Plans for new Bywater mixed-income apartments scaled back as developers seek affordability

Posted on May 11, 2018
Plans for new Bywater mixed-income apartments scaled back as developers seek affordability

By Jennifer Larino at The Times-Picayune. May 10, 2018

Last year, a New Orleans development team announced plans to build a new five-story, mixed-income apartment building in the Bywater with the goal of attracting former residents who have been priced out of the neighborhood. The team says it intends to move forward with the project this fall, though it will be smaller and less aggressive in its affordability goals.

The plan pitched last June by Iris Development Co. and Green Coast Enterprises called for a $30 million development with 105 apartments, a parking garage and 9,800 square feet of ground-level retail space. The project will replace the industrial warehouse at 2930 Burgundy St. located along the railroad tracks on Press Street and a block away from Studio Be, the Bywater art studio and cultural hub.

Curtis Doucette, a managing partner at Iris Development, said the team had originally planned to take full advantage of the city of New Orleans’ density bonus program, which allows developers to build more units on a property in exchange for dedicating a share of its apartments to lower-income renters. The bonus allowed developers to build up to 105 apartments, and they intended to meet that limit.

One problem? Parking. Doucette said the original design included a covered parking garage at the bottom of the building. The cost of the podium design needed to support the apartments on top of the parking garage wasn’t feasible. The size of the building also packed on added cost.

“We went back to the drawing board a whole lot of times to figure out how to make this project affordable to the majority of our residents,” Doucette said.

The result is a smaller $18 million project with 70 apartments and 2,000 square feet of ground-level retail space. The complex will have surface parking around the building instead of a garage, though the development will remain five stories and most of the building’s amenities like a rooftop pool and indoor fitness center remain intact.

“We had to fight to get to a design that we could build at a price that made sense,” Doucette said, adding developers even plan to commission artists to paint murals on the complex’s exterior walls.

The building will still be mixed-income, though there are some changes in what that mix will look like. The original plan set aside 15 percent of the apartments for lower-income residents for 50 years, with some units priced at rates targeting residents who earned as low as 30 percent of the area’s median income.

In the updated plans, 10 percent of the apartments — or seven units — will be priced to target residents who earn 80 percent of the area’s median income. That translates to about $900 a month for a one-bedroom unit and $1,100 a month for a two-bedroom unit.

Doucette said the remainder of the apartments will have rents at “workforce levels,” geared toward people who work in Bywater or commute to jobs in the nearby downtown area. Rents would fall between $1,400 and $1,600 a month for a one-bedroom unit, and between $1,900 and $2,200 for a two-bedroom unit.

Doucette emphasized building long-term affordable housing remains at the heart of the 2930 Burgundy project. He noted the original plan included market rate apartments to help subsidize the project, ranging from $1,300 a month for a studio to up to $3,000 for a few three-bedroom units. The latest instead focuses on providing multiple levels of affordability, he said.

“We just don’t think it’s a good bet to go into the market with an apartment that’s $3,000,” Doucette said, noting the recent spike in luxury apartments mainly in downtown New Orleans.

The nonprofit Crescent City Community Land Trust is funding the project and is an equity investor. It previously partnered with Green Coast Enterprises on The Pythian, a downtown apartment building on Loyola Avenue targeting middle-income renters. The Pythian opened in June 2017 after a $44 million renovation.

Julius Kimbrough Jr., executive director of the Crescent City Community Land Trust, said 2930 Burgundy shows just how much thought goes into building a successful affordable housing development when the goal is “producing permanent affordability.”

Kimbrough noted many projects leverage incentives to create short-term affordability. Residents can be left hanging when the incentives expire. He pointed to the American Can apartments, which made headlines last year when residents were notified their rents would skyrocket after an affordable housing requirement baked into the building’s 15-year-old incentive package expired.

Kimbrough said the city’s voluntary density bonus program is still a good idea, even though, ultimately, 2930 Burgundy won’t be pursuing it. (The bonus would have kicked in at 72 units.)

He is hopeful the project will serve as a model for how other developers can meet New Orleans’ need for affordable housing, especially for its service workers, more of whom are being priced out of neighborhoods like the Bywater and to more affordable areas on the fringes of the city.

“Gentrification isn’t the dirty word here,” Kimbrough said. “Displacement is the dirty word.”

Doucette said he and his team talked with the nearby New Orleans Center for Creative Arts to get an idea of what would be reasonable rent for teachers in the neighborhood. The team has talked about a partnership to offer apartments to NOCCA faculty and staff, though no formal agreement is in place.

Developers have also met with neighbors about the project. Doucette said plans for a single entry and exit to the parking lot were scrapped after neighbors expressed concern. Drivers will now enter the lot on one side of the block and exit on the other.

The project has full zoning and permit approvals. Developers aim to start demolition work on the site before the end of the year. A September start date is currently targeted.