Senate approves housing consolidation

by Leslie Turk

Not much is going Gov. Jindal's way in the current legislative session lately, but it does appear he'll get his way on the consolidation of housing assistance programs across the state.

In March Gov. Bobby Jindal announced his plans to create a single Louisiana Housing Corporation to streamline the state's disparate housing entities, including the Louisiana Housing Finance Agency. He proposed that the nonprofit LHC oversee all housing funds in the state, uniting almost 30 separate programs now managed by five organizations.

Monday the Senate passed Republican Sen. Neil Riser's bill 36-1, sending it to the House. The legislation calls for an 11-member board with eight gubernatorial appointees to run the corporation.

To ensure a smooth transition for the consolidation, the LHFA would continue to exist through June 2012.

Apparently seeing the handwriting on the wall, the LHFA's president, Milton Bailey, announced to his board April 13 that he did not want to be considered for re-election to the office of president. His resignation was effective immediately. At that time, the board voted to leave the office open for three months and then begin a search, according to spokesman Jeff DeGraff. In the interim, Vice-President Alesia Wilkins-Braxton is acting head of the agency.

Specifically, the legislation is designed to dismantle the LHFA, which, according to the Associated Press, was the subject of numerous complaints about bureaucracy and inefficient spending after the 2005 hurricanes.

The LHFA's chairman in the wake of those storms was Greg Gachassin of Lafayette. Gov. Kathleen Blanco appointed Gachassin to the board, through the Louisiana Mortgage Bankers Association, in January 2005. He was named interim chairman in February 2005 and served as chairman from April 2005 to April 2006, leaving the board in October 2007, according to LHFA's records. A couple of years later, Gachassin formed The Cartesian Company, which he describes as a real estate development and finance solutions company, specializing in development, project management, capital solutions and public-private partnerships. Read more about how Gachassin used his position on the state board and later the Lafayette Public Trust Finance Authority to orchestrate lucrative low-income housing deals for himself here. (State Rep. Rickey Hardy has asked the Louisiana Board of Ethics to investigate whether Gachassin's actions constitute a violation of the state's Ethics Code.)

Billions in federal and state dollars flow through many different agencies in Louisiana, including the LHFA, the Office of Community Development's Disaster Recovery Unit, the Department of Health and Hospitals and the Department of Children and Family Services, along with many other programs that plan, fund and monitor home ownership, homelessness prevention, rental assistance, and even housing related child care.

"By supporting this legislation to create the Louisiana Housing Corporation, we will help developers better access capital and offer affordable housing options to Louisiana residents in need of safe homes for their families," Jindal said. "We are long overdue in establishing a consolidated and focused strategy to coordinate our state housing programs, which will potentially save millions of taxpayer dollars while helping public and private housing agencies provide more effective services to our people."

Louisiana has almost 30 housing-related programs managed across five different organizations, all with a shared purpose of providing safe and affordable housing. These agencies currently employ more than 300 people - more than 100 earning in excess of $60,000 a year - and this staff serves overlapping functions, Jindal contends. Creating a unified LHC will include the reductions of staffing needs and elimination of multiple boards, his office noted, while better identifying housing needs and developing policies and plans to meet those needs around the state.

In announcing the plan in March, House Speaker Jim Tucker said, "A statewide coordinated housing plan has been sorely needed for some time. Coordinating the myriad of housing programs and agencies across this state will help focus the state's efforts in providing quality homeownership, rental and recovery initiatives."

The corporation would oversee rental assistance, home ownership promotion programs, homeless prevention, housing-related child care and hurricane recovery dollars for rebuilding rental housing.