"Before two years ago, Catie Lasley wasn't sold on her opportunities for homeownership in Lexington.
Lasley, human resources manager of employment at the University of Kentucky, was a 28-year-old, new mother at the time. Her husband was tired of renting, but Lasley wasn't sure that they could handle the expense of buying a house.
It wasn't until she learned that her employer, the University of Kentucky, was willing to kick in money for her down payment and closing costs that the young professional decided she was ready to make the investment."It was really great, because we hadn't had any money saved up for a down payment or anything like that," Lasley said. "I was dragging my feet on searching for a home to purchase until I learned about the employer-assisted housing program and saw that there was some help through the university."
Through UK's "Live Where You Work" employer-assisted housing program, Lasley was eligible for a five-year forgivable loan for five percent of her home price, up to $15,000, along with free counseling on homeownership.
Today, she and her husband, who handles the primary caregiving for their daughter, are the owners of a 1,000-square-foot, two-bedroom home on Bucoto Court, a cul-de-sac off South Broadway, which they bought in 2005 for $94,000. Lasley can walk to work, and the family can enjoy the occasional stroll to downtown to visit the farmers market or catch the fireworks on the Fourth of July.
But happy endings, or more appropriately beginnings, like Lasley's are a surprisingly rare occurrence, considering the financial incentives offered to employees of UK and city government for buying a home in the downtown area. Young professionals like Lasley are the type of talent that local businesses, and the city in general, hope to retain for the good of the economy, and most agree that ample and well-suited housing opportunities play a part in making the city attractive to them.
But aside from the continuing support of local nonprofits, city initiatives aimed at encouraging and maintaining affordability in local housing have for the most part been disjointed, largely dependent on federal and state funding, or sparsely utilized.
The Live Where You Work program, which is funded by UK and the Lexington Fayette Urban County Government to provide housing assistance to their own employees, has been one of the more creative attempts to address local workforce housing in recent years. Since the program was launched in 2003, however, a total of 12 UK employees have used it to purchase homes. For the LFUCG version, only five employees have received the financial assistance, although both programs report that dozens more have used the free counseling services and eventually purchased homes either through other lenders or in other neighborhoods.
"It kind of got off to a slow start," said Paula King, director of the city's division of community development. Currently, seven candidates are enrolled in Live Where You Work's counseling program. "People are still interested. . If we have it available, the opportunity for people to at least go through the counseling to be successful homeowners, in our opinion that's a success. That's really what it's all about."
Matching up qualifying employees and their resources with the property available within the program's boundaries close to UK has been a big part of the challenge, said Joey Payne, director of employee benefits and self-funded plans at UK. While the area offers a range of home prices, many of the lower-priced units for sale often require additional time or money, such as former rental properties.
Both UK and the city view the Live Where You Work program, a concept originally championed by the Lexington Downtown Development Authority, as a worthwhile investment that they expect to be more widely used in coming years. Employer-assisted housing initiatives, however, are only one of many innovative tools communities across the country are using to ensure that a diverse and affordable mix of housing options are available for a thriving and productive workforce.
As Lexington considers how it will house its own workforce of the future, government officials, business people and nonprofit leaders alike are looking for a more holistic approach to housing affordability for the city, along with more creative solutions.
As part of the Comprehensive Plan, one of the implementation elements adopted by the planning commission in April was aimed at the development of a more defined affordable housing program for the city, said Jim Duncan, planning manager in the city's division of planning. The implementation table for the Comprehensive Plan calls for a broad-based study of the city's barriers to affordable housing as well as a look at the possible mitigating techniques.
"That's something that we will be working on over the next year or so," Duncan said. "The numbers do not indicate that we are yet at a crisis stage with our housing affordability in Lexington, although there are clearly barriers to affordable housing ," Duncan said. "Our big concern was that we don't want to get into a crisis situation."
Currently, multiple groups within city government are studying how to incorporate more concerted designs for affordable housing into the city's future planning efforts.
Eighth District City Council member George Myers, who recently initiated a task force to look at how affordable housing stipulations could be part of city tax incentive packages for future developments, said the issue has been gaining more attention among council members and in the overall community.
"I think what we really need is a comprehensive look at affordable housing," Myers said. "We want to make sure that Lexington doesn't become a Boulder and that families can still provide housing for their children and themselves and stay in our great city." Housing in Boulder, Colo., has become so expensive even many key city officials can no longer afford to live within the city limits.
In working toward that goal, the Comprehensive Plan's affordable housing implementation element identified 12 possible approaches to the affordable housing challenge (see accompanying chart). Many have been used successfully in other communities, and some have already been implemented in Lexington to some degree.
One of the city's most recent successes in the arena of affordable housing has been the East End community redevelopment project funded in large part through a $20 million Hope VI federal grant. The redevelopment plan already underway for the 80-acre site of the former Bluegrass-Aspendale housing complex calls for building back 260 units of affordable housing for rent, including townhouses, apartments and duplexes, along with a subdivision of 103 single-family homes for ownership, and numerous additional improvements to be built over the next five years.
Not all past efforts by the city to build more affordable housing into the system have been utilized. When the Urban Services Boundary was last expanded, city planners included "density bonuses" for affordable housing units that would be built in the newly added expansion area. The intent was to reward developers who included affordable housing in their projects by giving them the chance to include additional units without having to purchase more land. To date, however, not one developer has utilized the incentive.
For the most part, the incentive has not been used because it did not fit with the demands for housing that have dominated the market since the expansion area was created, said Todd Johnson, vice president of the Lexington Home Builders Association.
"(The developers in the expansion area) really haven't had to go looking for density," Johnson said. "The demand has been for single-family homes."
Some higher-density projects have cropped up recently as buyers have shown more interest, but without the need for the added density bonus. Developers have already seen the cost of available lots going up since the decision was made not to expand the urban services boundary, Johnson said, and that places considerable pressure on builders trying to control their bottom line.
"Everybody wants to provide housing at the most affordable and economical price that they can," Johnson said. "But when you have things in place that are out of your control — like land price, for example — when you're paying $45,000 for a 40-foot lot, it's hard to meet most definitions of workforce housing And that's usually driven by regulatory measures."
In addition, Johnson pointed out, the challenges of maintaining the city's overall housing affordability, and especially the separate and more targeted topic of subsidized affordable housing, encompass far more than simply the price of new homes in a community.
"It's not necessarily a new construction issue. It's a community issue," Johnson said. "It's a societal issue that needs to be addressed, and I don't think you can look to one source to remedy it."
P.G. Peeples and Norman Franklin have been on the front lines of that societal issue for more than two decades as leaders of both the Urban League and the Fayette County Local Development Corporation(FCLDC), which work in partnership to build and rehabilitate property for affordable rental and homeownership units as part of their mission.
Many of the FCLDC's projects over the years have focused on smaller, scattered sites throughout the city, some of which had not seen new nearby development in decades. In recent years, the group has focused on creating affordable rental units, because that is where they have found the greatest immediate need.
The cost of land has increased, said Franklin, vice president of internal operations for the Urban League, and it is also becoming more difficult to find suitable property that can be acquired and developed.
The challenge of acquisition is one reason why Peeples, Urban League president and CEO, and others involved with affordable housing in Lexington are hoping that their initiatives are given a priority with the use of the city's $2 million set aside for infill and redevelopment land acquisition.
"To say the least, we are very excited about the possibility of being able to benefit," Peeples said. For his part, Peeples hopes to see the allocation become a permanent part of the general budget and not just a one-time deal for the city. He is also very encouraged by the city's interest in trying new approaches from other communities.
"Those are the kind of initiatives I hope will emanate out of these infill and redevelopment committees," Peeples said. "If something is working in other cities, it doesn't bother me to duplicate it. I think the cities that are making a dent in (the need for affordable housing) are the ones who are daring to be different."
The final installment of Business Lexington's series of articles on housing affordability will look at how new approaches and initiatives have been used in other cities across the state and the nation.
Twelve approaches to affordable housing
- from the Implementation Element of the 2006-2007 Comprehensive Plan
There are myriad approaches to increasing the supply of affordable housing that other communities have supported, enabled, or implemented over the past 30 years. These include:
Affordable Housing Trust Fund - is a fund that could be made up of contributions by developers, foundations or individuals, and profits from the sale of public land. The fund would be administered by a nonprofit organization and leveraged by federal and other private funds. The proceeds would be distributed among local affordable housing providers.
Co-Housing - is a community with common facilities, such as kitchens, dining rooms, and living rooms, that is planned, owned, and managed by residents.
Density Bonuses - are especially important incentives for mandatory programs, such as inclusionary zoning.
HOME - provides federal funds for a variety of affordable housing initiatives.
HOPE VI - provides federal funds for public housing initiatives.
Inclusionary Zoning - requires housing developers to set aside a percentage of new units for low- and moderate-income households.
Land Banking - involves the acquisition of land for a public purpose. Oftentimes, the purpose is for open space in advance of urbanization, but it can also be applied to redevelopment sites where deed restrictions or land trusts could be employed for long-term affordable housing development.
Land Trusts - take the cost of land out of the price of housing. The land is not sold but managed by an organization that includes the homeowners.
Low-Income Housing Tax Credits - provide tax credits to developers of affordable housing.
Revised Zoning and Subdivision Regulations - that address density, use, accessory dwelling structures.
Streamlined Development Review - for developments with an affordable housing component.
Tax Abatements - discourage displacement of existing residents in the face of gentrification and higher property taxes. "