Lexington has a rare opportunity to deliver a one-two punch to the housing crisis – why it probably won’t happen

Welcome back for a short, sweet Lexington Meta. Lexington Meta is an irregular opinion column written by The Lexington Times Web Editor, Paul Oliva.

Unless you’ve been living under a rock for the last couple years, you’re aware that Lexington is in the middle of a housing affordability crisis. While local rent growth has cooled in recent months, rents in Lexington still rose 3.2% last month and over 12% between July and August 2022, according to ApartmentList. One report says the month-over-month rent growth in Lexington ranks number one among the nation’s 100 largest cities.

Supply and Demand

When talking about housing affordability in capitalism, cutting demand is rarely seen as an acceptable option because a stagnant or shrinking population doesn’t align with the capitalistic goals of increasing wealth, productivity, and growing the local tax base. As such, this column will focus on options available to increase housing supply in Lexington.

The High-Density of NIMBYs

One of the ideas that advocates of urbanism frequently float is simply increasing density in existing low-density areas. Simply replace all R-1 single-family zoning with R-3 multi-family zoning, build a four-plex on every block, and “poof,” housing crisis solved. Or so the theory goes. Another common idea is to increase usage of R-5 residential high-rise zoning and begin building high-rise apartments in previously low-density neighborhoods near downtown like Kenwick and Bell Court.

Let me be clear: replacing R-1 zones with R-3 and building more high rises near downtown are great ideas. The problem is that these ideas are impractical and impossible to implement in the near term due to opposition from people who currently live in these areas.

Not-In-My-Backyard (NIMBY) activism can apply to a lot of issues. With housing, what we frequently see is that long term residents of low-density neighborhoods often oppose new high-density zoning and development. Many NIMBYists worry about changes new development could bring to their neighborhood like traffic, noise, and crime. Others use it as a form of social exclusion: they do not want to see more people from different backgrounds moving into their neighborhood and may believe that their neighborhood is better off as it is. It is also important to note that not all NIMBYs are motivated by the same reasons. Some NIMBYs may have legitimate concerns about the impact of high-density development, while others may simply be opposed to change for its own sake.

While increasing density of existing residential zones is an attractive option with a lot of potential, it won’t offer much relief to Lexington renters in the short term due to opposition from NIMBYists. While it may work out in the long term, other options must be considered while we try to get the NIMBYists to come around.

Expanding the Urban Service Boundary

According to LFUCG, “The urban service area is the part of the county where urban services (city garbage collection, street lights, street sweeping) are provided and a higher density for development is allowed. The boundary is defined by Lexington-Fayette Urban County Council Ordinance. The boundary was originally approved in 1958 and has been occasionally modified. Any expansion to the boundary is considered during Division of Planning’s comprehensive plan review process, but the recommendation from Planning must receive Urban County Council approval for alteration.”

Obviously, expanding the urban service boundary is a surefire way to increase housing supply. By opening up new land for high-density development, Lexington would see a housing construction boom in the near term, relieving pressure on rising rents. Expanding the USB would not be a panacea for Lexington’s affordable housing crisis, however, it would be one tool that the city could use to increase the supply of housing and make it more affordable for people of all income levels.

Council recently began their review of the Planning Commission’s 2045 Comprehensive Plan, which does NOT recommend expanding the Urban Service Boundary. While Council has the power to alter the plan to change this, I see this eventuality as unlikely, mostly due to the influence of the horse industry.

Fayette Alliance, a nonprofit advocating for “smart growth,” is staunchly opposed to expanding Lexington’s urban service boundary. The organization’s board chair is listed as Greg Goodman, owner of Mt. Brilliant Horse Farm.

A review of campaign contributions shows that a Greg Goodman (and his family members) of Mt. Brilliant Farm gave substantial amounts of campaign cash to the following council members:

• Jennifer Reynolds ($2,000)
• Whitney Baxter ($2,000)
• Liz Sheehan ($2,000)
• Kathy Plomin ($2,000)
• James Brown ($2,000)
• Hannah LeGris ($2,000)
• Chuck Ellinger ($2,000)

Additionally, Vice Mayor Dan Wu accepted at least $12,000 from the prominent horse industry family and Mayor Linda Gorton accepted at least $16,000 for the 2022 election.

Wu and the new Council have publicly been very cozy with Fayette Alliance and the horse industry in general. In February, they were hosted at a horse farm for a special “smart growth” seminar, and the often cryptic Wu even seemed to echo some of their talking points in a recent Herald-Leader interview.

Call me cynical, but it looks like this decision was made before the votes were counted! It’s worth noting that Goodman donated to the opponents of CMs Shayla Lynch and Brenda Monarrez, so they might have some wiggle room, but it appears as if the horse industry has already bought the 8 council votes plus the mayor that they need to keep the boundary in place for now.

Funding more affordable housing

Mayor Gorton’s proposed budget for FY 2024 includes $2 million for affordable housing. Hey, that’s pretty good right? Well, yes and no. While $2 million represents a decent chunk of change, it’s less than half of what one group wants.

BUILD, an interfaith advocacy group, has called for up to $10 million, but at least 1%, of the city’s budget to be allocated to affordable housing. If you’re keeping score at home, 1% of Gorton’s proposed $500 million budget is $5 million, so the proposal falls $3M short there.

CM James Brown committed to Build last year to fight for at least $10 million a year for the affordable housing fund, and has sought to formalize the suggested 1% funding level, proposing an ordinance recently that would do just that. However, since the ordinance isn’t law yet, the 1% is still just a suggestion, as the mayor’s budget makes clear.

The city’s affordable housing fund is used to finance affordable housing developments, so a 150% increase would represent that much more development of affordable housing. Instead, however, the mayor’s budget uses money that could be earmarked for housing to significantly increase the police department’s budget, “reimagine” Phoenix Park, and build a new senior center, among other things.

The affordable housing budget could be a sticking point for some on council, though. The previously mentioned ordinance’s sponsor, James Brown, could lead a push of progressive Council Members seeking more funds for housing. Look for CMs Fogle, LeGris, Sheehan, and Reynolds to support Brown’s push, with Lynch and Wu possibly trickling in if it looks like the political winds are favorable. Ultimately though, I think the mayor’s political inertia will be too much to overcome here.

UPDATE: I may have spoken too soon: James Brown, Chuck Ellinger, Tayna Fogle, Shayla Lynch, Dave Sevigny, Jennifer Reynolds, and Denise Gray all committed to supporting an ordinance mandating the 1% funding level at a recent public meeting hosted by BUILD. It’s not clear whether they will push for that level of funding in this year’s budget, however.

Missed opportunities

While it seems likely to me that Lexington will miss this opportunity to land a one-two punch against our current housing affordability crisis, it is still important the public be aware of these issues and continue to push their elected officials to make the right decisions for our community. In a political climate where elected officials derisively refer to their non-contributing constituents as “civilians Dans,” but attend lavish educational seminars put on by their donors, all we can do is stay awake and stay loud.