City’s affordable housing board looks for new ideas, new funding

Lawrence City Hall, 6 E. Sixth St., Thursday, July 7, 2016

Over the past year, city funds and policies have helped add a handful of affordable homes and apartments to Lawrence, but city leaders say to fill the vast shortage of affordable housing is going to take new ideas and new money.

Some of the city’s Affordable Housing Advisory Board goals are to work with developers to reduce the cost of housing, to use a housing analysis to determine the underlying causes of the shortage, and to identify new funding sources for the city’s affordable housing trust fund.

Vice Mayor Stuart Boley, the City Commission’s representative on the board, said that part of addressing the housing shortage is realizing that the issue has multiple causes that in turn affect people with a range of incomes.

“I see this as not just one problem,” Boley said. “This is a spectrum of issues across this range from zero percent of area median income up to 80 percent.”

Why the shortage?

The board plans to use a housing analysis to identify what is causing a shortage of affordable housing in Lawrence.

The analysis will provide an inventory of the need and availability of affordable housing, as well as demographic information, economic data and market conditions, according to Casey Toomay, assistant city manger and staff liaison to the board.

Matt Sturtevant, chair of the board, said a new analysis is needed to know what the housing shortage currently is and help the board figure out why the city has a shortage.

“Not simply how many houses do we have and how many do we need, but what are the overarching needs that have got us to this point, and need to be addressed?” Sturtevant said. “Because at some levels, if we don’t pay attention to the systemic problems, then we could fix the symptom without really fixing the overall problem.”

The shortage of affordable housing is an acute problem in Lawrence, and national health rankings have designated the shortage in Douglas County as “severe.” The city has renewed its efforts to address the problem and created an Affordable Housing Advisory Board in July 2015.

Boley said that he thought the study could also help the board get a better understanding of how the student population in Lawrence affects housing. He said existing income data doesn’t provide an idea of other funds — such as student loans or money from parents — that students spend and how that affects housing affordability.

Toomay said the board hopes to partner with local organizations interested in the data to help fund the study, which will go to the City Commission for consideration on March 7. She said the study will provide an update to one done in 2005.

“What I think the board has struggled with is to what extent that need has changed and exactly how,” Toomay said. “I think this is kind of a new baseline of data that the board can use to make informed recommendations to the City Commission.”

Finding new dollars

To make a difference, though, will take more than just new data.

The board was established to advise the city and county commissions on issues affecting affordable housing, as well as to manage the affordable housing trust fund. The city allocated $300,000 toward the affordable housing trust in 2017, and its five-year capital improvement plan includes another $300,000 in 2018 and $350,000 per year from 2019 through 2021, for a total of $1.65 million.

Another of the board’s goals is to identify five new funding sources for the trust fund, which currently has a balance of about $380,000. Toomay said that city staff have worked with an affordable housing consultant to prepare a list of potential funding sources. She said those possibilities include various potential sources based on what has worked in other cites — such as local sales or property taxes, development fees and grants — and will be the basis for an upcoming discussion by the board.

“It’s not necessarily a recommendation as far as what we are suggesting, it’s more offering some information about (the options),” Toomay said. “What that might look like, how much that might generate and why or why not that would be a good idea.”

Last year, affordable housing trust funds supported a housing voucher program as well as the construction of three affordable homes. The voucher program, run by the Lawrence Douglas County Housing Authority, was provided $100,000 toward vouchers for people residing at the Lawrence Community Shelter. Another $100,000 — split between Lawrence Habitat for Humanity and Lawrence Tenants to Homeowners — helped fund the construction of three permanently affordable homes.

The board is scheduled to begin discussing the ideas for new funding sources at its meeting March 6, Toomay said.

Bringing more people to the table

The board is also in the process of expanding the number of seats on the board to include more organizations, such as the chamber of commerce, University of Kansas and Lawrence Board of Realtors.

“Solutions involve resources as well as the expertise of the nonprofits and partners in the building community and real estate community,” Boley said. “We’re trying to bring more of these folks into the board to enhance those conversations.”

One of the board’s goals is also to work with developers and builders in the community to reduce the cost of housing, with a target to reduce the cost by 5 percent over two years. Making progress on the goal includes several steps: discussion with developers and the financing organizations to understand the issue; identification of places in the process for cost reduction; and analysis of impact on unit costs. The final step is to recommending policy changes to City Commission.

Boley said that the city needs to look at how its policies, such as zoning density, might be affecting the cost of development and what an affordable market would look like.

“We need to look at how we do developments to see whether we’re causing unwarranted costs because of our zoning practices,” Boley said. “…I think that’s one of the things that the community has to talk about: what would Lawrence look like if we actually achieved our affordable housing goals?”

Defining what’s affordable

Another of the board’s goals was to adopt a definition of affordability for renters and homeowners.

In general, housing is defined as affordable when occupants are paying no more than 30 percent of their income for their housing costs and utilities. In Lawrence, only about 40 percent of renters and about 70 percent of homeowners meet that definition, according to the most recent U.S. Census data.

The board provided a specific definition of affordable housing rates for the city’s recently adopted economic incentives policy, which requires developers seeking public incentives for residential projects to set aside 10-15 percent of those units as affordable housing during the incentive period. Last year, a mixed-use apartment project received incentives under an agreement to include two affordable units.

The incentives definition of affordability — which uses the fair market rent determined annually for the area by the U.S. Department of Housing and Urban Development — will also be used for the board’s general purposes. For housing to be affordable, the cost of rent and utilities can’t exceed 110 percent of the fair market rent.

For 2017, the combined cost of rent and utilities can’t exceed about $705 per month for a one-bedroom apartment and about $930 for a two-bedroom. For affordable ownership, payments can’t exceed 30 percent of household income for families that make 80 percent of the area median income. For a one-person household in 2016, that would be $1,046 per month; it would be $1,195 for a two-person household.

This year’s housing projects

On the forefront of the board’s agenda is how the funds already in the housing trust fund will be spent.

As currently written, the draft application for trust funds indicates that projects can include acquisition, rehabilitation and development of affordable housing, as well as funding for supportive services.

Sturtevant said that supportive services could include some of the voucher programs that the trust fund has previously supported, as well as funds for financial or other counseling. He said he recognized that subsidies such as vouchers are more of a “stopgap measure,” but that it was a necessary resource in the beginning.

“Best case scenario is all of sudden we can build 4,000 houses next year and we’d be in good shape, but meanwhile we have to do some other pieces because that’s probably not going to happen,” Sturtevant said.

At the same time, Sturtevant said he sees the need expanding beyond those who might be helped by vouchers, which in the past have provided aid to families to move out of the Lawrence Community Shelter.

“The dominoes keep falling further and further, in terms of, it’s not just the most vulnerable who are unable to afford places to live, but professionals are having more difficulty finding housing that’s not outrageous,” Sturtevant said.

Toomay said the application for housing trust funds will be finalized at the board’s meeting on March 6 and from there will be sent to the City Commission for review on March 14. Once the board makes a recommendation for projects to receive funding, those recommendations will go to the City Commission for final consideration.