So Many Places to Live, but So Far Out of Reach

NEW ORLEANS — Thousands of people are looking for a place to live in this city. Many thousands of houses are vacant or for sale, and acres of land sit empty.

But turning potential housing into inhabited homes is proving to be a major challenge, even for a city that survived the fury of Hurricane Katrina and the failure of the levees. For those who need shelter the most, these houses are out of reach.

More than 8,800 houses are for sale in the New Orleans metropolitan area — almost as many as were sold in the last 12 months, according to one of the city’s leading real estate brokerage firms. High insurance costs and the crash in the mortgage market nationwide have slowed sales here, whether people are moving out of town or opting to relocate to a different neighborhood.

Thousands more damaged houses — probably 6,000 within the city limits — are being bought by the State of Louisiana through its Road Home program, which compensates homeowners for their losses in the 2005 hurricanes. These properties will be turned over to local governments for redevelopment or resale. (By one estimate, as many as 20,000 buildings in the city are derelict.)

Meanwhile, 27,500 families, mostly from New Orleans, are still living in tiny, tinny government-issued travel trailers across the state, waiting for their homes to be repaired or for some kind of affordable housing to become available. Many other people remain in faraway cities. And hundreds — by some accounts, thousands — live on the city streets.

The housing situation in New Orleans varies almost block by block. Some areas are hotter than before the storm; others are wastelands. In some neighborhoods, new or rebuilt houses are scattered among empty lots and boarded-up homes, a phenomenon known here as the jack-o’-lantern effect.

By Lake Pontchartrain, in a middle-class neighborhood called Vista Park, a resident, K. C. King, can see a little of everything: new houses raised 10 feet above sea level to surpass new flood regulations, abandoned ranch houses with moldy furniture inside, bald lots, for-sale signs, travel trailers and one renovated house — not popular with the neighbors — that has been turned into a rental. There is even a swimming pool still full of what people living nearby say is filthy floodwater.

“In this neighborhood,” Mr. King said, “the jack-o’-lantern effect is in 3-D.”

Many reasons figure into the mismatch between the need and availability of housing, including history, geography, lingering storm damage and the impact of government programs, intended and unintended. The factor most obvious to economists is price.

“At the very low end of the income strata, we do have a shortage of housing,” said Ivan J. Miestchovich, director of the Center for Economic Development and Real Estate at the University of New Orleans.

Demand for expensive property, however, is low. “On houses more than $350,000 in price, your marketing time is 18 months,” Dr. Miestchovich said. “Over $1 million, it’s two years and more.”

Housing prices, which spiked after the 2005 storm, have been declining. The average sale price in the city dropped to $159,000 in November, the lowest level in years (though it increased in December to an average of $222,000). Even so, sales numbers have been weak for the last few months.

Part of New Orleans’s allure used to be that it was possible to live well on little because a lot of cheap, if rundown, housing was available — a result of years of slow migration from the city. Much of that housing was destroyed; many remaining properties need expensive repairs.

Construction and insurance costs have soared, and borrowers need better credit records to get a housing loan because of problems in the national mortgage market, said Mtumishi St. Julien, executive director of the Finance Authority of New Orleans.

Before Hurricane Katrina, most people in the city were renters, not owners, and more than 50,000 rental units in the metropolitan area were damaged or destroyed when the floodwaters rose. Rents at the remaining apartments shot up by almost 50 percent; a two-bedroom apartment that might have rented for $660 a month in 2004 now costs close to $1,000 a month, according to federal data.

Efforts to help replace rental housing got off to a slow start. Melissa Landry, press secretary for the Louisiana Recovery Authority, said state programs were helping to build 25,000 apartments that would be affordable for low-income residents.

The state, the city and private civic organizations like the Jeremiah Group are hoping eventually to turn those renters into homeowners, by providing subsidies, reducing construction costs and finding a way to cut the price of insurance.

Local and federal officials said they did not expect an increase in homelessness after recent decisions to demolish public housing projects and to close trailer parks run by the Federal Emergency Management Agency.

But people who work with the families in question are not so sure. The Rev. Marshall Truehill Jr., pastor of the First United Baptist Church, said he was so concerned about an influx of homeless families that he asked the city to convert several former school buildings into shelters.

Based on the turnout at recent forums and public meetings, one question on the minds of many people here is what will happen to all the houses, most badly damaged, that the Road Home program is buying from people who are not rebuilding.

In the city, the properties will be handled by the New Orleans Redevelopment Authority, which before the hurricanes was supposed to deal with blighted properties, and by most accounts failed. Joseph Williams, a former banker who became executive director of the agency a year ago, said it had been underfinanced and understaffed in the past but was gearing up to deal with both the Road Home properties and abandoned sites.

Progress has been slow. Last fall, the agency sold 27 blighted properties for redevelopment pilot projects; a nonprofit group called Assisting Hand will break ground Friday on the first of these, in the Seventh Ward.

But what the agency will be able to do with the Road Home properties remains unclear. For one thing, it does not yet know all their locations. In addition to proposals to encourage developers to build or rebuild housing that could be made affordable, the agency is actually planning to reduce the amount of potential housing by allowing neighbors to buy adjacent properties to, for example, expand their yards.

That is what Mr. King would like to do with the house next to his in the Vista Park neighborhood — or rather, next to where his house will be when he rebuilds. He and his wife Kathi are still trailer-bound. But many details remain to be worked out, like how much the city will charge for the property.

“I’d just as soon buy it and split it with the neighbors,” he said. “But I’m not sure I can afford it.”