Leaders with the Louisville Affordable Housing Trust Fund have secured about $500,000, but the fund’s advocates are urging Mayor Greg Fischer to do more to secure annual funding.
The trust fund is meant to give grants and loans for affordable housing activities, such as new construction, home rehabilitation, payment assistance and emergency repair.
About 92,000 Louisville families cannot afford their rent or mortgage, according to a report assessment compiled by the group. The report noted that that number is more than four times the capacity of the KFC Yum Center.
The city made a one-time contribution of $100,000 to the fund that was matched from the business community, in addition to another $250,000 from Kentucky’s National Mortgage Settlement.
The Metro Council created the trust fund in 2008 with a $10 million goal per year, but the initiative has struggled to gain a financial foothold as the housing crisis spreads. According to a report assessment compiled by the group, around 92,000 Louisville families cannot afford their rent or mortgage, noting that number is more than four times the capacity of the KFC Yum Center.
Fischer said investing in affordable housing is important, but stressed that due to large budget deficits Metro Government will have to find other revenue streams to meet its goals.
“It’s this type of public-private partnership that are making almost everything happen in today’s world,” he said. “There’s just not enough money in the public coffers — and that’s us — and the public is not racing up to me saying, ‘We need to raise taxes for our general fund.’ So until that happens we’re going to need to continue to have partnerships to get this done.
Instead of money from the general fund, Fischer outlined his push for the state to adopt a local option sales tax, which he said could provide the city with necessary revenue to fully fund the initiative.
The blue ribbon tax commission formed by Governor Steve Beshear endorsed that idea this week, saying local communities should have the ability to fund specific projects.
Mayor’s Proposal Criticized
But leaders with the grassroots organization Citizens of Louisville Organized and United Together, which has been a critic of Fischer’s and heavily involved in the affordable housing movement, argue that the mayor’s funding idea faces several hurdles, namely a change to the state constitution.
CLOUT President Chris Kolb said Fischer misled the group about securing permanent annual funding and is avoiding tough decisions as housing problems deepen, adding that a local option would be a regressive tax on low-income residents.
“Mayor Fischer knows this,” Kolb said. “So it’s a mystery to us why he’s stalling while every year thousands more working people, school children and families in Louisville suffer. That’s not very compassionat, Mr. Mayor. In fact, it’s callousness toward working people, families, seniors and veterans in our community who desperately need a place to call home.”
Among the several housing needs noted in the report, the trust fund’s board said they still lack a source of dedicated and ongoing public funding. The board recommends a one-percent increase to the city’s insurance premium tax as a dedicated public source that would generate an estimated $9.7 million annually, and warns that without proper funding it will not be able to meet its goals.
Other city officials have said Fischer’s proposal to use the local option sales tax to pay for the trust fund is not a bad idea, but that the city needs to address the housing crisis now.
“Let’s look at are there ways we can immediately on a local level, without having to go to Frankfort, that you and the administration and we on the Metro Council can fill in the gaps until we get there,” Councilwoman Tina Ward-Pugh, D-9, who sits on the trust fund board, told Fischer. “Because as you said, we don’t have time to waste and we don’t have people to waste. And affordable housing is a desperate need.”
The Problem, at a Glance
Other key findings in the report:
- 1 in 10 Jefferson County Public School students were homeless in the 2011-12 school year, indicating a 44 percent increase.
- Louisville Metro needs to develop nearly 58,000 new affordable apartments in order to meet market demand.
- 37 percent of Louisville’s workforce has a median income below what is needed to afford rent and utilities for a two-bedroom apartment at market rate in Louisville.
- Homeownership rates in Louisville have declined to the lowest rate in five years, 63 percent.
Fischer says he remains supportive of the trust fund, but that more creative and alternative revenue streams have to be obtained first.
“It’s not going to be happening out of our general fund dollars, folks. Because they’re depleted,” he said. “We have to think of better ways that we’re more efficient but also raise revenue at the same time.”