In New Orleans, Reinvestment Fund’s Market Value Analysis (MVA) tool has been helping city officials make better-informed decisions about where to direct limited development funds since 2012. “The Market Value Analysis is an invaluable tool as we strategically implement programs to restore properties to commerce,” said Brenda M. Breaux, Executive Director of the New Orleans Redevelopment Authority (NORA).
Prior to using the MVA, when deciding whether to demolish a blighted property or invest in it, NORA relied on an informal assessment of the neighborhood and how the area was likely to be affected by either course of action. Now, NORA can rely on the MVA and its component metrics for the area in question, such as the median sales price, permit activity, the presence of vacant land, and the percentage of homes that are owner-occupied. “The MVA highlights important neighborhood characteristics that inform our policies and programs. The analysis lends itself to the development of a custom set of tools to address the unique market conditions associated with each cluster,” said Ms. Breaux.
With updates conducted in 2015 and 2018, Breaux added, “The MVA allows us to visualize the impact of our programs by mapping our investments against the evolution of our real estate market over time. While the MVA benefits from continuity over time, the model is also dynamic and is constantly being refined. The third iteration, completed in 2018, incorporates a new Short Term Rental License variable that reflects a residential market condition that couldn’t have even been contemplated when the first iteration was completed in 2012.
Indeed, the New Orleans real estate market has undergone remarkable change since the 2012 MVA. NORA’s Director of Real Estate Development & Planning, Seth Knudsen, noted that “In our strengthening market, the MVA has allowed us to identify areas where the rate of neighborhood appreciation has not kept pace with the city as a whole and there is opportunity for growth. The MVA overlays allow us to track important private investment trends within the city and explore the critical relationships between those housing and commercial investments and neighborhood strength. We have used the MVA to identify areas where we can successfully auction properties for market rate residential development as well as areas where development and homebuyer subsidies are needed for affordable housing development.”