Council needs to re-vote on affordable housing incentive to ensure real affordability

The following is an op-ed piece by FCNC member Amy Clark, published in the 9/24/20 Lexington Herald Leader. Full text below or read it online here:

A promising incentive for affordable housing passed Lexington’s Urban County Council on Sept. 3 before key details were well in place. Council voted unanimously to reduce the parking standards for “affordable” apartments so only one parking space is required for each.

Families of lower income park fewer cars, and Lexington’s premier providers of affordable housing—Holly Wiedemann of AU Associates and Louisville’s prolific LDG Development among them—have especially decried the standard requirement of nearly one space per bedroom for larger apartments. It’s too hard on families with children, a needless waste of land.

What’s not to like, in the new incentive? It turns out the apartments need only be held at the “affordable” rates for five years. After that, they can be rented at market rate. And the definition of affordable, in real numbers today, allows charges up to $1111 monthly for one person and $1588 for a family of four in gross rent including heat and utilities. That feels pretty high for people of limited means who need to rent a home.

Right after voting to adopt the parking reduction, Council started a follow-up measure to better define the terms of affordability. Responding to constituents’ concerns, James Brown moved, Susan Lamb seconded, and the Council voted unanimously to send the definition of affordable (called “mixed-income”) housing back to the Planning Commission for review.

This limping amendment could offer too little, too late. A more coherent and equitable ordinance will get the whole of the issue straight in one piece —not give the developers’ advantage first (parking reduction), and try to set its terms and conditions afterward (tenants’ affordability).

The new parking reduction is linked to a little-used zoning definition that sets households at up to 80 percent of Lexington median income eligible for affordable apartments. Since homeowners fill most of the top half, it’s no wonder that rent-rates indexed to 80 percent of the lower half of incomes still run high. Gross rent is capped at 30 percent of one’s income. Surely an index of 60 percent of median is better (yielding rents of $1191 for four, $834 for one), or even 50 percent ($993 and $695).

A lower income-cap can focus this zoning advantage better, targeting it to meet the housing need that is most critical. If land developers are given incentive to create small new one-car apartments at $1,100 a month and more, will current families of much lower income be displaced from decent older homes?

Bureau of Labor Statistics data indicate that once households reach 80 percent of median, they are parking not one but 1.5 cars on average. Thus 50-60 percent makes a more workable, sustainable index of affordability too. Suburban developers can always add extra parking if desired. But our zoning must set minimum standards adequate to the need: not overburdening public streets with overflow parking, not compromising stormwater management with unplanned paving in redevelopment.

How long should a developer hold the apartments affordable? Financial incentives for affordable housing usually have a 15-year term, regularly renewed to 30 years: loans, reduced interest, tax relief. This makes sense: basically the affordability ends when the money runs out. A zoning incentive is different, however, built into the land available. On a site designed and dedicated for maximum housing and reduced parking, where are the extra cars to go once rents rise to market rate? Realistically, the affordability needs to last the life of the site.

Council members were right to call for a close look at the terms of affordability on this zoning incentive. Five years is too short, and the $1,100-1,600 upper limits on rent are too high. Responding to their constituents, they should reconsider or rescind their vote Thursday, to put real affordability into the ZOTA before it goes into effect. They can put the change on a fast track by initiating it themselves, to bring it back for final vote in a matter of weeks.

Amy Clark takes an active part in Lexington civic affairs, including growth and development concerns affecting neighborhoods throughout the urban county.