[StBernard] St. Bernard residents riled over growth in rentals

[Westley Annis]

St. Bernard residents riled over growth in rentals
by Chris Kirkham, The Times-Picayune 
Saturday November 01, 2008, 10:18 PM

SUSAN POAG/THE TIMES-PICAYUNE

It's a match between long-established St. Bernard Parish homeowners and a
rising wave of landlords and renters who are repopulating this single-family
neighborhood after Hurricane Katrina. Neighbors have signed petitions,
protested at public meetings and passed neighborhood restrictions barring
rental properties. 

Unsatisfied with the results, they now plan to take the fight to court. 

All across St. Bernard, a post-hurricane rise in rental properties has
triggered a property-rights debate and a lawsuit by a civil rights
organization. It is a battle that has left many in St. Bernard to wonder
what the future holds. 

"We had opportunities like everyone else to go to the north shore, to
Mississippi -- but we chose to return," said Lexington Place homeowner Gene
Lemoine, who moved back in June 2006. "Now I'm contemplating whether I made
the right decision." 

Meanwhile, investors who bought up flooded homes in hopes of flipping them
are caught up in the mess, many becoming unwitting landlords. 

Bobby Choina and Maria Draper were seasoned local real estate investors and
renovators who bought several flooded properties in the parish after
Katrina. 

"Right now we have five properties, and we've had to rent them all out,"
Draper said. "All I'm doing is really just paying the mortgage, which is no
business. Renting them out will just ease my worries a little bit." 

For longtime residents of the storm-battered parish, it's a clash of
pre-Katrina nostalgia and post-Katrina reality. Returning residents are
confronting the changing face of a parish once known for having a staunchly
loyal population base, where generations of families lived within blocks of
one another. 

With more than 90 percent of the parish's housing stock flooded, investors
and property managers from as far away as California and Florida bought up
then-cheap flooded houses to flip them with hopes of making a return. 

But as the real estate market slowed, rentals became the best option. 

For more than a year, the Parish Council has operated under an
often-controversial ordinance requiring landlords to apply for a permit to
rent out any single-family homes that were not rentals before Katrina. 

The criticism has been leveled on both sides. 

Homeowners want a permanent ban on rentals, which they say reduce property
values, invite crime and deter future homeowners from buying property in the
parish. Investors and others who want to rent their homes say the law
restricts their business and tramples their property rights. 

Ordinance challenged 

An earlier version of the ordinance forbidding any new rentals except to
family members sparked criticism that the parish was trying to block
minorities. 

Soon after, the council amended the blood-relative clause out of the
ordinance and paid $32,500 to the Greater New Orleans Fair Housing Action
Center to settle a lawsuit. The group argued in court that since the
parish's population is overwhelmingly white, the clause essentially
prohibited many minorities from renting in St. Bernard. The parish also paid
the group $123,772 in attorney's fees. 

A federal judge recently upheld the amended ordinance, ruling in the
parish's favor in a separate lawsuit brought by a group of investors who
bought homes and tried to rent them without seeking council approval. 

"You have this balancing act of homeownership and owner-occupied homes and
homeowners who have left and decided to sell to an investment company," said
Parish President Craig Taffaro. "If we have a neighborhood that's
predominantly rental, while we're asking them to reinvest in the community
we're changing the composition of their neighborhood and bringing down the
value. We think that's unfair." 

The Parish Council has approved the vast majority of the rental permits that
have come before them. Officially 76 rental properties have been approved,
and more than 80 other applications during the past six months are awaiting
approval. 

Neighborhood activists 

Striking the right balance has been a challenge for parish officials, and
the unintended consequences have followed. 

When a new rental permit request pops up on a block, neighbors often show up
in droves to protest at planning commission hearings, armed with petitions
and photographs. Some longtime homeowners have applied for rental permits
simply to prevent the spread of others on their block, taking advantage of a
provision that bars more than one rental in a 500-foot radius. 

The government is also hampered by an inability to monitor rental properties
throughout the parish. In some cases, landlords may come before the parish
planning commission and the council only after a neighbor has reported them
for illegally renting out a property. 

Then the council is faced with the likelihood of evicting tenants if they
deny the permit. 

For several months this year, the parish was barred from enforcing penalties
of up to $250 a day by a temporary restraining order stemming from the
federal court case. 

A federal judge found that the parish could move forward in enforcing the
ordinance, dismissing claims that the ordinance violated constitutional
property rights. 

One major question mark is what landlords will do when FEMA's Disaster
Housing Assistance Program ends in March, leaving many tenants on the hook. 

In Meraux's Lexington Place subdivision, former Council Chairman Polly
Boudreaux is leading an effort to sue neighborhood landlords for violating
deed restrictions that forbid rentals. The Parish Council approved the
permits, and cannot enforce neighborhood covenants such as the ones in
Lexington Place. 

So Boudreaux and others have hired a lawyer and plan to test their case in
court. 

"It's a bit alarming right now for those of us who are homeowners in
understanding that we don't have any control," Boudreaux said. "When you
have areas that were all single-family residential homeowners, you don't
think about 'Well, what happens if we lose 50 percent of these houses?'" 

Investors struggle 

Investors are also miffed. Choina and Draper's most recent purchase, on
Genie Drive in Chalmette, has sat on the market since spring. The front yard
now boasts "For sale" and "For rent" signs. One neighbor got so irked that
he stole the rent sign, Choina said. 

"They want Chalmette to be the same as it used to be, and that's just no
longer," Choina said. "It's going to be a mixed neighborhood." 

Investors from out of state bet on buying low and selling for a higher
price, but the biggest market they found was often for temporary laborers or
those getting rental assistance from the federal government. 

"Not only did it not pan out like we thought, it didn't pan out at all,"
said Brad Schaeffer, a St. Bernard resident and partner in Treevis
Properties LLC, which bought up more than 40 flooded properties in the
parish after Katrina. "I have not sold one house to one person who is moving
back to St. Bernard Parish. It's not going to be the same neighborhood as
before Katrina. ... It can come back again, but not with the same
residents."