May 15, 2015. The Courier-Journal.
Louisville Mayor Greg Fischer is proposing an ambitious $12 million initiative that would use a mix of city funds and a 30-year bond to create 1,500 affordable housing units over two years.
The mayor launched Louisville Creating Affordable Residences for Economic Success (CARES) on Friday as part of his upcoming budget proposal to help the estimated 60,000 households in need of affordable housing because they spend at least one-third of their income on housing, according to Fischer’s office.
Of those families, nearly 24,000 are considered severely burdened because they will spend half of their earnings on housing costs.
“Having decent, safe and affordable housing is the most basic need for families,” he said. “Yet, in Louisville, that home is out of reach for too many of our families, too many of our citizens and too many of our children. This is a down payment on a long-term plan to address that challenge.”
Louisville CARES would establish an $11 million evolving loan pool that nonprofit and for-profit developers could use to help build multi-family units across the city. If approved by the Metro Council, the loan fund would be available on a competitive basis to home builders at the end of the year and the first funds could be awarded early next year.
The initiative seeks to create roughly 750 new affordable units and, through housing policies, convert another 750 units into affordable units as people who were paying more then move in, according to Fischer’s office.
The mayor described the 1,500 units as a “down payment” toward a goal of creating or retaining 24,000 affordable units by 2030.
Under the mayor’s plan, metro government would also set aside $1 million to purchase land for the construction of affordable housing near major job centers.
Fischer said his plan would be a boost to the local economy, including plumbers, electricians, masons and other home builders.
“If I can’t win you over on the moral argument, we simply cannot be economically competitive without it,” Fischer said. “We cannot create the quality workforce that businesses require if people don’t have a stable home in which to raise a family.”
The new initiative would be run by Louisville Forward, the city’s development arm, with an annual $1.3 million in general funds going toward its administration and debt service. It will receive strategic direction from the Louisville Affordable Housing Trust Fund, which will help draft parameters for the loans and review developer’s applications.
Housing advocates in attendance praised the mayor’s plan though some grassroots leaders who have petitioned for more affordable housing bemoaned the lack of a dedicated revenue stream for the trust fund.
“While it has taken longer than it should have, and while this is only a first step that does not yet meet the goal of investing $10 million per year, this signals that CLOUT has succeeded in communicating to Mayor Fischer that something has to be done now by us locally,” said the Rev. Larry Sykes, co-president of the faith-based Citizens of Louisville Organized and United Together.
“Citizens must continue to hold Mayor Fischer and Metro Council accountable to their commitment to secure ongoing dedicated public revenue, and CLOUT is committed to do that by continuing to push for a one percentage point increase in the insurance premium tax,” he said.
Budget Committee Chairwoman Cheri Bryant Hamilton, 5th-District, said council members will move forward on a proposed financial impact study to raise the insurance premium tax to support the trust fund and will carefully review the 30-year bond and its financial consequences in the mayor’s plan during their June budget hearings.
“It’s always good to get the buy-in upfront,” said Hamilton, who was briefed on the initiative in the days before the mayor’s announcement. “And I think most of the council members support this, but dealing with the budget you never know.”
The mayor is scheduled to deliver his budget address May 28 at City Hall.