state housing grants, and firms will have a year to redevelop the properties upon purchasing them from NORA. 

Frumin said the redevelopment authority's willingness to subsidize development in distressed areas is a win-win for nonprofits like his, which often run on a shoestring budget. 

"It’s like having our cake and eating it, too," he said.