From Renee Rutledge on February 12, 2009 in Locations
Hurricane Katrina left 80% of New Orleans flooded, with some parts under 15 feet of water. Tens of thousands of homes were left uninhabitable, many of them historic landmarks. Today, a lot of the questions revolve around tearing down or restoring. Red tapes keeping homeowners shut out and incentives are bringing investors in.
Whats going on in and around the Gulf Coast
It is estimated that New Orleans is now confronted with 65,000 vacant or blighted properties. Many of those properties were rentals and, in many cases, uninsured and most likely wont be rebuilt by their current owners. On the positive side, these buildings are structurally sound shells and can be purchased for a song (sometimes for just the price of the land.) The buildings exteriors can be restored to the original architectural style and the interior can be gutted and restored at a fraction of their replacement cost. These gems can then be turned around and rented for a handsome profit.
The rebuilding process has been slow but steady. Homeowners have invested billions of insurance dollars into their homes as well as Road Home dollars for those who qualified. FEMA has invested billions into the public infrastructure. The work that has been completed thus far paves the path for investors who, once nervous about such a devastated market, are now seeing reasons to invest.
One reason why things are picking up in New Orleans is GOZA (Gulf Opportunity Zone Act) tax incentive. The U.S. Government enacted legislation to spur redevelopment in the areas referred to as the GO Zone. It offers a win-win incentive to both the community and to the investors who invest in it by providing for the single largest tax deduction on the acquisition of property in the area considered the Go Zone bonus depreciation.
Bonus depreciation allows for a single one-time write off of 50 percent of the depreciable basis of the property. To take full advantage of the bonus depreciation and the other rental real estate write-offs, you must qualify as a real estate professional or actively participate in the “business of renting” the property. The GO Zone has stirred up a lot of new business in the building industry.
Issues confronting historical landmarks
Katrina spared the most famous historic areas, such as the Garden District, the Warehouse District, and the incredible French Quarter, but other areas of historical importance, such as Treme and Mid-City were destroyed. Many Historic Preservationists are working within the city in order to restore these neighborhoods and save these valuable landmarks from being bulldozed; however, the people who lived in those gems have a different agenda they just want their homes back.
There is an eagerness to get back to life as it once was pre Katrina, an eagerness to rebuild, but it is important to the culture and character that they try and maintain the beautiful architecture for which New Orleans is famous for: Creole Cottage, Raised Center-Hall Cottage or Villa, Double-Gallery House, Shotgun House, and American Townhouse.
As the process of rebuilding begins, people should understand the rules, regulations, and programs that could affect homeowners plans to rebuild. There are programs that deal specifically with the historic preservation of the city, and programs that focus on getting residents back to the city.
Why the delay?
There are certain neighborhoods that are regulated by the Historic District Landmarks Commission and their approval is needed in order to make any physical changes to the houses. This has been a factor in the delay of the rebuilding process. Some homeowners feel they have the right to demolish their homes and start over, while The Historic Preservationists believe the houses should be saved. If a home is on the National Register of Historic Places, they will offer homeowners up to 45,000 in grants to help owners preserve their landmark.
Habitat for Humanity building low-income housing
The New Orleans area Habitat for Humanity provided homes for 84 new families in 2008 and theyre planning an additional 100 homes in 2009. Throughout their 25 years of service, New Orleans Habitat has helped over 286 families become habitat homeowners; 185 of those homes were Katrina related.
Not so popular among some of the locals, but a good solution for helping bring residents back home sooner. The plan is to build modular homes in Orleans Parish neighborhoods. The homes are being modeled after the different architectural styles found throughout the city. Displaced citizens want to come back home theyre becoming impatient and find that the modular homes are necessary. Not only necessary, the homes are less expensive and take less time to build. Though there are mixed feelings about this new way of rebuilding their neighborhoods, it will help to bring residents back home where their roots are. One of the downsides, which in the scheme of things really isnt much of a downside, there are limited styles, colors, cabinets, and floorings to choose from.
New Orleans Mayor Ray Nagin, who said he has checked out virtually every modular company in town, said The industry will play a vital role in the recovery because it makes housing affordable for thousands of hurricane victims who cannot shell out big bucks for a custom home.
These are but a few types of projects buzzing around New Orleans these days. There are many challenges a city like New Orleans must deal with and the full scale of Katrinas damage is still being realized. The damage was so devastating that the city is basically being built from scratch.
Other related reading:
Recognized for excellence in integration, the New Orleans Disaster Recovery Program, created by Rebuilding Management LLC, won first place in the 2008 Innovative Housing Technology Awards presented by TecHome Builder magazine. The award pays tribute to Rebuilding Managements innovative use of computer technology to integrate all aspects of the home restoration process. For full article: http://www.americangozone.com/?p=23#more-23