Staff Reports
New Orleans’ City Council just performed a masterclass in political theater: they cut the “in‑lieu” fee for mandatory inclusionary zoning from roughly $304,810 per unit down to $10,000, left the ordinance on the books, and said they’ll jack the fee back up when the market “can bear it.” If your first thought is that this sounds backwards, you’re not alone.
What the City Council actually did
The Council adopted an amendment to the mandatory inclusionary zoning (MIZ) rules that replaces the enormous one‑time fee with a much smaller $10,000 payment per required affordable unit. Councilmember Lesli D. Harris framed it as preserving the MIZ program while making it feasible for developers today and allowing the City to raise fees again when conditions improve. The change came after local reviews and feasibility work showed the old fee was stopping large apartment projects from moving forward.
Why the original $300K fee failed
The $300K number came from feasibility studies and zoning materials. Consultants warned that at high construction costs, a heavy fee or a set‑aside kills the math on typical mid‑rise projects. Developers don’t do charity; they run numbers. Dan Mills of the Home Builders Association put it plainly: if you force builders to give up revenue, somebody else pays — usually renters or buyers. Meanwhile, federally subsidized projects have been the main source of new affordable units, not the MIZ mandates.
Cutting the fee to $10K is a political shell game
Lowering the fee will likely nudge more construction into the pipeline in the short run. But keeping the MIZ on the books while reserving the right to raise fees later is risky and dishonest policy. It gives politicians the illusion of action — “we have an affordable housing rule!” — while letting market realities and rising costs dictate whether housing gets built. If the goal is affordable housing, shrinking supply with rigid mandates and then pretending to fix it later won’t get the job done.
The real solution: unleash supply, not mandates
If New Orleans wants cheaper houses and lower rents, it should stop making development a maze of fees, protracted reviews, and mandates that ignore market math. Cut needless regulations. Speed permits. Let builders build. Use targeted, transparent subsidies for very low‑income households, not blunt tools that push up costs across the board. Politicians can keep their photo ops and press releases, or they can actually make housing affordable. They can’t convincingly do both.
