Lexington developers push for tax credits to increase Kentucky housing stock
Republished from WEKU.
Developers who are collaborating to create a grouping of 200 affordable housing units in Lexington told Kentucky lawmakers Tuesday the state needs more collaboratives like theirs to solve the housing crisis in Kentucky. In the two-year state budget approved this year, the legislature appropriated $10 million for the project.
Developer Zach Worsham, Vice President of Winterwood Inc, called for a tax credit program like those that exist in dozens of other states to provide a credit for low-income housing. It mirrors an existing federal program, created by the Tax Reform Act of 1986. Worsham said that such a program would have been a boon for their planning 200-unit project.
“If Kentucky had a state tax credit that mirrors some of our neighboring states, the equity that the affordable multifamily housing developers would have been able to generate towards these projects would have been close to $8 million,” Worsham said.
According to the National Low-Income Housing Coalition, 66% of extremely low income Kentuckians are severely cost burdened, meaning they are spending more than half of their income on housing.
The median home price in Lexington is $310,000 — and while median home prices over the last decade have doubled in the city, median wages have only increased roughly 30%, according to the group of developers. Johan Graham, the owner of developer AU Associates, said he believes housing costs are unlikely to come down — but supply needs to increase to keep them from going up even more.
“Maybe the only way to do that is to produce — produce more units, to produce more supply in the marketplace, which may finally catch up with the demand and equalize prices a little bit,” Graham said. “It’s probably never coming down.”
Darryl Neher, CEO of Lexington Habitat for Humanity, said housing and lot prices have also squeezed his organization. He said lots that once cost from $20,000 to $30,000 are now going for $55,000 or more.
He called for more funding for the state’s Affordable Housing Trust Fund and the Rural Housing Trust Fund. In the two-year budget approved this year, the legislature appropriated $5 million each year for the Rural Housing Trust Fund. No funds were allocated to the statewide fund.
“[The Kentucky Housing Corporation] provides us immense flexibility in the use of those dollars. That flexibility is invaluable to us as a non profit developer, and so please, I would encourage you to increase that investment to the Affordable Housing Trust Fund,” Neher said.
State government and politics reporting is supported in part by the Corporation for Public Broadcasting.
Originally published by WEKU.
Republished with permission.
