Her right bicep is tattooed with the astrological symbol for Virgo. On her left arm, in cursive, are the words “Jesus Cometh” — small transcripts of the inevitable circumstance and tacit hope that have punctuated her life.
It’s late afternoon, and she admits this is her “couch potato” time. After all, she’s been on her feet all day. This home is easy to relax in — clean, spacious, air-conditioned. She’s lived in it since late December.
But it’s been a peripatetic journey to this home in the West End. Perales came to Louisville in 1992 from Oceanside, Calif. Her then-husband moved the family into a house she says should have been condemned.
“You could see your breath from the inside, and we had icicles on the inside,” she says. “Not the outside, but the inside.”
A year later, she and her two kids were living in the Clarksdale public housing complex. She loved it. Sure, there was crime, but her memories are of friends and stability. She could make rent even with her fluctuating wages, as the Louisville Metro Housing Authority only required her to pay 30 percent of her income.
But in 2005, the city finished demolishing Clarksdale to make way for an upgraded, “mixed-income” housing development known as Liberty Green.
“I miss it,” she says. “I do.”
Perales qualified for Section 8 — a government rental assistance voucher paid to private landlords — and moved into a beautiful, old home in west Louisville. With the voucher she was only responsible for $400 of the $1,200 in rent. Living in Clarksdale, she’d never had to pay utilities, so she hadn’t budgeted for the exorbitant LG&E bills that arrived during winter.
She fled to a more compact house nearby, but after a few years, the rent became too expensive and she was evicted. Then came a string of sub-par living arrangements: staying with a friend, spending a few months at her mother-in-law’s empty apartment, then moving into an Old Louisville house overrun with mold, as well as mice and squirrels that routinely scurried in from the attic.
She asked the landlord to fix up the place. When he refused, Perales angrily called him a slumlord — evicted again. A friend of an ex-boyfriend helped her secure the home she’s in now — no deposit and $400 a month.
“I’m good now,” Perales says from her living room, finally at a comfortable distance from the precipice of homelessness.
It’s this type of volatile search for decent, affordable housing that prompted 90 local agencies — including Habitat for Humanity, Metro United Way, Coalition for the Homeless and several churches — to endorse a campaign to create an affordable housing trust fund in Louisville back in 2006.
The idea attracted the attention of then-Mayor Jerry Abramson, who created a task force to pursue the campaign, dubbed “Open The Door.” On May 15, 2008, Metro Council passed an ordinance creating Louisville’s Affordable Housing Trust Fund.
The city allocated $1 million (the result of an unexpected $3 million surplus) to the trust fund as seed money, the goal being to find a dedicated public revenue stream that would bring in $10 million a year for the fund, enough to finance the construction
or rehabilitation of at least 300 low-cost housing units.
The fund also would help with down payments, foreclosure intervention, weatherization, and maintenance of affordable housing stock; most of the money would go toward projects to support the working poor.
Mayor Abramson approved. Metro Council gave its blessing. Nonprofits applauded.
Yet more than three years after its approval, the trust fund remains empty and ensnared in red tape. That $1 million? It still hasn’t been turned over to the trust fund’s board. At a recent meeting, the board’s director, Kevin Dunlap, expressed irritation. Dunlap works on housing issues at the Louisville Urban League and sees the need daily.
“We’ve been almost paralyzed from the beginning,” he says. “Doing what we’ve been charged with doing without any funding.”
The need for more low-income housing is well documented. While the recession has led to record-high vacancy rates, wages have fallen and energy costs have soared. According to Harvard University’s Joint Center for Housing Studies, the number of renters paying 30 percent of their income or more on rent jumped from 58 percent to nearly 76 percent over the last decade.
On top of that, the federal government’s interest in creating low-income housing has eroded. In the 1980s, the U.S. Department of Housing and Urban Development’s budget was slashed by $54.6 billion. The cuts have continued over the years, and with Congress ready to carve billions of discretionary funds, low-income housing programs will suffer even more. It’s resulted in a steady reformation of urban policy in which partnerships form between the public and private sector, creating “mixed-income” (i.e. often higher rent, more restrictive) housing developments, like the aforementioned Liberty Green.
And as Louisville entrenches itself in the neo-liberal trend away from building low-income and public housing, advocates say the Louisville Affordable Housing Trust Fund has to get off the ground, so decent, affordable houses and apartments can follow suit.
In 2006, the year that the push for a local affordable housing trust fund began, Perales’ Section 8 voucher landed her in what she considered a palatial estate: four bedrooms, two bathrooms, a bucolic picket fence, even two sets of stairs to get to the second floor — her favorite amenity.
The house didn’t heat well, and Perales just turned up the thermostat, not realizing how porous her home was. One day, after work, while standing in front of a drafty fireplace, Perales ripped open her LG&E bill — $800.
“I nearly passed out,” says Perales, who was working at a dry cleaner at the time. Her church and Louisville’s Low Income Home Energy Assistance Program, LIHEAP, helped pay the bill. Eventually, she learned the home had practically zero insulation.
For Perales and many minimum-wage workers, every month is a struggle. Affordable or low-income housing, in general terms, is described as housing — rental or ownership — for individuals who make 50 percent or less of the area’s median income. In Louisville, that hovers in the low $20,000 range.
According to the Department of Housing and Urban Development, fair market rate in Louisville is just under $700 for a two-bedroom apartment, $585 for a one-bedroom, including utilities. Those rents reflect a 38 percent increase from 2000. The income needed to afford that two-bedroom: $27,760, or roughly $13 an hour. Minimum wage in Kentucky is $7.25.
Tens of thousands of renters in Louisville spend more than they can afford on rent — more than 30 percent of their monthly wages.
The 2008 ordinance creating the Louisville Affordable Housing Trust Fund lays out all the bleak statistics and speaks of the 350 other cities that have adopted the trust fund model over the last couple of decades. Some trusts rely on an annual appropriation from the city, but the “best practice” model suggests dedicating a stream of public funds, like developer impact fees or document recording fees.
Mayor Abramson thought the affordable housing trust should be established as its own nonprofit, with its own board. But he wanted the existing Department of Housing and Family Services to run the day-to-day operations.
Once signatures graced the ordinance, however, board chairman Kevin Dunlap says momentum ceased.
“Nothing happened,” he says. “I was surprised at how slow things moved under the former administration.”
Abramson did not appoint a board. The $1 million did not materialize. No one within the city’s housing department ever pushed the affordable housing trust fund forward, and so it withered.
This wasn’t exactly a banner era for the housing department. A February 2009 state audit found “gross mismanagement of critical city programs and the millions of local and federal dollars used to fund them.”
Auditors found employees who didn’t have an understanding of their basic job functions. Summer food programs for children were sloppily handled, causing a loss in federal funds. A grant aimed at reducing poverty was diverted to pay for a former housing director’s cell phone bill and legal association dues.
Councilwoman Tina Ward-Pugh, D-9, who sponsored the affordable housing trust fund ordinance and now sits on the board, believes the disheveled state of the department allowed for the fund to plunge into the depths of the priority list.
So in September 2009, another ordinance, also sponsored by Ward-Pugh, shifted the management of the trust fund out of the housing department and into a yet-to-be-formed, separate nonprofit. By the end of 2009, Abramson finally appointed a board, comprised mostly of housing advocates and developers. All 13 members began meeting in February 2010.
A year and a half later, still no money.
Cathy Hinko, executive director of the Metropolitan Housing Coalition, sits on the volunteer board. She says the group has been slow going, but not for lack of trying.
“I’m not saying we moved at the speed of light,” she says. “But we did have palpable accomplishments for a group that meets once a month.”
It took about a year to finally get their official 501(c)(3) status, a requirement for the receipt of the initial $1 million. For seven months now, the trust fund has anticipated drawing down dollars promised to them. The trust may use, by ordinance, up to $100,000 for administration annually.
“It’s delay after delay after delay,” says Hinko, who believes the board has done all it can without funding.
Now they need a staff to take the reigns. They’d like to hire an executive director who will organize a study of which agencies and communities could benefit from the trust fund. That person will lead the charge for seeking out the vital dedicated revenue stream that will keep the fund afloat.
Leaving that to an all-volunteer board would take years, and the need right now is even greater than it was in 2006 when the idea was born.
Filling the gap
Building low-income housing isn’t easy. Developers must stitch together a patchwork of funding sources.
The most frequently used program is federal low-income housing tax credits made available by the IRS and administered by the Kentucky Housing Corp. The Low-Income Housing Tax Credit Program acts as an incentive to invest in affordable housing, wherein private banks purchase credits to offset the expense of building new units. Developers must commit to reserving a portion of their project for low-income individuals.
Once credits have been awarded, developers turn around and sell them to investors to raise capital for the projects. This reduces the amount the developer would otherwise have to borrow, and less debt can mean cheaper rent. Investors walk away with a dollar-for-dollar credit against their federal tax liability each year for 10 years.
With the economic downturn, investors weren’t that interested in tax credits. Mike Hynes is president of the Housing Partnership Inc. He says tax credits generally pay for 70 percent of a project’s cost. While federal grants traditionally have helped fill in the gap, those dollars are dwindling.
“As a community, we’re going to have to be more resourceful to fill the gap of what’s missing from the federal level,” he says, adding that something like a trust fund could help. “It can be effective in filling that last 5-10 percent … that’s needed. Those are often the most difficult funds to find.”
Kentucky established a state affordable housing trust fund in 1992. It currently generates roughly $5 million a year, but it serves 93 counties and has had to turn down $24 million in project requests.
Neither Kentucky nor Louisville is among the most expensive areas in the United States. But in recent years, Louisville has aggressively pursued projects that have ultimately diminished the city’s affordable housing stock.
In tearing down the Iroquois Homes public housing complex, the Louisville Metro Housing Authority (LMHA) cleared out an abysmal, worn-out development. It also purged 853 units of housing for low-income families and the working poor. So far, LMHA has purchased only 40 replacement units.
Park DuValle, Louisville’s first HOPE VI project, saw a net loss of just over 600 public housing units when Cotter and Lang Homes were bulldozed. HOPE VI matches federal with private dollars to revitalize run-down public housing, transforming it into updated mixed-income housing, the goals being to decentralize poverty and reduce crime.
When Clarksdale was torn down to clear the way for Liberty Green, the city’s second Hope VI project, LMHA committed to replace each public housing unit with one somewhere else in Louisville, known as scattered site units. This massive undertaking necessitates time and money. Housing must be vetted, inspected and then ultimately purchased.
With Smoketown’s Sheppard Square public housing complex facing demolition next year, LMHA admits it could take several years before all 326 units are replaced with scattered site units.
It’s also important to note that starting with Clarksdale, LMHA promised to relocate every resident affected by demolition. To do that, they must hold back available public housing units as well as Section 8 vouchers to fulfill the commitment.
That puts a crunch on an already burdened affordable housing stock. Families or individuals in need get pushed down the waiting list. According to LMHA, there are close to 16,000 on the Section 8 wait list and close to 9,000 on the public housing wait list. Anywhere from 3,000 to 6,000 people may get added over the next year. Tim Barry, LMHA’s executive director, says the list is bothersome, but a result of federal funds eroding.
“We don’t have enough money,” he says. “And that’s a national problem.”
Cathy Hinko is most concerned about single moms and families. Over the past few years, LMHA has tinkered with policy that she says has made housing families more difficult. For instance, this year LMHA has diverted close to $2 million away from Section 8 and into replacing units for the now-defunct Iroquois Homes.
As of 2007, those scattered site units are only eligible for five years of residency. Also, the criteria to get in them are tougher, unless you’re elderly or disabled. A family or individual must be working. The theory is that this will spur self-sufficiency. But Hinko is not convinced that’s the outcome.
“I don’t think it’s unrelated that we now have a lot of homeless kids. We divert Section 8 for this renovation work. We make higher income standards for the replacement housing,” she says “Families have been left out.”
A recent report from the Coalition for the Homeless identified 10,000 homeless children in Jefferson County Public Schools. This includes kids whose families bounce from relatives’ couches to hotels.
It’s a routine 43-year-old Karen knows all too well. The single mother, who did not want her last name used, lives with her 10-year-old daughter in a hotel on Taylorsville Road. Plastic bins filled with clothes and shoes clutter the room. Their lone small table is buried underneath food branded with yellow Kroger “Manager’s Special” stickers.
It’s about 5 in the morning. Karen, a U.S. Army veteran, still rises like a soldier to complete motherly duties, like laundry. The petite woman heaves a shopping bag over her shoulder and heads downstairs to the stark laundry room.
Karen’s been on the Section 8 waiting list for two years. For a month she had to live out of her car with her daughter. Rest stops let them slip in and out unnoticed.
“I know it’s affecting her,” Karen says, referring to her daughter. “I want a backyard … I want her to have a room that’s all Pepto-Bismol. I want a refrigerator to store food. I want a home.”
Future under Fischer
Members of the Louisville Affordable Housing Trust Fund board file into a large conference room for their August meeting. Quickly, talk turns to money, or lack thereof. When the budget report is up for discussion, chuckling ensues. The board collected $100 so they could open a checking account. And that remains the total balance.
Earlier this year, after the trust earned its official 501(c)(3) status, the board assumed the check was in the mail. So they hired a consultant to start drafting housing studies and an annual plan. They owe her more than $13,000, meaning Louisville’s affordable housing trust is actually in debt.
“And we have a million dollars,” Hinko says with an exasperated laugh.
The odd thing is that Mayor Greg Fischer has repeatedly pledged his support of the fund. In the city’s budget, passed earlier this summer, Fischer allocated $100,000 to the trust fund … with a catch. Board members needed to match that $100,000 dollar for dollar, bringing their total funds up to $1.2 million.
During the meeting, board member John Rippy, who works as chief legal and compliance officer at Republic Bank, reports that he’s called Steve Rowland, the city’s chief financial officer, seven times to try and get an answer to what constitutes matching funds. Grants? A loan?
He still hasn’t heard back. Mayoral spokesperson Chris Poynter says Fischer would like to see the housing trust fund invest its money in a savings account, adding that more funds need to be accrued for the fund to be effective. He says the mayor intends to meet with Councilwoman Ward-Pugh this week to discuss concerns and review the ordinance.
“The mayor believes that none of that money should be spent,” Poynter says. “It should sit, in essence, in a savings account until we can get that fund up to an acceptable level — roughly $10 million — so we can have some real money to leverage and work on affordable housing.”
But the board says the trust fund will continue to dawdle unless at least one staff person is hired, and that takes money.
“I’m personally frustrated with the whole process,” Dunlap says from the head of the table. “This is dragging on much too long.”
Dunlap recently sent a letter to Adria Johnson, acting director of the Metro Department of Community Services and Revitalization, formerly known as the Department of Housing and Family services.
In it, he requests the $1 million, citing the 2009 ordinance that turned over responsibility of the trust fund from the city to the board. Johnson says she’s received no such letter and that her department is not in charge of releasing funds.
Back in June, the Metro Council echoed Dunlap’s request in the Community Services and Revitalization budget. Board members have been told by city administrators they need to fill out a Fiscal Agent Agreement, a piece of paper they say they’ve requested and not received.
Councilwoman Ward-Pugh tells the board during the meeting that she’s confident in Fischer’s support.
“I think you have a brand new administration. Some who’ve not been in government before,” she says. “Some who are trying to juggle all the different demands and interests.”
But the delays have certainly irritated her. During a recent budget hearing with the Community Services and Revitalization Department, she brought up the $1 million still in their possession.
Metro CFO Rowland fielded her questions and reiterated the mayor’s belief that $10 million should be raised before any money is spent. Ward-Pugh got a bit agitated, reminding Rowland of the money promised to them via the ordinance back in 2008. That same ordinance also explicitly states they can only take out a certain amount every year:
Ward-Pugh: “This is what keeps happening when Metro government in the past has had control of funds. We created it specifically so that it has its own 501(c)(3) entity so that Metro couldn’t control it.”
Rowland: “With the intent being that Metro would just cut a check to the 501(c)(3) for $1 million?”
Ward-Pugh: “You bet. You bet. Just like we do with other 501(c)(3)s. I’m just saying to you it is not our intention to spend the whole $1 million this year.”
Rowland agreed to review the ordinance again. That was June 15.
Back at home
Annette Perales sits back down after grabbing a cigarette from the kitchen.
“I got my remote. I’m good to go,” she smiles. The 49-year-old welcomes the hermetic stability her new home offers. She walks in from work, locks the door, melts into her chair and pops in a movie. Today, it’s “Couples Retreat.”
Shortly after her first eviction, Perales became depressed and even contemplated suicide. She’d been rotating in and out of an abusive relationship, and the constant threat of homelessness wore on her. Fortunately, she checked herself into a hospital for a few days.
“What wasn’t going on?” she asks herself rhetorically while recalling that difficult phase in her life. Nights spent worrying over bills. Mornings spent dragging herself to work.
“Boy, the things, things, things that go on in your life,” she says, then shakes her head in silence.
As she poses for the picture that will accompany this story, she wants to know more about this affordable housing trust fund. With memories of evictions and $800 energy bills fresh in her mind, she vigorously nods with the idea of housing that’s affordable and decent. She adds one more stipulation: “And insulated!”