Designate more for low-income in affordable housing efforts

The Central Kentucky Housing and Homeless Initiative has long been actively involved in the effort to create an Affordable Housing Trust Fund in Lexington.

This organization has consistently supported the need for a high degree of operational flexibility in administering such a fund, primarily because a local fund would need that flexibility to access sources of matching funds.

However, the one area where we were insistent on inflexibility was on who would be served. The greatest affordable housing need exists among households with incomes at or below 30 percent of the area median income. These folks are the hardest to serve primarily because rents need to be so low (around $350 per month).

This is not just a local challenge. National Housing Trust Fund legislation (yet to be funded) designates more than 90 percent of its resources to households with incomes at or below 30 percent median income, and to rental housing only.

Income limits are set primarily to establish who is eligible to be served, but they also define the problem.

The recent report by czb, "Lexington's Affordable Housing Challenge," stated that the problem is primarily concentrated among households with incomes at or near minimum-wage levels.

Czb calculated Lexington lacks 6,000 housing units that can be rented for about $350 per month, and is losing an additional 400 such units each year.

The report added that this shortage has been accelerating: "In 1990, 88 percent of the rental units in Lexington were affordable to low-income working households. By 2000 that had shrunk to 44 percent. By 2010 it had dropped to 19 percent and by 2012 to 17 percent."

Our community needs to focus on creating more housing with rents at the lower end of the market.

Both the affordable housing commission and task force recommended allowing some flexibility to include moderate income households, primarily to gain public support for the program and to avoid the stigma often directed at poverty programs.

However, both groups recognized that without a significant set-aside targeted to extremely low income households there would be a very real possibility much of the funding would not be allocated to Lexington's most serious housing shortage.

The stated reason for setting only a top-end eligibility limit is to allow for flexibility and to give the new Office of Affordable Housing time to see what proposals are submitted and determine how best to respond to them.

But what if no proposals are submitted to serve those most in need?

Since projects aiming to serve extremely low income households are the most difficult to develop, it is likely they will be rare unless they are highly incentivized.

That is primarily the reason that a majority of this funding must be designated to serve households at or below 30 percent of median income. Without such a legislated designation, funding will flow to the upper allowable households and it is quite possible none of it will address our severest housing shortage.

Our goal should not be to make it easier to spend this money, but to make sure that the majority of funding creates housing affordable to extremely low-income households.

If it was easy to develop such housing it would be developed in the marketplace. It is not, and that is why our city has accepted some responsibility for addressing this vital community need.

Finally, the most recent task force recommendation suggested a top-end limit at 80 percent of median income, but also specified that at least half of all funding be directed to households with incomes at or below 30 percent of median income.

Given the depth of the housing shortage among very low income families highlighted by the czb report, it is not unreasonable to suggest that 75 percent of all funding be targeted to very low-income households.

We thank Mayor Jim Gray and the Urban County Council for supporting this much-needed program and reiterate the crucial need now for authorizing an ongoing funding source for this work.

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