Affordable Housing Update
The consulting firm czb, inc. presented its report on affordable housing at a Council Work Session on February 25, 2014. You can get a copy of the report here and see the presentation and discussion here.
The report confirms that we have a significant affordable housing problem. As a result of the basic structure of our local economy, an estimated 6,000 households do not earn enough money to afford decent housing even though one or more members of the household hold full-time jobs. We value the increases in higher paying jobs our community has experienced, but those increases also cause housing prices to rise faster than the wages at the lower end of the spectrum, causing an affordability gap.
Here is the heart of what we need to know from the data and analysis in the report. In 1990, 88% of the households earning minimum wage in Fayette County could afford decent housing. By 2010, using the same standards, only 17% of the households earning minimum wage could afford decent housing. If this trend continues without being addressed in some way, few people at the lower end of the wage spectrum will be able to afford to live in Fayette County. As the report says: “If you work in Fayette County, you should be able to live in Fayette County.”
The consultant estimates that it would take an average of $20 million each year over the next 10 years to redress the current gap, and an additional $2.4 million each year to keep pace with the growing disparity between low-income wages and rising housing costs.
At the Council Work Session I made a motion to dedicate 1% of the 5% fee the city currently assesses on insurance premiums, which would be equivalent to $4 million, to create an affordable housing trust fund to begin to address this issue. My motion is consistent with recommendations in the czb report. It is also consistent with previous recommendations from the Affordable Housing Task Force and the Mayor’s Commission on Homelessness, except that my motion would take funds from existing revenue rather than raising the current fee.
On a split vote, Council tabled my motion until the Council Work Session on April 15, 2014. This is the week following Mayor Gray’s budget address. Mayor Gray has said he will include some funds in his proposed budget to address these recommendations. Council will have that information when the motion is placed again on the agenda for consideration.
