- Lexington locally funds affordable housing because there are over 6,000 full-time working households that have trouble finding housing that is affordable in Lexington.
- This is because of two trends in Lexington
- The cost of housing is rising.
- Base wages aren’t increasing.
- This forces these households into either high-priced or substandard lower-priced housing.
- Much of the federal funding that is available is difficult to work with. Local subsidies can make development cheaper, while requiring developers make their development affordable for low-wage working households without creating significant additional burdens for developers.
Why does this matter?
- Lexington’s affordable housing supply is vastly inadequate. Our city has a 6,000 unit gap of AH units, and loses around 400 units per year.
- Studies show that access to high-quality affordable housing can improve health outcomes, decrease income inequality, and spur economic development. Conversely, lack of access to affordable housing has grave consequences.
- Without local investment in affordable housing subsidies it can be difficult for developers to simply build cheaper housing, largely because development costs are fixed. This tool from the Urban Institute makes the Affordable Housing cost equation easier to grasp.
- Localized investment in affordable housing gets results. A city-commissioned study from Commonwealth Economics indicated that a $4 million investment in an Affordable Housing Fund would create 470 housing opportunities, 363 new jobs, and $43.3 million in economic activity.
What is the context?
- The reason Lexington’s housing market has this gap is a combination of fast-rising home/rental prices and slow wage growth for low-wage, full-time workers.
- From 1990–2014, local rents increased so much that more than 28,000 apartment units in Lexington that used to be affordable to low-wage workers weren’t any longer.
- Home prices are rising largely due to Lexington’s success in attracting and keeping talented workers and the mid-to-high-paying jobs that come with them.
- Lexington funds affordable housing at a rate of around $2 million per year. This is significantly less money than the city-commissioned study recommended. According to the czb study, it would cost around $19.8 million per year for ten years to ensure affordable housing for all.
- After that, it would cost around $2.4M to keep up with the amount of units that become unaffordable each year.
How can I get involved?
- Talk to your friends, family, and neighbors about how they feel about housing issues in Lexington.
- Attend your Neighborhood Association Meeting. If you don’t know what your neighborhood association is, talk to your council member.
- Get in touch with your council member–your council member can let you know what they are doing around this issue. You can find out who your council member is here.
- Contact members of the Affordable Housing Governing Board–you can find out who they are here.
- Show up to an Affordable Housing Governing Board Meeting–they meet quarterly. You can find the schedule here.
- Center for Housing Policy - The Role of Affordable Housing in Creating Jobs and Stimulating Local Economic Development: A Review of the Literature
- Brookings Institution - City and metropolitan inequality on the rise, driven by declining incomes
- World Resources Institute - The Crisis in Affordable Housing Is a Problem for Cities Everywhere
- Urban Institute - The Cost of Affordable Housing
- Commonwealth Economics - Lexington/Fayette Affordable Housing Trust Fund Fiscal, Economic, and Social Impact Study
- czb - Lexington's Affordable Housing Challenge and Potential Strategy