Lexington council tables vote to establish fund for low-income housing needs

bmusgrave@herald-leader.comFebruary 25, 2014 

The Urban County Council on Tuesday delayed a vote to establish an affordable housing fund to address Lexington's low-income housing needs.

The move angered housing advocates and some members of the council who have pushed for the creation of a trust fund for more than seven years.

Mayor Jim Gray cast the tie-breaking vote to table the issue until April 15, which is after Gray's April 8 budget address. The vote was 8-7. Gray said Tuesday that he plans to include money in his budget proposal for affordable housing, but he declined to say how much.

Some housing advocates walked out of council chambers after the vote to table. So many people attended Tuesday's meeting that the city had to open an overflow room.

"I'm disappointed that once again we have not taken action on what is clearly a significant need," said Rachel Smith Childress, CEO of Habitat for Humanity, who served on the first city task force on affordable housing in 2008. "We have to decide as a community what kind of a community we want to be. Our inaction is implicitly stating what kind of community we want to be."

Council member Chris Ford, an affordable housing advocate who represents the 1st District, criticized Gray and the council after the vote.

"I'm disappointed for low- to moderate-income people in Lexington who want to stay here and live and work," Ford said. "I'm disappointed, Mayor Gray, and I will say this publicly, in your vote to table discussion. If we were talking about Rupp Arena, I'm certain that 7-7 vote to table would have gone differently."

Ford said that the council has written a couple of "blank checks" to the administration, including putting money toward the 21c Museum Hotel downtown, setting aside $1 million for a fund that would target high-tech jobs, and giving $2.5 million toward the $5.5 million design costs for the redesign of Rupp Arena.

Gray said after the vote that he understood that Ford and others felt passionately about affordable housing and that he understands the frustrations.

"If you have a deep need to be loved, don't run for mayor," Gray joked.

Council member Steve Kay had proposed setting aside part of a tax on insurance premiums to generate money for an affordable housing trust fund and to address homelessness.

Kay's motion came after the council heard a report from czb consultants during Tuesday's council work session. That report said that to deal with the city's housing crisis, it needed to spend about $36 million. But the consultants cautioned that the city does not have the means to spend all of the $36 million in one year. An investment of $3 million to $4 million would get the initiative started.

Over the past two decades, the city has lost 28,000 apartments affordable to minimum wage workers, the report found. And the problem is getting worse.

In 1990, there were 35,017 apartments that someone making a minimum wage could afford — or about 88 percent of all apartments and rental units. In 2010, minimum wage employees could afford only 17 percent of apartments and rental units, the study found.

About 15,000 non-student households cannot afford fair market rent in Lexington of $750. About 9,000 of those households receive some form of housing assistance, according to the study. That means 6,000 of those households are paying more than 30 percent of their wages for rent or live in substandard or overcrowded conditions.

The housing crunch has been caused by rising rents and stagnating wages for service sector and other lower paying jobs. Meanwhile, wages in high-tech jobs have dramatically increased, driving up housing and rent prices.

Lexington is losing about 400 affordable rental units each year to higher rents, the report said.

The report — which cost about $50,000 — is the latest in a string of studies on affordable housing. In 2012, Gray appointed a task force to look at homelessness and housing. That task force issued 48 recommendations in January 2013. One of the ideas was to increase the tax on insurance to start an affordable housing trust fund, which could help with rental subsidies or encourage the building or rehabilitation of current units.

Instead of increasing the tax on insurance, Kay's proposal Tuesday would have dedicated 1 percent of the current 5 percent tax to affordable housing initiatives. But many on council were confused. The 1 percent would generate $5.3 million, instead of the recommended $4 million to start the program. Motions to cap the amount that went to the affordable housing trust fund failed.

Several council members said they wanted to know more about how the money would be divided between affordable housing and homelessness.

Kay, who co-chaired the 2012 commission on homelessness, said he was disappointed with the council's decision to put off action.

"The work has been going on for many years. It has been postponed many times. It's been put in committee many times, and it's been tabled many times. We've done it again today," Kay said.

Vice Mayor Linda Gorton, who voted to table the issue, said that the council just received the cbz report on Tuesday and needed time to review it.

Ford, Kay, Shevawn Akers, Harry Clarke, Diane Lawless, Kevin Stinnett and Chuck Ellinger voted against tabling. Gorton, Peggy Henson, Ed Lane, Jennifer Scutchfield, George Myers, Julian Beard, and Bill Farmer voted to table. Jennifer Mossotti was absent.

Beth Musgrave: (859) 231-3205. Twitter: @HLCityhall

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