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New Albany moving toward temporary pause on new multi-family housing

Exterior of a multifamily development in New Albany
Aprile Rickert
Mayor Jeff Gahan first asked the council to consider the moratorium last month.

New Albany officials are moving toward a moratorium on construction of new apartments and new permits for short-term rentals.

A measure that would put a temporary pause on new multi-family units in New Albany has passed a few hurdles and is heading for a final vote later this month.

The New Albany City Council advanced an ordinance Monday that would pause approval of new multi-family housing units and permits for short-term rentals, like Airbnb, for up to one year.

Mayor Jeff Gahan asked the council to consider it in late January. It went to the full council after the New Albany Plan Commission and a council committee voted last week to recommend it.

Council President Adam Dickey also serves on the committee that forwarded the recommendation.

“New Albany has seen a tremendous amount of growth the last several years [and] we welcome that growth,” Dickey said at a committee meeting on the ordinance last week. “But we also want to make sure that we're growing in the right way and in a balanced way.

The move follows a housing study done in partnership with the University of Louisville that found New Albany’s home ownership rate of 54.5% is lower than other cities, including local peer cities. The study also found that the rate has been in decline “for some time.” It was 59.3% in 2000.

The study also shows that according to information from the American Community Survey, nearly half the housing units built in the city since 1980 have been multi-family.

City leaders say the moratorium will give them an opportunity to look at ways to increase home ownership and explore the impact of multi-family developments and short-term rentals.

“We believe that the American Dream begins with the opportunity to plant roots and purchase a home, and this study confirmed those beliefs,” Gahan said in a recent news release, noting the city previously initiated a program to help incentivize home ownership.

Dickey said city leaders want to make sure the housing stock is balanced and meets the needs for affordable housing, senior housing and single-family developments.

“So this is just a step to try and make sure that that balance is reflected in the code, and that we're able to continue forward in developing New Albany in a way that is conducive to reflect the needs of all of our citizens,” Dickey said.

New Albany Plan Commission Director Scott Wood noted during Monday’s meeting the importance of wise land use.

“There's finite land for development in New Albany and we cannot allow the free market to govern that,” he said. “The moratorium is important because that land can get consumed rather quickly.”

He said city leaders and staff will “certainly be considering affordable housing,” adding that the city has a good portfolio of public and private sector affordable homes.

If the moratorium passes later this month, Wood said the city will move toward hiring a planning consultant to help with updating the comprehensive plan and zoning ordinance.

But some say the goals may be unrealistic and lead to developers looking to other cities.

Jason Schneider is in building material sales. He said more affordable housing is needed.

“I think the one thing that we’re missing is what that number is,” he said during public comment at last week’s plan commission meeting. “What is affordable housing?”

Schneider said it is very hard to build a home between 1,200 square feet and 1,300 square feet that would sell for under $300,000.

“I personally don’t consider a $300,000 house affordable housing,” he said.

Schneider said if people can’t afford houses, developers are not going to build them.

He also noted the difference in the land footprint between types of housing — with much more land needed for single-family homes than multi-family.

“So I am 100% for affordable housing. I just think that you probably need to think through options to be able to still get housing, before we would automatically say, ‘Let's put a stop to it,’” he said. “Because I think putting a stop to apartments or multi-family, you’re pretty much putting a stop to any growth unless you have another route to do it.”

The council is expected to take a final vote on the ordinance at its Feb. 15 meeting.

Coverage of Southern Indiana is funded, in part, by Samtec Inc., the Hazel & Walter T. Bales Foundation, and the Caesars Foundation of Floyd County.

Aprile Rickert is LPM's Southern Indiana reporter. Email Aprile at arickert@lpm.org.

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