Council to review Lexington's efforts on affordable housing

During the April 14th Social Services and Public Safety Committee, Urban County Councilmembers will get an update on Lexington's Affordable Housing Fund.

The fund, originally created in 2014, has been used to help preserve and construct 3,826 affordable housing units since its inception. Many serve Lexington's most vulnerable residents, including people experiencing substance use issues and those at risk of becoming homeless.

However, as a report from Affordable Housing Manager Richard McQuady will show, development faces significant obstacles, such as rising costs and difficulty acquiring suitable land.

In 2024, an affordable housing needs assessment conducted by EHI Consultants found that Lexington needs about 22,000 more housing units to meet demand. Of that amount, it needs 17,005 units for households earning 80% or less of the area median income.

What is Lexington's Affordable Housing Fund?

As defined by the fund's report included in meeting materials, affordable housing costs no more than 30% of a household's income. That includes costs such as rent, utilities, mortgage payments, taxes, and insurance.

Lexington's Affordable Housing Fund targets households with incomes at or below 80% of the area median income. For a household of four people, that's an annual income of $81,900, according to the report. The same size household earning 60% of the area median income would be making $61,440 annually.

According to the report, the fund exists to help leverage public and private investment in affordable housing. Its resources are used to reduce debt service costs for developers, resulting in lower rents and mortgage payments for tenants and homeowners

Since fiscal year 2015, Lexington's Mayor and its Urban County Council have allocated $36,065,705 to the Affordable Housing Fund, supporting a total of 3,826 affordable housing units at various income levels.

Roughly 42% of the units are reserved for special needs, such as housing for the elderly or disabled, people at risk of homelessness, veterans, and people facing substance use disorder.

What's next for the fund?

As the report notes, Lexington confronts several obstacles to develop more affordable housing, including interest rates, increased costs for property management, rising construction costs, and difficulties in acquiring affordable land suitable for development.

Still, the report notes Lexington has several new development projects.

That includes a recent project by Woodland Christian Church, which partnered with the developer Winterwood Inc. on a project to restore the church and develop housing for low-income seniors.

As part of its goals heading into fiscal year 2027, the program is targeting additional housing units for households at or below 30% of area median income. For an individual, that's an income of $21,500 a year, according to the report.

Examples include an affordable housing development planned for Transylvania University's Marquard Field Complex.