Published in City Business
Editor’s note: The following is part of an ongoing series of stories on projects involving the New Orleans Redevelopment Authority.
Lakeview lots sold to the state after Hurricane Katrina are poised to have new owners.
Lots bought by the state’s Road Home program and now in the hands of the New Orleans Redevelopment Authority will be sold to the public under a program dubbed Lakeview Phase II.
NORA worked with the Lakeview Civic Improvement Association to develop the program, through which 216 lots not eligible for the city’s Lot Next Door program are up for sale.
Phase II closed to bidders July 31. Out of 216 lots, NORA expects to sell about 50 to buyers who own land adjacent to the lots and, therefore, had first priority to buy them. The remaining 166 properties are going into a bid-off. Bids are due Sept. 14 for properties that had multiple bids, and the winning bids will be announced Sept. 20. According to NORA, 40 of the lots have no bids or the offers were rescinded. Those lots will also be part of the Sept. 20 bid-off.
LCIA wanted to see homeowners own the lots, rather than developers buy blocks of them. So LCIA met with NORA and entered into a partnership in April with the redevelopment agency to help craft Lakeview Phase II.
“The whole program was designed around several core concepts, the first being to give the right of first refusal to the true pioneers, the people who returned to the community,” said LCIA President Brad Fortier. “We just wanted to have some control over how that was done so it just wasn’t auctioned off in blocks to developers.”
After Katrina, Lakeview property owners sold roughly 540 homes to The Road Home, said Todd Wallace, chairman of LCIA’s NORA committee. LCIA helped NORA determine which of those were not eligible for the Lot Next Door.
Under Lot Next Door, the property owner to the immediate right or left of a lot sold to The Road Home is given the first opportunity to buy it. But the buyer must have a current homestead exemption on the property adjacent to the one they are interested in purchasing.
Wallace said the goal of Lakeview Phase II is to help former Lakeview residents who moved out after Katrina and now want to return to their old neighborhood, but they lost their homestead exemption in Lakeview and aren’t eligible for the Lot Next Door.
“It’s an owner-occupancy program designed to revitalize the community as quickly as possible,” said Wallace, who estimates that 60 percent of the homes in Lakeview have been rebuilt since the storm.
Lakeview Phase II is open to everyone, not just former Lakeview residents, although current Lakeview property owners are given the first option to buy adjacent properties.
Purchasers must start construction on a house within one year of owning the lot. A buyer must live in the house for three years or it can be sold or rented to an immediate family member, who can’t sell it or rent it for three years without facing a penalty of 25 percent of the lot’s purchase price.
Wallace said 50 percent to 60 percent of those interested in the lots are people wanting to return to Lakeview. The lots are selling for $30,000 to $60,000 apiece, he said, adding that they are priced at fair-market value by appraisers NORA hired.
Fortier said he’s also seeing demand from young people who want to get into Lakeview.
“The demand is definitely there,” Fortier said. “Let’s be honest: These properties are basically selling for arguably half of their private market value.”