New Orleans Considers Implementing Rent Control
STEVE INSKEEP, host:
Yesterday New Orleans opened its first public school since Hurricane Katrina. Benjamin Franklin Elementary School will accept about 500 students. Authorities hope that will encourage more residents to return, although more schools will not open until January. Now in order to return, people need schools, jobs and affordable homes, which is why state and city officials are now considering rent controls to help stabilize the market. NPR's Audie Cornish reports.
AUDIE CORNISH reporting:
Joyce Lynn Dominic(ph) says despite the fact that she spent months away from home after evacuating New Orleans, she won't be taking any vacations anytime soon. That's because she hates hotels.
Ms. JOYCE LYNN DOMINIC: I'm tired of the hotels, tired of staying in a one-room, no icebox, no stove. You're constantly going out to eat. That's money--that costs money. And it's getting to the place that I'm frustrated.
CORNISH: Right now, Dominic, her two daughters and three grandchildren are staying at the Sheraton Hotel in downtown New Orleans. She's on a fixed income and previously lived in federally subsidized housing. She says now she's priced out of her old neighborhood in New Orleans East for good.
Ms. DOMINIC: Houses is so high. I mean, two-bedroom, they asking $1,000, which is ridiculous. So they know two bedrooms range from 500 to 600, a little less. Now they asking for 1,000 out in front. We cannot afford that.
CORNISH: And she's not the only one. Scan online classifieds and there's post after post of New Orleanians complaining of the spike in rent. Dominic took her concerns to a recent City Council meeting. Mayor Ray Nagin has raised the issue and City Council President Oliver Thomas has criticized landlords increasing their rates.
Mr. OLIVER THOMAS (President, New Orleans City Council): If you were making a good living at 600, you're making a killing at 1,100 or 1,200. Do you make a killing while people are dying or do you continue what you're doing while people are getting on their feet?
CORNISH: But Edward Young(ph) says he's trying to get back on his feet, too. He owns 30 rental units and buildings around the city and says the rental market was depressed before the hurricane. With hundreds of recovery and disaster aid workers looking for housing and 200,000 homes in the city wiped out from the storm, Young says keeping rents at prehurricane rates just isn't feasible.
Mr. EDWARD YOUNG (Rental Unit Owner): People'll ask me, people say, `How much did that apartment rent for before the storm?' and I'll tell him. You know, he'll say, `You're asking 1,000; it was $800 before the storm.' And these are some of the reasons why. We had vacancy for three months. Our expenses are going to be higher. Any repairs we have to have done are going to cost more. And anything that don't get covered they will have to do out of pocket.
CORNISH: Young will raise rents by 25 to 30 percent on the properties he's had to rebuild. He's already housing the workers he's hiring to fix up the place, and he's still got to cover the mortgage payments on houses where tenants are no longer supplying him income. Young says council President Thomas' rent-control idea would mean it wouldn't be worth it to him to spend the 40 to 60,000 he'd have to spend to repair his building.
Mr. YOUNG: Well, if he did that, there would probably never be enough apartments available for people who need them. Some people could just take the insurance and walk, and we considered it.
CORNISH: Right now a consumer protection bill on the issue sits untouched before the state Senate. That measure would create a 12-monthlong temporary rent-control policy for hurricane-affected areas. It was one of over 150 bills that didn't make it out of the Legislature's recent emergency session. But the bill's sponsor is planning to raise the issue when state lawmakers meet again, which could be as soon as January. Audie Cornish, NPR News, New Orleans.
INSKEEP: This is NPR News.