Changing form:Louisville appears set to enact an affordable housing trust fund.

How will that affect real estate trends?

Park DuValle: Photo by Geoff Oliver Bugbee  West Louisville’s Park DuValle is one of the city’s visible examples of a shift to mixed-income housing development.

Park DuValle: Photo by Geoff Oliver Bugbee West Louisville’s Park DuValle is one of the city’s visible examples of a shift to mixed-income housing development.

I decided to drive south on Bardstown Road last Friday to find some new housing developments, car slipping amid the sleet-and-snow precursor to the city’s biggest snowstorm in a while. About 10 miles outside the city, I saw plenty: subdivisions landscaped with For Sale signs, street-level billboard advertisements for patio homes, even the occasional duplex — designed not to look like a duplex, of course, as much as a set of higher-class conjoined twins.

Some two years after the first rumblings of a city-based Affordable Housing Trust Fund, an ordinance is approaching a full vote of the Metro Council and, barring something unforeseen, will pass in the coming month. My trip was to understand how that might affect a couple of important housing trends happening now in Louisville, a place that often remains steady in the center amid the relative turmoil of national booms and busts.

First, people aren’t buying these palatial, suburban single-family homes as much as they used to. In fact, the decline in permits for new subdivisions in Louisville has been dramatic, from a high of 54 in 2005 to 12 last year, according to Charles Cash, director of Metro Planning and Design. Following it has been the precipitous decline in single-family home construction permits, down from 2,459 in 2005 to 1,385 last year, according to Metro Inspections, Permits and Licenses.

Second, foreclosures are out of control. Louisville has seen an increase of more than 700 percent in the past decade, according to a report released by the Metropolitan Housing Coalition in January. Last year’s figure will set a city record. More than 70 percent of those foreclosures affected homes worth less than $140,000, suggesting that the city is in the midst of a middle-class, or workforce, housing crisis.

There are 345,142 owner-occupied homes in Louisville, according to 2006 figures from the U.S. Census Bureau, and more than half of them are valued under $150,000. Contrary to the doom and gloom, that seems to suggest there is ample affordable housing here.

Amid all this data, I offer the quaint suggestion that some Louisville neighborhoods are beginning to look different. That’s where the trust fund comes in.

The ordinance that the council’s Health and Human Needs committee is likely to vote on next week would establish an Affordable Housing Trust Fund governed by a 13-member board to be appointed by Mayor Abramson — a supporter of this initiative who provided a $1 million seed for it in the current budget — and approved by the council.

The money could be used for a number of housing needs, including rental, acquisition, new construction (for developers), emergency repair, maintenance and safety, among others. Half of the public dollars in the fund would go to people making 50 percent or less of the city’s median income, which was $59,800 for a family of four in 2005, according to the Census Bureau; the other half would go to those at 80 percent of the median. Any private funds donated could go to help those at 110 percent of the median or below.

Metro government would administer the fund, a structure praised by housing advocates but maligned by some council Republicans who are twitchy about creating more bureaucracy.

It’s a low hurdle: Testifying before the committee on March 5, Kimberly Bunton, director of Housing and Family Services for Mayor Abramson, explained that such structure is needed to bring permanent funding sources into the fold, rather than relying on donations or individual contributions from the state’s trust fund.

A wide-ranging group of developers, bankers, advocates, city officials and Realtors ultimately agreed on the trust fund proposal after a lengthy period of discussion and compromise. Naturally, there remains some disagreement about how the money would be used and where the need is. But everyone pretty much agrees it will help.

“Louisville is changing,” said Cathy Hinko, executive director of the Metropolitan Housing Coalition. “If neighborhoods do not accept diversity of housing types and people, 10 years from now they won’t remain vital.”

That diversity is already happening, according to Chuck Kavanaugh, executive vice president of the Home Builders Association of Louisville. “There’s been a tremendous amount of diversity that has occurred over the past five years,” he said, citing the trend in attached housing over suburban-style single-family homes.

However, many of Louisville’s neighborhoods remain divided along economic lines, and poverty is crippling — there are nearly 15,000 families on the city’s waiting list for public housing and Section 8. The city has incentives to reward builders who include affordable housing in new developments; however, the council changed the terms of those four years ago, and since then, there has been a sharp decline in applications.
“Whatever made it work, it’s not working now,” Cash said.

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