Rental Quandary
Scarce units, costly repairs and surging rents hit tenants and landlords hard
Monday, December 12, 2005
By Gwen Filosa and Michelle Hunter
New Orleans Times-Picayune
After losing their half of a Louisiana Avenue double to
the flood, Sheila Landry and her 13-year-old daughter thought
post-Katrina life couldn't get much worse. Then they returned
to New Orleans from evacuation in Orlando, Fla.
They were braced for the sight of sodden clothing and rotted
furniture. Instead they found . . . nothing at all. Their
landlord had essentially evicted them from the apartment they
had rented for $500 a month for half a decade.
"Jewelry. My daughter's piggy bank, the one she has
had since she was 5. Her Xbox, video games, her porcelain
dolls," Landry said, ticking off the list of things that
had been pitched out in her absence. "Everything in my
house is gone."
But Landry's landlord said he has his own cross to bear. The
entire row of housing Donald Bradley owns on Louisiana Avenue
was damaged by flooding. He said he gave Landry plenty of
time to return, but when she didn't, he had to clean out the
property.
All of her stuff had been drowned anyway, he said, and she
hadn't paid rent since August, an assertion Landry denies.
Bradley said it cost him $700 just to have workers clear out
the apartment.
So much for Landry's security deposit.
"He told me he used my September rent to pay for the
cleaning," said Landry, who had a month-to-month lease.
"Life goes on, but I just never thought he'd do
something like that. He really thought I wasn't coming
back."
Two sides of story
Landry and Bradley are flip sides of the post-Katrina rental
market in New Orleans.
With available housing stock drastically reduced by the
flood, demand -- and rents -- are soaring. And the big
suburban apartment complexes, which now have waiting lists
with hundred of names, seem unlikely to relieve the pressure.
Are the rent increases gouging, as many tenants assert, or
simply a market correction by landlords who said they are
facing higher costs across the board? Whatever the answer,
the days of bargain-basement New Orleans rents appear to be
over.
Sob stories abound on both sides of the transom: Tenants are
losing longtime homes, and landlords are having trouble
bringing units back on line in the face of budget-busting
rehab and labor costs as well as legal impediments.
Landry sees her landlord as a villain right out of Dickens.
But Bradley said he's a victim himself. He had no flood
insurance for his six properties in New Orleans.
"I'm trying to save everything," he said.
"People need somewhere to live. I'm trying to bring
people back to New Orleans."
Like his tenants, Bradley and his family lost their home to
flooding. His relatives, including children, are scattered
across the South. A landlord for 10 years is now, ironically,
searching for a rental unit he can afford himself.
"The prices they want are ridiculous," Bradley
said. "We looked at a three-bedroom home the other day
and the lady wanted $1,200. Another wanted $1,500. I'm not
price gouging," he said, adding that he has no immediate
plans to raise the rent on Landry's old unit higher than the
$500 he was getting pre-Katrina.
Bradley has been commuting every day from New Iberia to work
on his rental properties. He hopes to occupy one side of a
double. But it could be three or four months before it's
livable, he said.
"I'm a black man trying to make it," Bradley said.
"I try to help people. If I can help somebody, I
will."
Legal scramble
Part of the problem is that legal impediments make it harder
for landlords to clear and re-rent apartments that are under
lease to tenants who haven't paid rent in months and have no
intention of returning.
Recent settlement of a federal lawsuit imposed a 45-day wait
between the posting of an eviction notice and any court
hearing on the matter. Tenants were relieved, while many
landlords said the order leaves them holding the bag.
"What about the landlords? We have bills and
obligations, too," said Alvin Humphrey, whose rental
property made it through the storm. "Is FEMA or the
state helping landlords to pay their bills?"
Humphrey, now living in the San Francisco Bay area, said he
relies on the income from his rentals to help care for his
ailing mother in New York City. But he said he isn't forcing
anyone out.
"I don't want to pressure my tenants and force them to
make a bad decision on top of a bad situation. I will let
them tell me their plans."
Lawyers in New Orleans are scrambling to help renters who
claim they've been treated unfairly. But in Louisiana,
renters who pay month-to-month may be booted out with only a
10-day notice -- and no reason is needed.
The climate is growing ugly, lawyers said. The city's legal
aid clinic has hundreds of cases, with only 10 lawyers on
staff post-Katrina.
"It's terrible. Louisiana law is so favorable to
landlords that tenants really have no recourse if they do not
have a term lease," said attorney Bernadette D'Souza,
who is handling housing case for New Orleans Legal
Assistance, an agency swamped with new clients.
"Space is at a premium right now," D'Souza said,
"so landlords who find out they can evict someone and
hike the rent can do so now."
D'Souza successfully argued in court recently on behalf of a
number of renters facing eviction, at least buying them some
time to remain in their homes.
But her agency cannot take cases that seek damages, since it
works for the poor and doesn't charge fees. If renters come
to her claiming their landlords dumped their possessions into
the street, D'Souza refers them to the bar association.
Private attorneys may be interested in a damage lawsuit,
because they can win fees.
Coming up empty
Meanwhile, newly returning residents, not to mention
newcomers to the area, are coming up empty when they set out
to rent a house or apartment.
"For the thousands of people trying to return to New
Orleans, the fact that affordable housing is now unavailable
makes it practically impossible for us to do so," said
Leslie Tate, a Boston-area resident searching for a place
here. "This is especially true for students who used to
be able to get away with paying $400 a month for a nice
place. Now, that's unheard of."
Tate said she has found rentals in New Orleans jacked up to
three times what they went for a year ago.
"The city is not nearly as appealing as it was a few
months ago, but the rates are now comparable to those of New
York," Tate added.
Jennifer Belato, 19, a Delgado student from the Northshore
who wants to return to New Orleans by mid-January for
classes, had a similar experience. "The few places that
are for rent are $1,000 or more," she said. Her searches
in Algiers and Mid-City were fruitless.
"FEMA has to bring in a lot of trailers soon, or the
people of New Orleans won't be able to come back even if they
want to," Belato said.
It's the loss of eastern New Orleans apartments and the Lower
9th Ward, and parts of the Upper 9th, where cheaper
apartments had been found, that's forcing renters to look to
the spots of town left unscathed by the storm, where
"luxury" and "safe neighborhood" dot the
classified ad descriptions.
Some rents in check
Those landlords who cater to college students, and want to
keep it that way, have mostly kept their rents in check.
Other coveted parts of Uptown, the neighborhoods with private
patrols and the rare Garden District rentals, upped their
rents long before Katrina.
The Warehouse District has glimmered for years with boutique
$1,500 efficiency apartments, and pre-Katrina saw New Orleans
swoon into "condo-ization" that turned apartment
buildings into high-priced "luxury" condos, for
sale or rent, such as the St. Charles Avenue building where
400 square feet, plus a communal swimming pool, will cost you
$995 to rent, plus a $155 monthly condo fee.
But generally, before the storm, the New Orleans region was a
near-bargain when it came to apartment rentals. Musicians,
coffee-shop workers and aspiring artists often flocked here
instead of more traditional meccas such as Brooklyn, N.Y., or
Berkeley, Calif., knowing they could land half a double on
the cheap.
Former New Orleans renters have looked to the suburbs,
Metairie and Harahan, or across the river to Algiers and
Gretna for shelter, only to find that even the sprawling
complexes have no vacancies.
100,000 units off market
More than 100,000 rental units are off the market across the
New Orleans area due to hurricane damage, said Henry Shane,
an owner of 1st Lake, which rents some 8,000 homes, mostly in
Jefferson Parish.
Of that lot, 3,500 apartments took damage and 1,800 more need
major repairs, Shane said. What wasn't damaged is being used
to house tenants from the uninhabitable units and Shane
employees who lost homes to flooding.
Property owners and landlords are faced with higher repair
bills and lost revenue from three months without renters, and
many said they are forced to pass along those costs to their
tenants.
Landlords with damaged homes said construction crews cost
twice as much these days. It's common to see rents upped by
$100 or more. A Bywater one-bedroom that was $775 before the
storm is $100 more even though it sustained no damage, with
the landlord saying the increase doesn't even begin to recoup
the higher insurance bill.
Rental property owners are now competing for a reduced pool
of maintenance workers and that has driven up labor costs.
Gone are the days of a $12-an-hour handyman, said Dee Hunter,
who manages 30 properties.
"They won't touch you now unless you pay $25 an
hour," Hunter said. "And that's if you can find
someone. Burger King's paying $10 an hour with a signing
bonus."
Hunter, an apartment locator, said Katrina has practically
forced her into retirement. There isn't a single rental
property available for her to show the desperate and
displaced, she said. The message on her answering machine,
inside her Metairie office, says as much.
"It's heartbreaking to keep listening to all the
stories," Hunter said.
One man, a retired veteran from Chalmette, called to say the
only possessions he had left were the cell phone on which he
was calling her and the car in which he now sleeps.
In Algiers, Steve Enslow pulled every Internet advertisement
for his 700-unit apartment complex, Forest Isle. His waiting
list since the storm has grown to 600. But with nothing
available, Enslow said he didn't want to give people false
hope.
Enslow is taking rent up about 5 percent across the board at
Forest Isle, where he had to promise his staff a 150 percent
raise just to get them to come back to work after the storm.
Shane said rents at 1st Lake properties likely will go up as
much as 7 percent for new leases.
That's par for the course, considering the new economy and
storm-scarred circumstances, Shane said. As for price
gouging, Shane said that's more likely to occur with smaller
mom-and-pop rentals and not with the large complexes.
"Renters are our customers," Shane said.
"We're not in this to make a big killing on a
disaster."
Not all Scrooges
The news isn't all about Scrooge-type landlords.
At least one apartment complex in devastated eastern New
Orleans, Oak Island, has offered to return security deposits,
former residents there said. And Katrina has forced many
evacuees to become absentee landlords.
Nora Wall rented out her home, along with her mother's, in
Riverbend after she left the city in order to work. She was
flooded with inquiries when she advertised an 800-square-foot
apartment for $600. The same house has a larger unit in front
that goes for $1,100, because it includes a washer and dryer,
a dishwasher, and shared yard.
"I want to pay my mortgage and fix up the property, but
I'm not looking to get rich off the situation," said
Wall, who runs a local nonprofit and plans to return to the
city regularly. "I hope that by maintaining my property
and offering a fair rental I can contribute to the rebuilding
efforts."
Wall combines her idealism with a landlord's practicality.
"I hope my renters are good people who won't ruin my
house," she said.
Gwen Filosa can be reached at gfilosa@timespicayune.com or (504) 826-3304. Michelle Hunter can be reached
at mhunter@timespicayune.com
or (504) 826-3836.