photo by: Nick Krug

In this file photo from July 2017, two Lawrence Habitat for Humanity homes undergo construction in the 1900 block of East 17th Street. The city's affordable housing advisory board contributed funds to construct the homes.

The Affordable Housing Advisory Board is recommending that the city make substantial reserves in its affordable housing trust fund immediately available for upcoming projects, opening up the potential for around $3 million for local projects next year.

The affordable housing trust is funded by a special affordable housing sales tax approved by voters in 2017 that was projected to generate roughly $1 million annually; however, due to multiple factors, the trust now has close to $2 million in reserves. As part of its monthly meeting this past week, the Affordable Housing Advisory Board voted 8-3 to recommend that the city make the entire amount available for projects for next year, meaning that applications for the dollars would open up this summer. In combination with projected 2023 sales tax revenues, that would bring the total amount available close to $3 million.

While a few board members wanted to hold some of the funds in reserve for future years or capital projects to support future affordable housing development, most emphasized a desire to award as much of the funds as possible as part of the upcoming funding cycle. Board member Karen Willey, the representative for the Douglas County Commission on the board, said she wanted to see the dollars turned into housing as soon as possible.

“So the cheapest housing you can build was years before now, and we’ve needed it years before now,” Willey said. “So I don’t see a value in holding for the purpose of holding. I can see a value of holding for the purpose of matching a (Capital Improvement Plan) project that we are soon to identify and have a specific use for, but our job is to spend these dollars.”

Specifically, the trust fund has $1.985 million in reserve, and the city’s conservative projection for the 2023 revenue from the sales tax is $850,000, bringing the total amount available to $2.835 million. Affordable Housing Administrator Lea Roselyn noted to the board that last year the sales tax generated about $1.2 million, but that the ramping down of the state sales tax on groceries may affect collections for this year and future years. Still, she said $850,000 was a conservative estimate.

Roselyn told the board the significant amount in reserve was due to a combination of some projects that had previously been awarded funds not ultimately moving forward and the sales tax generating more funds than projected.

Because of the ramping down of the groceries sales tax potentially affecting future collections and a desire to keep the amount of funds available more balanced, some board members discussed potentially only making a portion of the funds available. Another possibility was designating a portion of the reserve funds toward land acquisition or infrastructure projects, such as streets or sewer lines, to support future affordable housing development.

Board member Nicholas Ward, who represents Tenants to Homeowners and was one of the votes against the recommendation, also expressed concern about local nonprofits such as TTHO or Habitat for Humanity not having capacity to do more projects than they already have in the works, meaning that the additional funds may end up going to private developers or other projects that only designate units as affordable for a specific time frame, rather than permanently as is the goal of the board.

“And I know one of our goals is permanent affordability,” Ward said.

Board member Christina Gentry, who fills a seat on the board for a current or past recipient of subsidized housing, said the larger amount may open up the playing field beyond some of the usual trust fund applicants that regularly apply for funds, or give the city the ability to provide bigger awards that may address other projects that previously ran up against barriers because of infrastructure and other costs.

“So if there is more funding available, maybe we’d get other players besides Tenants to Homeowners, besides some of our regular players, to come in and apply, because that is a big, big incentive, to have $3 million as opposed to $1 million,” Gentry said.

Willey added that as an advisory board to the City Commission regarding awards from the trust, the board would be able to vet the proposals for factors such as how long units are designated as affordable.

“So when projects come forward we can talk to them about capacity, talk to them about permanent affordability, but not offering the dollars doesn’t get us any discussion at all,” Willey said. “It’s OK if we get new players, if we get new ideas, new projects coming to us. What I don’t want is to predetermine what we might get and then hold onto dollars unnecessarily.”

Also as part of the meeting, the board voted unanimously to recommend that the city roll over $380,000 previously allocated for affordable housing capital improvement projects to the 2025 budget, and that a committee of board members be formed to work with city staff to identify projects. Roselyn later told the Journal-World that projects funded from the CIP dollars could include land acquisition or providing infrastructure for land already owned by the City of Lawrence or land owned by outside entities. She said the city would still need to determine how the process would work, but the format could give the board and city more control, enabling the board to create a request for proposals for projects with specific parameters and to put land in trust so that the units can be permanently affordable.

The board’s recommendations regarding the CIP funds and the housing trust fund allocation will go to the City Commission for consideration, and that body will make the ultimate decision.

Roselyn said the board’s recommendation to make all the reserves available next year would be an opportunity to help achieve the city’s affordable housing goals, which are to develop 1,500 new units of affordable rentals over the next five years and 500 units of affordable homes for ownership. She noted the funds would be in addition to millions in federal pandemic relief funds that the city and county already designated to support affordable housing, including land acquisition, and could also help move projects along faster.

“This will really enable perhaps new developers to come into our community and compete in the market that they haven’t had an opportunity to before to really leverage these funds to get more units on the ground, and/or for the developers that are already in our community to perhaps get units up quicker,” she said.

The 2024 applications for the Affordable Housing Trust Fund will be released in July 2023, with applications due in September 2023, according to information from Roselyn. The AHAB will make award recommendations in November 2023, and the City Commission will approve recommendations in December 2023. The 2024 awards will be available for grant recipients starting in January 2024, after all award agreements have been signed.