CDAC Spotlight
Building Support for Affordable Housing in Louisville

Like most urban cities across the country, Louisville, Ky., is experiencing an affordable housing shortage for lower-income residents. Recent studies show that about 60,000 low-income households are cost-burdened, spending more than 30 percent of their income on housing costs and utilities. Additionally, households in some parts of our community are extremely overburdened, meaning their housing cost outlay is more than 50 percent of their income.

The Louisville Metro Affordable Housing Trust Fund (LAHTF) was created by Metro Council as a tool to address this issue. More specifically, its purpose is to provide a mechanism for local government to invest additional local public funds to address the affordable housing shortage. “A place to call home” opens the door to opportunity. The whole community does better when everyone has a decent place to call home. Those are the mantras of the LAHTF.

The fund is designed to be flexible and responsive to evolving community needs through grants and loans for a range of affordable housing-related activities. All projects are underwritten and reviewed by a committee made up of local lenders, housing finance representatives, developers and staff; they are ultimately approved by the board of directors. Eligible activities include new development, acquisition, preservation and rehabilitation of affordable homes and apartments for renters and owners; improvements in energy efficiency for existing housing; homeownership counseling and down payment assistance; and foreclosure prevention. Eligible applicants for LAHTF funds are for-profit and not-for-profit developers and qualified housing organizations.

Financial support for the fund has built over time. Capitalized in 2009 with $1 million of administrative funds, the LAHTF spends $100,000 annually for operations and other administrative support. In 2012, a $400,000 revolving loan pool was created from the Kentucky Attorney General's award of $250,000 from the National Mortgage Settlement Funds, a $100,000 match provided by the mayor's office and $50,000 raised by the LAHTF's board. In 2014, the LAHTF was entrusted with $1 million in HOME funds, used to rehab and sell 23 single-family homes, 17 of which were vacant and abandoned.

I was hired as the executive director of LAHTF in March 2016 and given the charge to work with Louisville Metro government to prove that the organization was ready to take on the charge of administering millions of dollars of public funds. Efforts to do so by a group of local advocates, board members and other stakeholders included attending bimonthly Council meetings to provide information about families affected by the housing shortage; setting up guidelines and priorities for spending public funds; and presentations to various Council committees explaining every phase of housing development and the funding needed to make it successful.

In 2016, city officials passed a $2.5 million budget allocation for the LAHTF, the first significant contribution since its inception. For the first time, we had enough revenue to demonstrate what the fund could accomplish.

The results have been impressive. With the budget allocation, the fund assisted in the creation or preservation of 326 affordable homes and apartments in the community. Since its inception, the LAHTF has been able to assist in the creation and preservation of 363 units of housing. Projects have included both rental and homeownership units.

One of the seven projects made possible through this year’s funding is a 41-bed permanent supportive living program through the Chestnut Street Family YMCA. One of the only local programs taking men from homelessness to self-sufficiency, the shelter was in danger of losing its ability to access HUD Section 8 funding due to the derelict condition of the building. A $477,000 forgivable loan from the LAHTF will help keep the locally acclaimed project up and running.

An additional $25,000 in supportive housing program grants was established and awarded to four agencies that pay for housing counseling and education, employment training programs, and seed funds for a program that will reimburse landlords for damages incurred by housing the homeless.

But the best was yet to come. Earlier this year, Metro Councilwoman Barbara Sexton-Smith negotiated a $634,000 contribution to the LAHTF from a private developer who had requested tax increment financing (TIF) to build 200-plus luxury apartments in an area close to downtown Louisville. Sexton-Smith offered the donation as a compromise to developing 18 workforce housing units. Instead, the developer is creating fewer workforce housing units and will contribute the funds to the LAHTF prior to lease-up. These funds will be leveraged in other affordable housing projects.

In June, Metro Council passed the Fiscal Year 2017-2018 budget, allocating $9.57 million to the LAHTF. Funding will be used to create a revolving loan fund, an adopt-a-block project designed to address the vacant and abandoned property problem in the urban core, preservation/rehab funding and new unit construction. Funds also will be used to produce an updated needs assessment in collaboration with Louisville Metro.

Learn more about the LAHTF.

CDAC Member Spotlight

Christie McCravy is the executive director of the Louisville Affordable Housing Trust Fund (LAHTF). She has been involved in every aspect of community and housing development in Louisville, Ky., for almost 20 years. Her experience includes both nonprofit and for-profit development, a focus on rental and homeownership opportunities and a strong background in homeownership counseling, including serving as the director for Housing & Financial Empowerment with the Louisville Urban League.

McCravy is a certified Housing Development Financial Professional through the National Development Council. She is also certified through the NeighborWorks Homeownership and Community Lending Program of Study, National Council of LaRaza Housing Counseling Program Management, and National Association of Home Builders HCCP program. McCravy is the immediate past president of the board of directors of the Metropolitan Housing Coalition, former chair of the African American Heritage Foundation, a member of the board of directors for the LAHTF, a former member of the JPMorgan Chase National Community Advisory Board and a member of the Community Development Advisory Council (CDAC) for the Federal Reserve Bank of St. Louis.

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CDAC members are experts in community and economic development and financial education. They complement the information developed through outreach by the Eighth District’s Community Development staff and suggest ways that the St. Louis Fed might support local efforts. A list of current members is available on the Community Development Advisory Council page.