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Louisville Lawmakers Call For Hearings Over Imbalances in Housing Funds

Members of Louisville's General Assembly delegation say they'd like to see legislative hearings on why the city has gotten less funding through federal Low-Income Housing Tax Credits than other parts of the state.

The credits are distributed annually by the Kentucky Housing Corporation to help fund developments of affordable housing across the state. The U.S. Department of Housing and Urban Development considers the credits to be the most important resource for creating such housing.

Distribution of the credits is tracked by congressional district, each of which have roughly the same population.

Since 2010, the Third Congressional District, which covers most of Louisville, has received funding assistance from Low-Income Housing Tax Credits for 13 projects. In that same period, the state's other five congressional districts were given funding for nearly double the number of projects, WFPL News reported recently.

State Sen. Gerald Neal, a Louisville Democrat, said the disparity raises the question of whether the Kentucky Housing Corporation's methodology for awarding the credits is equitable.

"We're not just dealing with the question of how much money is being allocated where, but whether or not the agency is complying with its mandate, and part of that mandate is to make those distributions equitably," he said.

The Kentucky Housing Corporation pledges to “provide an equitable distribution” of the credits across the state.

Neal, whose district includes several high-poverty neighborhoods in western Louisville, said he believes there is no ill intent at the state housing corporation. But he said that doesn't rule out the notion that process may not align with policy.

Neal said the concerns regarding the distribution of Low-Income Housing Tax Credits warrant an examination by the legislature.

"After all, human beings are affected across the commonwealth, funds are finite, and it's necessary that we do this in a fair and equitable manner," he said.

State Rep. Steve Riggs, a Louisville Democrat, chairs the General Assembly's local government committee, which he said would be a natural place for a hearing on the issue -- "maybe even before the session starts," he said.

Riggs said his concerns are multifaceted. Not only does the disproportionate distribution of the tax credits appear alarming, he's also interested in why so few applications were submitted from  the Third Congressional District in the most recent funding year, he said.

In 2015, just three applications were submitted for development projects in the Third District, according to data from the Kentucky Housing Corporation. None of them received funding. No fewer than five applications came from each of the state's other congressional districts.

"I don't know if I would call it getting shortchanged if we haven't sent them enough applications," Riggs said.

In the Second and Fourth districts, at least 50 percent of all applications were approved. In the First and Sixth districts, more than 60 percent of applications were approved. And nearly a third of the $10.2 million in tax credit funds distributed in 2015 went to projects in the Sixth District, which includes Lexington and Frankfort, according to data from the Kentucky Housing Corporation.

Riggs said the allocations make it seem as though KHC "violated their own policy" of equal distribution of the federal funds across congressional districts.

"I'm interested in trying to figure out a little more about their scoring process and why they decided not to follow their own policy," he said.

Riggs said the Jefferson County delegation should encourage developers and nonprofit agencies interested in building more affordable housing to submit more applications for the credits.

"We need to have the most of any district," he said.

State Rep. Phil Moffett, a Louisville Republican, said the concern that Jefferson County is being shortchanged is an "interesting problem."

He said he'd be willing to discuss how to address the issue with fellow legislators, but he isn't tuned in to the issue of affordable housing in Louisville.

Mayor Greg Fischer told WFPL he wants to focus on ways to bring more funding for affordable housing to projects in the city. As Metro government ramps up its own efforts to boost the stock of affordable housing, now is not the time to leave any available funds on the table, he said.

"It appears that we should be getting more credits than what we have received," he said.

Jacob Ryan is the managing editor of the Kentucky Center for Investigative reporting. He's an award-winning investigative reporter who joined LPM in 2014. Email Jacob at jryan@lpm.org.

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