Lexington council is asked to put $2 million a year into an affordable housing fund

kward1@herald-leader.comJuly 1, 2014 

A group of stakeholders has recommended that the Lexington Urban County Council put $2 million from the general fund into an affordable housing fund each year.

Planning Commissioner Derek Paulsen presented the plan at a council work session Tuesday. Also Tuesday, the city took the first step toward hiring someone to manage the new affordable housing program.

Under the plan, proposed by a group including homebuilders, advocates and city officials, the affordable housing fund would provide financial assistance to developers to build and rehabilitate affordable dwellings.

Paulsen estimated that developers might receive 5 to 8 percent of their financing for new housing units through the city's fund. Property owners would have deed restrictions specifying who would be served by the housing.

The number of housing units to be created with the help of the fund would depend on the type of projects that developers propose, but Paulsen said it is reasonable to assume that $2 million in annual funding could help support the creation of 75 units a year. Lexington is losing 400 affordable housing units each year, according to a recent study by consultants czb. About 6,000 people who make minimum wage in Lexington can't afford their rent and aren't receiving rental assistance.

Paulsen said the council would receive annual reports about whether the city's affordable housing capacity is increasing under the fund's efforts. Projects supported by the affordable housing program would be targeted at households earning up to 80 percent of Lexington's area median income.

Several council members questioned whether that level was low enough to help those who need assistance the most. Paulsen responded that an Affordable Housing Board to be set up under the plan could target specific income levels for which housing is needed.

In addition to helping with financing the projects to create more affordable housing, Paulsen said the city could help support developments by waiving fees and giving such projects an expedited review during the planning and development process.

The council endorsed the recommendations of the shareholders' group. Councilman Steve Kay qualified his endorsement by saying that "there are some details in the recommendations that I think council needs to think a little more about."

Councilman Ed Lane said he was worried about creating a new bureaucracy.

At a meeting later Tuesday, the council approved first reading of an ordinance creating the position of affordable housing manager. Paulsen said he hopes to begin advertising for that position soon.

The council is expected to take up an ordinance setting up the affordable housing program and its funding mechanism next month. The council already has voted to earmark $3.5 million from a current-year surplus for homelessness and affordable housing. Of that, $3 million would go toward affordable housing, with the remaining $500,000 directed toward addressing homelessness. The plan provides for separate offices of Affordable Housing and Homelessness Prevention and Intervention. Former Community Action Council employee Charlie Lanter was named to head the homelessness program in April.

Several citizens spoke in favor of the affordable housing plan. "We have an affordable housing crisis in our city," said Janet Tucker. "People are making very, very tough choices between food and medicine, between rent and utilities."

Ike Lawrence, speaking as a representative of the Lexington Landlord Association, told the council he opposes the plan.

"There is competition for affordable housing ... all over Lexington," he said. "I do not think we have a housing problem. I think we have an enabling problem." Lawrence said landlords were not represented on the stakeholders' group, and he offered alternative suggestions ranging from telling tenants to move to a cheaper part of town or get a second job to setting up landlord licensing requirements and neighborhood sweeps by code enforcement.

Karla Ward: (859) 231-3314. Twitter: @HLpublicsafety

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