August 23, 2012
More than 3,000 lots flooded by Hurricane Katrina and bought with federal money in an emergency bailout sit idle across this city — a multimillion-dollar drain on federal, state and city coffers that lends itself to no easy solution.
An Associated Press examination of the properties sold to the government by homeowners abandoning New Orleans after the catastrophic 2005 flood has found that about $86 million has been spent on 5,100 abandoned parcels. And there’s no end in sight to maintenance costs for perhaps most of the 3,100 properties that remain unsold.
This portfolio of urban wasteland and blight represents part of the storm’s difficult legacy that persists nearly seven years later.
And with federal funding for maintenance running out, there’s concern the lots could fall into deeper neglect when this cash-strapped city is forced to pay for upkeep and that they could contribute to New Orleans’s staggering blight. At last count the city found an estimated 43,000 blighted properties, according to a city-sponsored analysis of U.S. Postal Service data.
“Right now nobody on those 3,000-plus properties is contributing. It’s costing the city and state government to maintain them. Police got to go out there, run kids out of there, drug-users,” said Errol Williams, the tax assessor in New Orleans.
Until now, the properties have been managed by the Louisiana Land Trust, an agency set up using federal funds.
Donald Vallee, a longtime New Orleans developer, complained that city officials had not acted fast enough.
He advocated selling the lots at auction. Sitting on the properties, he said, was a “pure waste of money.”
Every month, LLT spends about $88 to cut the grass at each location. Other expenses range from insurance to pest control.
Since 2007, when the first homes were bought, $34 million has been spent on maintenance, $4.5 million on security and $9.1 million on overhead costs in New Orleans, according to LLT. In addition, some $38 million has been spent on demolishing 3,607 homes beyond repair and tearing up 1,256 slabs.
In the Lower 9th Ward, 739 homeowners sold to the state. About 570 of those properties remain unsold and entire blocks sit undeveloped.
The New Orleans Redevelopment Authority has said it’s sitting on many properties at the request of neighborhood groups to avoid flooding the market and hurting home prices.
Nicole Heyman, a New Orleans-based expert on vacant and blighted property with the nonprofit Center for Community Progress, said holding onto the property is the right choice. She is advising the city on its plans.
When a city sells cheaply they end up “just putting properties in the hands of investors who drive the properties’ values down,” she said. Buyers often sit on vacant properties hoping for a market turnaround, and when that doesn’t happen the properties end back up in the hands of a city, she said.