Kentucky investing $223 million to rebuild rental housing in tornado-impacted Western Kentucky
Republished from Kentucky Lantern
Kentucky Gov. Andy Beshear alongside leaders from the state’s housing corporation and local communities on Monday announced more than $223 million in bonds and grants will be invested to replenish rental housing in Bowling Green and other Western Kentucky communities impacted by tornadoes.
Much of the region’s rental housing stock, particularly homes accessible to low-income families, including in Mayfield and Dawson Springs, was destroyed by a devastating tornado outbreak in December 2021. Local leaders have said the region suffered from a housing shortage even before the tornado outbreak.
Mayfield Mayor Kathy O’Nan said it was “heartwarming” that two of the rental housing developments to be funded in the Graves County seat will create homes for “the most vulnerable” in her community.
“It was those people who lived in the subpar rental homes that are now still struggling,” O’Nan said. “What will come from our community to rebuild not only Western Kentucky but add to our commonwealth as a whole will be well worth every dollar invested.”
Plans call for 953 rental units to be built by private housing developers across Mayfield (122 units), Dawson Springs (88 units), Madisonville (32 units), Hopkinsville (76 units) and Bowling Green (635 units). The housing developments will be income-restricted to be accessible for moderate to low-income families with most rental units having two to three bedrooms, according to a release from the governor’s office.
About 60% of the invested funding, about $135 million, will come from tax-exempt bonds issued to private housing developers by the Kentucky Housing Corp., the state’s public housing corporation. Another almost $60 million in federal grant funding is being made available by the Kentucky Department for Local Government. That grant is a large chunk of funding received last year from the U.S. Department of Housing and Urban Development. Other funding sources include state and national housing trust funds, another federal grant and projected equity from tax credits.
Will help Bowling Green continue ‘historic growth,’ says Beshear
Wendy Smith, deputy executive director of housing programs at the Kentucky Housing Corporation, said developers taking advantage of the government financing must agree to accept low-income housing vouchers. Smith said the potential rent range for these units is federally determined by county which would likely mean a two-bedroom apartment will go for $750 to $900 a month. Smith said it would likely be 18 months to 24 months before prospective tenants would be able to move in.
The private housing developments receiving the funding include Leitchfield-based Wabuck Development Company, Louisville-based SOCAYR Inc., Louisville-based LDG Multifamily LLC and Lexington-based AU Associates Inc.
Winston Miller, the chief executive officer of the Kentucky Housing Corporation, called the funding announcement “historic” because of the amount of housing being constructed along with what he said was the unprecedented combining of federal grant funding with bonds issued by the corporation.
“To keep up with the economic and job growth, Kentucky needs to build more housing units. Today’s announcement of the 953 units is a very significant step in closing the supply gap that exists in West Kentucky,” Miller said.
Beshear said the construction of rental housing in Bowling Green, which is receiving about two thirds of the new construction, is “absolutely necessary” to help the city continue “historic growth.” He said state officials believed the funding announcement to be the largest housing development effort in Western Kentucky in history.
“A home is more than four walls. It’s the security of raising your family, and for those that lost the place they were living, a new unit, a new home means so much,” Beshear said.
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