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Local Housing Shortage Driving Higher Rents

Local Housing Shortage Driving Higher Rents

A recent study finds Louisiana's percentage of "rent-stressed" households, those spending more than 35 percent of their incomes on rent, is higher than the national average.

The 2014 Housing Needs Assessment - commissioned by the Louisiana Housing Corporation - shows almost 45 percent of Louisiana renters pay more than 35 percent of their incomes on housing costs, compared with 43.1 percent nationally.

The 2014 figure is nearly 15 percentage points higher than in 2000, showing rental affordability has decreased in the state.

Local real estate expert Wade Ragas says the rent increases are being driven by a housing shortage.

"There's a shortage of housing under the Low Income Housing Tax Credit Program, where 40% or so of the new units offer very low rents because of federal subsidies, and the remainder of the rental units are supposed to be rented at market rate, and they have to carry a little more of the operating expense load because of the subsidies on the below-market rate units," Ragas said.

Ragas says the city has a large stock of duplexes and triplexes, but those don't get subsidies from the federal government for redevelopment.

"So we have a housing stock in need of redevelopment, but the subsidies are very disproportionately targeted toward larger apartment complexes, either new construction or major renovations of them," Ragas said.

The large number of low-wage earners who rent is also a factor.

 

 

 

 

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