A new study on Lexington's housing market shows an increasing demand for affordable housing, more rental space, higher-density housing and housing in more urban settings.
The study, commissioned by the Lexington Fayette Planning Commission, said most of Lexington's growth through 2025 will be in one- and two-person households made up of younger people who typically prefer more urban settings.
The study found that there is space for more than 14,000 new homes and apartments of varying types on vacant or underused land within the current Urban Service Area, the portion of the county where development is allowed.
The yearlong study stated that "like most parts of the country, higher-income housing has been overbuilt in recent years," and that Fayette County is losing middle-income households to surrounding counties.
Currently, the study found, there is a demand for 2,606 units of housing priced at less than $85,000, and 503 units available. Conversely, there are 1,518 units available for more than $244,000, with demand for 671.
"I hope this will help us understand not just how much housing we need or don't need, but what kind of housing we need," said Frank Penn, chairman of the planning commission, which oversees the city's development guidelines. "My hope is it will give us a place to start when we start looking at the comprehensive plan next year."
The comprehensive plan governs development in Lexington, particularly the boundaries of the Urban Service Area.
The $116,000 study was commissioned last year by the city's planning division. A 17-member steering committee assisted study consultants Robert Charles Lesser & Co., Urban Collage, EHI Inc. and the Phares Companies.
The study found that Lexington stands apart from nearby communities, mostly because the presence of the University of Kentucky means there are more renters and younger households. In addition, it found a marked difference at the dividing line of New Circle Road. Those living inside New Circle Road prefer a more diverse community in terms of people and housing, and those who live outside want a more conventional suburban community.
Those who want to live inside New Circle Road want areas they can walk to, green features and public transportation, the report says: "Those with no interest in living inside New Circle Road have comparatively little interest in these community features."
Away from the burbs
Although 60 percent of Lexington residents today prefer traditional suburban development, the study's authors say those trends will change.
Those differences are being affected by aging baby boomers, who are becoming empty-nesters and moving to college towns such as Lexington in retirement, and Generation Y, the youngest professional group, which prefers downtowns.
A significant number of people in Generation Y still want suburban settings, but "they want the suburbs to be different — more walkable and with more variety of products," the study said.
The baby-boomer numbers are more dramatic. Local projections in the study call for 136 percent growth in the population of people ages 60 to 85 between 2008 and 2030. That will mean a bigger need for low-maintenance, one-floor, single-family houses, townhouses and apartments and more independent-living and assisted-living facilities.
The numbers on the need for affordable housing — typically defined as 30 percent or less of household income — also are dramatic.
That doesn't surprise Holly Wiedemann, whose company, AU Associates, recently turned a condemned building next to the First Presbyterian Church into 10 rental units, all of which rent for less than $550 a month. They were leased immediately and have a long waiting list.
"This is the most desperate need anywhere, and it only becomes more desperate," Wiedemann said.
Housing trust fund
Other cities have created affordable-housing trust funds. That was the suggestion of a task force that urged the city last year to start a $4 million fund.
"We've known for three years that the affordable-housing crisis is severe," said Adam Jones, vice-president of Building a United Interfaith Lexington through Direct action. "We expect the council to take leadership on funding the trust fund."
The city study contradicts an earlier one this summer that was commissioned by the Home Builders Association of Lexington and the Lexington-Bluegrass Association of Realtors. It found that Lexington had ample affordable housing and said that additional programs to establish more affordable housing "would only supplant existing federal programs."
Representatives of the Home Builders said they had not had time to read the entire new report, and the Realtors' association did not respond Monday to calls for comment.
Knox Van Nagell, the director of the Fayette Alliance who served on the steering commission that helped with the study, said the findings will help policy makers.
"This has identified several of the housing needs we have to address, such as affordable housing, it has identified the opportunity to have a sustainable growth model, and it's given us a real sense of where our demographic trends will go over the next 20 years," she said.