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February 20, 2013

Trust issues

Louisville Affordable Housing Trust Fund advocates remain hopeful despite latest funding roadblock

It all started to unravel with a phone call.

At 10:30 a.m., with less than two hours until the Monday filing deadline for legislation, Councilwoman Tina Ward-Pugh, D-9, received word from the Jefferson County Attorney’s Office.

Her new ordinance, which would have raised insurance premiums by 1 percent within the Urban Services District to help pay for the perpetually under-funded Louisville Affordable Housing Trust Fund, was deemed unconstitutional: The city could not legally divert the new revenue into a specific fund. Instead, it must go into the general fund.

All nine council Republicans opposed the legislation from the outset, but when word of this new development leaked to local media last week, support for the ordinance — as well as the chances of securing a dedicated revenue stream for the trust fund this year — quickly eroded, from seven supporters to four.

Now the future of the ordinance — which currently maintains a sliver of support from stalwart liberals such as council members Attica Scott, D-1, Tom Owen, D-8, Mary Woolridge, D-3, and Ward-Pugh herself — depends on either hammering out a better version of the bill, or waiting for another time to muster the requisite political will.

And the stakes have never been higher. The percentage of homeless children in Jefferson County has increased by 30 percent in the past three years, with approximately 12,000 children without stable housing in the year 2012. At the same time, Louisville has continued to hemorrhage urban real estate, as an estimated 6,000 to 7,000 abandoned properties blot the cityscape, primarily in west and south Louisville. And the city’s final federal HOPE VI mixed income housing project, a redeveloped Sheppard Square in the Smoketown neighborhood, will do little to alleviate the backlog of thousands of families languishing on the Section 8 waiting list when it is completed in the coming years. Further, data posits that the city suffers from a deficit of roughly 58,000 housing units.

“Housing is really the key to this (homelessness) problem,” says Natalie Harris, executive director of the Louisville Coalition for the Homeless, an umbrella organization that comprises 27 member bodies that deal with the effects of the city’s dearth of permanent low-income housing. “Once you can secure that, the rest can flow from there.”

Harris believes it’s only a matter of time before a source of funding is secured, though she doesn’t think it will happen this year. She recounts a similar situation in her previous job with the Kentucky Housing Corporation, where it took more than a decade to successfully lobby Frankfort to create the state’s affordable housing trust fund.

“I think they started too late,” she says.

But time may soon be on the side of the Louisville Affordable Housing Trust. Created in 2007 with an endowment of $1 million, the trust fund was established as a nonprofit in its own right just a couple of years later, though ever since it has had difficulty securing a dedicated source of income, projected at an ideal $10 million per year.

Cathy Hinko, executive director of the Metropolitan Housing Coalition and a board member of the city’s affordable housing trust fund, laments the setback but is convinced they are closer than ever to securing money. She says the biggest roadblock has been a state law that requires the city to notify the county commissioner at least 100 days in advance of the premium increase prior to the beginning of the next fiscal year, July 1.

“If we wanted to get the tax in for July 1, (the ordinance) had to pass here by mid-March, which created an incredible flurry of activity,” Hinko says.

“I don’t think it’s a setback,” she continues. “We wouldn’t have had this discussion, with this level of concern, if it hadn’t been introduced by the sponsors. So it generated this great conversation. We’re no worse off than we were.”

Some observers say housing advocates and supporters of the ordinance, which would have raised an estimated $9.7 million annually for the trust fund, jumped the gun. At a Metro Council Democratic Caucus meeting last week, Ward-Pugh admitted as much.

Councilman David Yates, D-25, who opposed the bill from the start, voiced concerns that fighting political battles during every budgetary season in order to divert general funds to the trust fund would prove impossible.

“What if public safety is strapped (that year)?” Yates asked. “We can’t guarantee we’ll keep paying for it down the line.”

But Ward-Pugh remains optimistic and isn’t willing to rule out the ordinance’s chances just yet.

“The next step needed to regain support from the original sponsors is to figure out a way that the funding raised by the tax will be dedicated solely to the (trust fund),” she wrote in an email to LEO Weekly. “I am working with the County Attorney’s Office in hopes to find that mechanism and am hopeful I will have one by Thursday when the Budget Committee meets to discuss the ordinance.”

The councilwoman believes the matter will come down to not just crafting a better ordinance, but mustering the political will to solve one of the city’s most pressing issues.

“If we can commit $10 million a year for 30 years for (the KFC Yum! Center),” she writes, “surely we can do the same to address our affordable housing crisis.

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