A pair of developments slated to bring affordable housing to Louisville’s East End will be the first projects to benefit from a loan program introduced last year by Mayor Greg Fischer. The program, called Louisville CARES, is designed to help developers finance new affordable housing by issuing loans from a $12 million revolving loan fund.

Initial investments will help facilitate the construction of 21 affordable units in Norton Commons, a neighborhood development just east of the Gene Snyder Expressway near Prospect, and a 216-unit development off Billtown Road near the Gene Snyder Expressway in southeast Jefferson County.

The Norton Commons development is set to receive $1.93 million. The development off Billtown Road will get $4 million in assistance, according to Metro government’s economic development department.

Neither site is on a direct public transit route, nor are they within three miles of a large employment center. Those two aspects are high on the city’s list of desired criteria for developments seeking funding from the loan program, according to a scoring workbook provided by Metro government.

“While access to transit and employment centers is an important criteria for approval, there are many others,” said Will Ford, a spokesman for the city’s economic development arm, Louisville Forward.

Each proposed development is scored based on a number of factors, like proximity to a bus line and employment center, as well as its proximity to grocery stores and whether the project supports other major development efforts.

Ford said the Norton Commons project and the Billtown Road project each scored well enough to be funded due to their location in Metro Council districts where less than 1 percent of current housing stock is subsidized. Another highlight of the projects, he said, is that each sets aside units for residents earning 60 percent or less of the area’s median income.

Cathy Hinko, executive director of the Metropolitan Housing Coalition, said she isn’t concerned that these developments aren’t situated on a direct public transit line. Making such an argument, that all affordable housing should be built on a bus line, is “a screen people hide behind” to argue against bringing affordable housing to their neighborhood.

“It is a false concern,” she said.

Hinko said the proposed developments are designed to provide housing for families earning up to $53,000 annually.

“They own at least one car,” she said. “The people at $10 an hour, they may not have a car.”

Christie McCravy, executive director of the Louisville Affordable Housing Trust Fund, echoed that sentiment. She said Louisville lacks a robust public transit system and, because of that, many people, including many poor people, own and depend on a vehicle.

She said diversifying areas that currently have scant affordable housing options is “as important as being close to a job site or being close to bus lines.”

“If we truly, truly want to invest in our community and embrace diversity … we’re going to have to move in to areas that currently do not have TARC lines,” she said. “TARC lines can change, and if we bring the people maybe we can enact that change.”

More Funding For Other Affordable Housing Needed

Both McCravy and Hinko agree these initial investments from the Louisville CARES program serve as proof more funding is needed for the city’s affordable housing trust fund.

The trust fund was established in 2008 as a mechanism to finance the development of affordable housing. It’s struggled to gain a steady stream of revenue since its creation by the Metro Council and has, to date, assisted in the development of about 40 affordable housing units.

McCravy said the design of Louisville CARES makes it tough for developers to take the risk of investing in affordable housing. The low rents they’d be required to charge tenants would compromise their ability to pay back loans, she said.

“When you get into serving the needs of lower-income persons, basically, you’re looking at having to leave some money on the table, or money in the deal, and that’s not possible with Louisville CARES,” she said.

A trust fund, she said, can provide developers with grants that don’t require repayment.

Fischer is proposing spending $2.5 million in public funds to support the Louisville Affordable Housing Trust Fund in the coming fiscal year.

Hinko said the need for fully funded trust continues to surge — the city is short about 60,000 affordable housing units — and Louisville CARES shows developers have the capacity to meet the need when they’re provided with the right kind of assistance.

“That has been one of the issues raised about the Louisville Affordable Housing Trust Fund,” she said. “We have developers capable of delivering affordable housing if you put the tools out there.”

Jacob Ryan is a reporter for the Kentucky Center for Investigative Reporting.