By Ray Daniels, Lexington For Everyone Board Chair, and Transylvania University President Brien Lewis; Published in the Lexington Herald-Leader on January 18, 2024
Shelter is a basic necessity. But a place to call home is much more than that. It’s where stability starts and memories are made.
But all too often and far more frequently, Lexingtonians – especially those with lower incomes – face overwhelming obstacles in finding housing they can afford.
The challenges are many and multi-faceted, which is the case with all problems that are difficult to solve.
That’s why it is going to take private and public organizations from all sectors to come together to create more affordable housing in Lexington. And that’s what we did to create Lexington’s most recent announcement for affordable housing.
Several local banks are working together and will create a joint entity to purchase 12.5 acres of land along Radcliffe Road and Haggard Lane from Transylvania University at a fair price.
Transylvania University understands the need for affordable housing and wants to be part of the solution, so it sacrificed the best price for a fair price because of the purpose of the project.
Because of Transy’s history and location, it is engaged in the community and wants to be part of the solution. It also has seen many staff members having to locate farther away from the university because of rising housing costs. Higher gas prices then create another burden for workers – many of whom have jobs that can’t be done remotely.
Local affordable housing developers will build a combination of housing types, including rental and homeownership opportunities, for families in the 30 percent to 80 percent area median income. (According to the U.S. Census, the AMI in 2022 dollars was $66,000.)
The participating affordable housing developers will repay the banks as the property is developed, which then will allow the banks to reinvest the funds into additional affordable housing projects as a revolving capital fund. The impact will last far beyond this project as funds are reinvested in future affordable housing opportunities.
This project was historic because:
- It involved a land seller, Transylvania University, that understands and appreciates the importance of creating more affordable housing, which will benefit all of Lexington.
- It was initiated by the private sector.
- It increases critical access to capital for affordable housing. Affordable housing organizations compete with other developers for the land. They often don’t have access to quick capital to purchase land before it sells to someone else. The creation of this revolving capital fund dedicated to affordable housing will help alleviate that problem.
- In addition, large-scale projects take time, and paying interest on a large project over several years is often cost-prohibitive for affordable housing developers. With this investment, there is no interest to be paid on the land purchase and no out-of-pocket expenditures on the land purchase until the property is developed.
- So many Lexington affordable housing developers have a seat at the table and are working together. Habitat for Humanity, Urban League of Lexington, AU Associates and Winterwood worked together with Commerce Lexington, Lexington for Everyone, the Building Industry Association of Central Kentucky and several local banks. Each organization brought its expertise and resources to the table to create this successful project.
What’s Next:
Central Bank, Community Trust, Republic Bank & Trust, Stockyards and Traditional banks all have contributed to the fund, and other banks are expected to make contributions in the coming months.
The sale is pending a survey and environmental review. After that, developers will communicate with neighbors, create a master plan for the development and submit a request to rezone the land from B-1 and B-2 to R-3. The target date for breaking ground is summer 2025.
The project also will require additional collaboration through a public-private partnership, such as Kentucky Housing Corporation tax credits, federal community funds, local CDBG funds for infrastructure, local infrastructure/infill funds and a local Affordable Housing Fund allocation.
This is just the beginning of innovative collaborations. The revolving fund will help the investment live on beyond this project, which is proof that obstacles can be overcome if we all work together.