For Affordable Housing Backers In Louisville, Long Road Gets Longer
Brenda and Robert Erickson filtered into City Hall last Thursday evening, a few minutes before the Louisville Metro Council began its regular meeting.
For a little more than two hours they sat, watching council members recognize honored guests and debate the nuances of proposed ordinances.
A Republican laughed out loud, interrupting his fellow council member, a Democrat, as he tried to explain his point of view.
Another member abandoned his seat to lounge in the back of the room with a few police officers, expressing his boredom as he greeted the officers.
The meeting adjourned, and the couple stood from their seats and shuffled toward their car. They left without hearing any discussion of the issue they'd come to support.
The Ericksons want a dedicated source of funding for the city's affordable housing trust fund, which provides grants and loans for the development and rehabilitation of housing priced toward low-income Louisvillians.
"I think it's very important," Brenda Erickson said after Thursday's meeting.
Trust fund advocates like the Ericksons consistently pack the chambers for regular meetings; many line up to offer pleas to the council for money to support the fund.
But again this year, it's unlikely their hopes will be fulfilled.
The housing trust fund has received fiscal support from the city in past years through one-off appropriations. But without a dedicated source of funding, the program is limited in its ability to address what advocates call a growing need for affordable housing in Louisville.
Nearly 60,000 households here spend more than 30 percent of their income on housing, and nearly 24,000 of those spend at least 50 percent of their income on housing, according to U.S. Census data.
Families that spend more than 30 percent of their income on housing are considered by the U.S. Department of Housing and Urban Development to be cost-burdened. They may struggle to afford other necessities such as food, clothing and medical care.
Councilman Bill Hollander, a Democrat from District 9, is a longtime supporter of more affordable housing. He said despite the council's lack of action on the issue, the advocates' pleas aren't falling on deaf ears.
"There's no question there is significant support for affordable housing — for a decent, safe place for people to live," Hollander said.
But turning that support into funding isn't so easy, he added.
Housing advocates have long supported raising the insurance premium tax by 1 percent to provide dedicated money to the fund. It's been estimated the tax hike would create more than $10 million for the program, according to Metro government.
Hollander said raising taxes is a tough sell. And opponents have questioned whether it would be an equitable solution.
Hollander said some suburban cities could opt out of contributing money generated by the tax to the housing trust fund.
"It's not a perfect solution, but nobody's come up with a better one," he said.
Christie McCravy is the new executive director of the Louisville Affordable Housing Trust Fund. She echoed Hollander's concerns about raising the insurance premium tax.
McCravy is also concerned about who would be hit the hardest by a tax increase. And she questioned the estimates of how much revenue the tax would actually generate.
She said it's too late in the year to enact a tax hike that would be implemented next year, meaning even if the council does approve such a measure the funding won't come for at least two years.
"We may need to look at some other funding mechanisms," she said.
It's unclear what those other options could be. She floated the idea of the city more stringently enforcing collection of debts it's owed but didn't offer specifics. McCravy said she's trying to avoid making a plea to the state's General Assembly for funding, which "presents another set of issues."
For now, McCravy is working to get a one-time $5 million allocation for the trust fund in the 2016-17 city budget. Hollander said he would push for that in the upcoming negotiations.
Hollander pointed to the success of Lexington's work to increase affordable housing options. There, the city allocates a portion of its general fund for the cause. It was $3 million the first year and $2 million the next two years.
So far, the fund has distributed $5.3 million via grants and loans. It has financed 443 affordable housing units since it was created in September 2014, according to the Lexington Herald-Leader.
"We can do that, too," Hollander said. "And we should."
A spokesman for Mayor Greg Fischer didn't offer any hint of the mayor's interest in supporting the trust fund. The budget process is underway, and Fischer will unveil his proposal at the end of May.
Fischer has made boosting the city's stock of affordable housing a priority. Last year, he championed a $12 million plan to add 1,500 affordable housing units across the city.
Republican Councilwoman Angela Leet, vice chair of the council's budget committee, did not return a request for comment.
Council President David Yates, a Democrat from District 25, said funding the Affordable Housing Trust Fund would be a "major priority" in the upcoming budget process. He said the $5 million request is reasonable, but he declined to say whether that would be the final proposal.
"I want this to be an open negotiation," he said.
The Metro Council is in the midst of an effort to get more roads paved across the city, which Yates said it one of the priorities the council has to balance with increased funds for housing. He said with a nearly $112 million road paving deficit looming, if city leaders continue to "kick that down the road, we will have no discretionary money."
"But again, we cannot ignore our social concerns either, because there is a fiscal price and a compassionate price that we will pay for doing so," he said. "So you've got to continue that balance."
Natalie Harris is president of the Louisville Affordable Housing Trust Fund's board of directors. She said she understands council members' concerns about the road paving deficit.
But she said the city faces a nearly $5.8 billion deficit in affordable housing due to the absence of more than 63,000 needed units. She based those numbers on expiring restrictions on subsidized housing and the number of residents considered cost-burdened by the federal housing department.
"Funds are even more desperately needed for this use in our community," she said.
McCravy said her goal is to establish a continuing stream of $10 million for the trust fund. "But we can make $5 million work," she said.
Such a budget allocation could help leverage funding from private developers, an ongoing effort of the trust fund. But McCravy said she doesn't want to take funding away from other programs or put a burden on the community in funding the city's Affordable Housing Trust Fund.
"It's already burdensome," she said. "The community bears the burden, in general, just by not having housing that is affordable."