The Lexington-Fayette Urban County Government (LFUCG) first established a locally supported Affordable Housing Fund in 2014. Since that time, the LFUCG has allocated $38,500,000 to the fund including $25,375,000 from the city’s General Fund and $13,125,000 from its federal award of the American Rescue Plan Act’s State and Local Fiscal Recovery Funds. The fund is governed by a 13-person board that includes two members of the Lexington-Fayette Urban County Council as well as local leaders in the areas of banking and housing development.
The LFUCG Affordable Housing Fund provides financing for the construction and preservation of affordable housing. All units must be affordable, per definitions set by the U.S. Department of Housing & Urban Development, for households at or below 80% of Lexington’s Area Median Income. Most units financed since 2014 are affordable for households at or below 60% of Area Median Income. Since the fund’s inception, it has financed the creation or preservation of 3,171 units. More than 30% of those units are set aside for special populations including veterans, survivors of domestic violence, people exiting homelessness, senior citizens, and others.
A study completed in February 2014 for the LFUCG by a third party consultant estimated that, at that time, about 15,000 low-income households needed housing assistance. Of those, 9,000were receiving assistance or accommodated by the private market. That left 6,000 households unable to find housing on the open market at rates considered affordable (equal to or less than30% of their gross income). The same study projected that Lexington would continue to shed approximately 400 affordable units annually, making the problem continually worse.
Since that time, the LFUCG established its Affordable Housing Fund and produced or preserved units as described above. However, also since that time, the COVID-19 pandemic occurred and wreaked havoc on the local rental market. Eviction moratoria and millions of dollars in federal rent assistance have come and gone; market rate housing construction has lagged behind need; and inflationary pressures have driven up rents. It is time for the community to reassess the need for affordable housing not just in terms of number of units but also by type of units, size, cost, geographic placement, etc.
Purpose
This RFP solicits proposals to draft a comprehensive study of housing affordability in Lexington with emphasis on the number of units needed now and in the future to meet local needs. The report should include specific numbers not just in total units but also types of units (number of bedrooms, location, subsidized vs. unsubsidized rents, etc.).That projection should also be translated into costs, helping the LFUCG determine amounts needed from both local and other investments to address the needs. The report should take into account funding sources other than the city’s Affordable Housing Fund, such as Low Income Housing Tax Credits, Federal Home Loan Bank, and even private loans.