LEXINGTON, Ky. (LEX 18) — High mortgage rates and increasing rents are contributing factors to affordable housing issues in the United States.
In Lexington, creating more affordable housing is at the forefront for Lexington Commissioner of Housing, Charlie Lanter.
"It's not just a Lexington problem, it's a Kentucky problem. We have a significant housing crisis in Lexington and Fayette County," Lanter said.
Lexington is 22,000 units short across all incomes. A large majority need to be affordable for those making less than 80% of area median income of 62,908 or less than 50,326 a year according to a study from EHI Consultants.
"Since then, what we've been doing is digesting that, and looking at it, you know, we've already had an affordable housing program for a decade," Lanter said.
For more than a decade, Rick McQuady has served as the city's affordable housing manager, creating partnerships with public and private organizations to address affordable housing needs in Fayette County.
The city's annual funding is at $5 million for the affordable housing fund.
"We've funded almost 3,700 units, so that's approximately $14,500 a unit. We're a gap financier. We provide that piece that helps to make these deals work. Additionally throughout the ten years, we've made program loans on many of these developments that we've funded. These loans are repaying us now and we get right now, between $500,000 and $600,00 a year just from loan repayments so we can add that to the $5 million so it's $5.6 million that we can allocate for qualified developments in a year. We've had no trouble allocating these dollars. The development community has embraced this and they continue to apply for resources. They're able to locate land or locate developments that are in need of rehab. We've been able to keep this program going. We've funded almost $53 million in city funds that we've used," Lexington Affordable Housing Manager Rick McQuady said.
A major area of focus? Infill and redevelopment.
"Low-hanging fruit, where are the vacant lots in the city? Where are the buildings that can be repurposed?" Lanter said.
One of the spots in Lexington where they're addressing affordable housing is on High Street at Woodland Christian Church. At that site, they're creating 38 safe, affordable housing units.
"That is a really unique new type of development that we're doing here," Lanter said.
In January, we highlighted groundbreaking for that development. Lanter says Lexington Fayette Urban County Government provided the developer, Winterwood Incorporated, with a $3.2 million, thirty-year 2% second mortgage to subsidize development costs.
"We're looking for those kinds of opportunities because they're out there," Lanter added. Those are big priorities for Lexington.
"That'll help us while we do things like work on the expansion zone. I think a lot of people know we're expanding our urban service boundary. We'd love to see affordable developments built out there, mixed-use, mixed-income developments and we're going to do that but that takes a little more time because you have to have the infrastructure out there," Lanter said.
In the meantime, the main focus is inside the boundary with an emphasis on underutilized properties.
