N.O. council may seek middle ground on demolitions

When the New Orleans City Council takes up the question Thursday of whether to issue demolition permits for four public housing complexes, the vote might not be an all-or-nothing decision. The council's action could be far more nuanced, as members prepare to vote on five separate measures that will determine the fate of the B.W. Cooper, C.J. Peete, Lafitte and St. Bernard complexes.

Drafts of the proposed motions were still in the works Monday. But Council President Arnie Fielkow said they will mirror a series of requests made last week by the Housing Authority of New Orleans.

Four motions will ask the council to approve individual demolition permits for each of the housing developments, known as the "Big Four."

A fifth motion, if approved, would break a tie vote last week by a historic review committee that blocks the demolition of Lafitte.

Meanwhile, demolition opponents on Monday called on council members to delay their vote for at least 60 days to allow the council adequate time to independently investigate HANO's rationale for demolition.

Echoing arguments that critics of the plan have made for weeks, local ministers and housing advocates said Monday that the sturdiest of the public housing buildings should not be destroyed at a time the city needs housing as quickly as possible.

They also argued that displaced public housing residents face procedural hurdles in trying to land one of the hundreds of units in public complexes that officials say are available now or will be within weeks. The activists say there are fewer units available than the federal Department of Housing and Urban Development claims, because units don't always match the needs of potential tenants, such as larger units sought by larger families.

Looking for middle ground

In the end, critics say they would prefer that the council find a middle ground between wholesale demolition and complete renovation of the complexes. Some believe HANO should incorporate more of the Unified New Orleans Plan, a recovery blueprint built on citizen input. In the UNOP plan, residents favored some level of demolition, but also believed restoring the street grid could improve access and allow some public housing to be renovated quickly and efficiently.

HANO plans to demolish 4,500 public housing units at the four complexes and replace them with mixed-income neighborhoods. Officials said the demolition plan does not affect the agency's plan to reopen a total of 3,000 apartments within its traditional public housing stock.

Supporters say the plan offers better housing for the poor and that mixed-income neighborhoods are a better model than the concentrated poverty of traditional complexes.

A Morial legacy

In voting Thursday, council members will exercise relatively new authority.

Under an ordinance approved in 2002, new permits for the demolition of structures controlled by HANO or the Department of Housing and Urban Development can be issued only "after a City Council motion has been passed authorizing such a demolition permit."

Previously, owners of public housing, like any private property owner, applied directly to the city administration for a demolition permit.

The measure was proposed by former Mayor Marc Morial at the height of debate about converting the former St. Thomas public housing complex into the mixed-income River Gardens development that exists today. Morial at the time was waging a battle to stop HUD from taking over HANO, though in the end, the takeover succeeded, and HANO remains in receivership to the federal housing agency today.

In asking the council to approve the demolition permits this week, HANO executive administrator Karen Cato-Turner submitted paperwork explaining the redevelopment plans for the B.W. Cooper, C.J. Peete and St. Bernard complexes. In those reports and in her letter, Cato-Turner argues that the redevelopment plans preceded Hurricane Katrina.

Cato-Turner also appealed to the council to break a split decision Dec. 10 by the Housing Conservation District Review Commission that, if allowed to stand, would impede demolition of the Lafitte complex near Treme.

Demolition deadlock

The commission, which reviews applications for demolitions in historically significant areas, approved HANO's request to tear down dozens of structures at B.W. Cooper and C.J. Peete but deadlocked on whether to authorize the demolition of Lafitte. The St. Bernard development is located outside the area overseen by the commission.

HANO officials have said the agency will lose $110 million in federal GO Zone tax credits and $27 million in housing block grants unless the commission's vote is reversed.

They also say that any interruption of plans to demolish Lafitte will imperil former residents' eligibility for government rental assistance.

In opposing the demolition plans, Robert Horton, a Critical Resistance member and former member of the St. Thomas public housing development, said too few of the St. Thomas residents displaced years ago were able to return once the complex was replaced by a mixed-income enclave. He and other critics of the HUD plan fear a similar outcome if public housing is redeveloped across the city.

"I don't have a problem with redevelopment. I have a problem with HUD and their history with redevelopment," Horton said during a meeting Monday with Times-Picayune editors and reporters.

The Rev. Marshall Truehill, a Baptist minister and former City Planning Commission member, said: "Let's call a timeout."

The critics included two other ministry figures, Bishop Charles Jenkins of the Episcopal Diocese of Louisiana and the Rev. Jim VanderWeele of the Unitarian Universalist Church. Others included Monique Harden of Advocates for Environmental Human Rights and Walter Gallas, a field office director for the National Trust for Historic Preservation.

Even IRS unsure of tax effects

The Answer Spot addresses your post-Katrina questions. To submit a question, send it to insuranceTAXES

We are buying a house in Lakeview and the house has Road Home money associated with it. The sellers are receiving the Road Home money and signing it over to us. We are agreeing to all the covenants associated with the grant. Do we, the buyers, have to pay the taxes on the Road Home money? We did not claim any losses on our previous tax return. Who is responsible for the taxes on this money?

That is a very good question, and one that we can not answer at this time. The IRS is still considering how to handle situations such as this one, so it is unclear what tax consequences you will face.

You have mentioned that the Road Home grant is subject to federal income tax if the grant receiver filed a casualty loss in 2005 after Hurricane Katrina. Could you point me to an IRS publication that describes the tax treatment of the Road Home grant? Furthermore, does Road Home issue a 1099 for the grant?

IRS Publication 525 contains a section that discusses situations in which you are recovering income from something you previously took a deduction for, which is the situation many Road Home grant recipients find themselves in. This discussion begins on page 20. To read this publication online, go to www.irs.gov/pub/irs-pdf/p525.pdf.

There is also additional information under the "Grant Proceeds" section of the Hurricane Katrina, Rita and Wilma Guidance on the Web site www.irs.gov/businesses/small/article/0, ,id=171341,00.html.

The Road Home program says that real estate transactions undertaken through Option 2 or 3, both of which involve the sale of your home, will generate a 1099, which is a tax document demonstrating that the seller of the property received income.

However, if you pursue Option 1 of the program, the option in which you stay in your home and rebuild, you will not receive a 1099 because no real estate transaction is taking place