MOSAIC NOLA:The Gentilly Project

Monday, November 07, 2005

Spotlight on Housing Effort

Grant Wagner and Xianghui Weng, both Mosaic team members, are spearheading the housing portion of this Mosaic project. Their website, "Mosaic-Housing", has several interesting links that help evacuees searching for a place to stay, as well as interested volunteers trying to find a way to help with this problem. The links attempt to serve the following purposes:

Provide evacuees with access to a database that provides various searchable housing options organized by region, keywords, ect.

Provide volunteers with up to date information pertaining to the types of housing needs that exist in the NOLA area.

Connect willing volunteers with evacuees through a database that matches needs with capabilities.

Also in the works are links, which describe what stage each area of NOLA is at in terms of rebuilding (demolition, foundation, electric), and a database that provides a comprehensive list of all Mosaic project housing contacts. Recently the housing group has been in contact with a non-profit profit organization COVER Home Repair, run by Simon Dennis, which is attempting to send a group of volunteers to the gulf coast and aid in the rebirth. Grant and Xianghui are making great progress and should see some tangible results in the near future with the incorporation of the COVER Home Repair organization.


  • Housing appears to be the most central driver of well-being, for those who are displaced as well as those who are returning.

    A lot of physical and economic recovery in New Orleans is being held up by the repair workers and service people for hire not having places to stay...

    By Blogger Quintus Jett, at 5:58 PM  

  • Depressed Values by Elevation Requirements

    Here is where the FEMA elevation requirements may come in.

    Current rules enforced by the CITY but required by FEMA, state that buildings that are more than 50% damaged cannot be rebuilt without being elevated to the base flood level.
    Analysis shows that such elevation typically is not economically worthwhile (i.e. the cost of elevation far exceeds the savings in flood damages).

    However, if you have such a substantially damaged building, especially on a slab, you will often end up demolishing it, being left only with an empty lot (and you have paid the cost of demolishing). For a slab house (which is the typical construction in the newer parts of the city such as New Orleans East, Lakefront and other areas) a LSU study estimates the cost at 50% of the value of the building. This virtually insures demolition of the building. Then the fair market value is only the value of the land.

    If the homeowner was able to get a building permit to repair his house the value of the damaged house would be its market value when repaired minus the cost making the repairs. To see how this might work out owners and other can go the a city of New Orleans web site, enter their address, and see an estimate of their rebuilding costs

    As an experiment I went to that site and entered $240,000. I was told my estimated damages were $124,126 and that was 51.74% of the value. Although not stated, this exceeds 50% and implies I would not be allowed to rebuild without elevating the house. A LSU study has estimated the cost of elevating slab houses to be half of their value, or $120,000 for a $240,000 house. Thus the cost of elevating a house and then repairing it would be $244,126, higher than the value of the house. Thus, it would be torn down (many complexities such as demolition costs have been ignored here).
    If a $240,000 house has damages that can be repaired for $124,126, the value of the house before repairs should be the difference or (240,000-124,126) =$115,874. This is a rather substantial sum of money and represents the amount my home value is lowered by the elevation requirements.

    Apparently due to these requirements, the amount the developer would have to pay would be approximately $115,874. In addition the developed would have to pay for the land, say another $50,000. Thus, without the elevation requirements a might be willing to sell for $265,000 or so. With the elevation requirements enforced by the city under pressure from FEMA, I might be forced to sell for the value of the land $50,000. If there is a structure standing that would cost $10,000 to demolish (and the city is saying I must demolish since it has become blighted) I might be negotiated down to $40,000, possibly less if I was desperate (say I had no job).

    Let’s say my house was at a location that the house would flood once in every hundred years, bringing it within the flood plain rules. The average flood claim for 1978 to 2004 has been $14,558.78. Let us presume that elevation by 4 feet (which appears to be what is involved in this case) would eliminate a damage claim equal to the average. It thus appears the elevation expenses of $120,000 would save the government the cost of paying a $14,558.78 claim which on average would occur every hundred years. The cost is 8.24 times the total benefit. However, as a finance professor I am aware of the need for discounting. The average government savings over 100 years is $145. If the raised house will last forever, this is a rate of return of .12% which is obviously very low.

    The state instead of permitting developers to get our property at values depressed by city rules (which the city of New Orleans could change) should allow us to rebuild.

    Obviously the above calculations are very rough and there may be a flaw I have missed (and there are certainly many refinements I have not discussed). However, rather substantial changes in the numbers will not change the logic.

    Readers can go to the city web site and determine just how much the city’s elevation regulations are costing them. After having done so, perhaps some would choose to ask the city why they are being subject to such costs (and ask their Federal representatives and President Bush why FEMA is being allowed to impose such costs on them).

    Notice the above calculation are just the lost of value. Many people feel an attachment to the historical structures and texture of New Orleans architecture and prefer that the city not force the destruction of such properties whether by elevation or demolition (after either the neighborhood will not look the same). Others feel an attachment to their neighborhoods and hate to see them destroyed. Some may note that churches, businesses, schools, and universities serve these neighborhoods and realize that the forced demolition of the houses would hurt these very institutions badly. Some might like to allow for these intangibles which are so important to many.

    One might note I may have exaggerate the savings in flood claims by presuming that elevation above the base flood (four feet) would have eliminated flood claims. For my house, with water up to the eves, the claim would have been almost as large even with elevation. The difference in damages from having say five feet of water in a house and nine feet is not that large.

    By Blogger ProfessorEdward, at 11:01 AM  

  • ProfessorEdward said...

    Depressed Values by Elevation Requirements


    I can help get this disseminated most widely if we can work together to get this into a simple form that places this information into an instruction format.

    Please email me qjett at

    professor qj

    By Anonymous quintus jett, at 9:53 PM  

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