Affordable apartment complex in South Lexington to get major upgrades
.jpg "Malabu Manor consists of 79 one-bedroom apartments for those 62 or older and who may have disability eligibility. The apartment complex, shown here, is located in South Central Lexington on Malabu Drive.")
An affordable housing community for low-income seniors and residents with disabilities in Lexington is getting an upgrade.
Fairstead, the real estate company that owns Malabu Manor, said it will rehabilitate the 79-unit community starting this month, with construction continuing through December, including in-unit, exterior and property-wide upgrades. Developer Lee Jaffe said the company was “proud to bring a fully modernized Malabu Manor to our residents.”
Interiors across all residential apartments will be updated, in addition to energy efficient switches made across mechanical, electrical and plumbing systems.
The community room, laundry room and on-site office are additionally slated for renovation and reconfiguration. Amenities like the business center, library, outdoor gazebo and dog park are also on the list to be refreshed.
Malabu Manor — at 137 Malabu Drive in South Lexington’s Zandale neighborhood — has two three-story residential buildings with 79 apartments, all of which are reserved for seniors, those with disability eligibility and households earning up to 60% of the area median income.
Area median income is calculated as the amount where half of households in a city earn more, and the other half earn less. The U.S. Department of Housing and Urban Development uses the calculation to determine eligibility for affordable housing, set rent limits and hand out down payment assistance.
The 60% threshold is what’s used in the Low-Income Housing Tax Credit program that funds construction and preservation of affordable units. Housing is designated as affordable if its residents are spending less than or equal to 30% of their income on rent or a mortgage. A unit for those making 60% of the area median income inherently caps housing costs at 30%.
In Lexington, the area median income is approximately $69,400, according to the local chamber of commerce.
Those making roughly $41,600 qualify for Malabu Manor. Approximately $20,800 is 30% of the area median income, and is the recommended annual spend a household should budget for housing to not become cost burdened.
The real estate firm that has a focus on building affordable communities acquired Malabu Manor in 2022 as part of its long term strategy to preserve existing units for low-income residents across Kentucky.
Of its 30,000 units under management across the country, 1,600 are located in Kentucky. Fairstead recently acquired City View Park, a more than 500-unit affordable housing community in West Louisville.
The rehabilitation project at Malabu Manor is being financed through 9% Low-Income Housing Tax Credits provided by the Kentucky Housing Corp. and a $750,000 grant from the U.S. Department of Housing and Urban Development’s Green and Resilient Retrofit Program.
“This investment delivers critical upgrades to an aging property while ensuring families can continue to afford to live in a safe, stable community,” said Kentucky Housing Corp. Multifamily Programs Director Terry Helton. “The project reflects our shared commitment to expanding and preserving high-quality affordable housing across Kentucky.”
The federal grant money will support energy and climate resiliency improvements across the property in addition to in-unit upgrades.
Additional financial partners include PNC Bank, which is a Low-Income Housing Tax Credit investor. John Nunnery, one of the bank’s senior vice presidents and a manager of preservation investments, said the rehabilitation serves as a preservation project PNC was proud to support.
“Investments like this strengthen communities by helping to ensure safe, stable housing remains accessible, while also supporting long-term sustainability through energy-efficient and resilient upgrades,” he said.
The Fairstead project at Malabu Manor comes at a time when the Commonwealth is at a crossroads with statewide housing policy that acts as an answer to a supply and demand problem.
Without a coordinated effort to build more housing, the state may need to fill a gap of more than 287,000 units by 2029, according to an estimate in a 2024 housing study commissioned by the Kentucky Housing Corp.
That same year, Lexington’s first affordable housing study in a decade showed the Fayette County city needs more than 22,500 additional housing units to meet demand. The vast majority — about 17,000 — need to be affordable.
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