How about that one? All right. I think we have Rick on. Yep, he's live. We'd like to call this meeting to order. Planning Commission Work Session, May 29, 2025. It is now 1.30. And first on the agenda, Rick McQuadey, Affordable Housing, Housing Advocacy, and Community Development. Rick, you're on mute. Okay. Hey, can you hear me? Yes. Okay, great. Great. What I'm going to do, I'll give a brief introduction, and I'm going to share my screen. I'm hoping you have the PowerPoint in front of you, but I still want to share my screen. I won't be able to see you while I'm talking, but if anybody has any questions while I'm speaking, please feel free to interrupt me. And also, I'll obviously be glad to take questions at the end. My name is Rick McQuadey. I've been the Affordable Housing Manager for the City of Lexington since 2014, which is when the Affordable Housing Fund was first initiated by the City Council. My presentation today really is in response to questions that Ms. Worth asked, and so I'm going to try and answer those questions as best I can, and provide you information on who the Affordable Housing Fund serves, other federal and state resources that are available for the development and preservation of affordable housing, how we allocate the affordable housing funds, how the funds have been utilized, in other words, who we serve, what types of projects, those types of things, and then finally to talk about some of the challenges we face in addressing the need for affordable housing in Fayette County. So with that, I'm going to go ahead and share my screen, if I can do that. Did that work? Yes. Okay, you can see, okay good, you can see the presentation. Yes. All right, great. Okay, so first of all, affordable housing is defined, this is really the federal definition of affordable housing. It's a definition that we use as well. Affordable housing is defined as housing that costs no more than 30 percent of a household's income, and that includes not only rent and a mortgage payment, but also includes utilities, taxes, and insurance. So that's how we define affordable housing, and that's our goal, is to provide as many units as we possibly can so that the families that we're serving only have to pay 30 percent of their income for these costs. It does include both multi-family and single-family, and our affordable housing fund, like federal housing, all the federal housing resources, they're all designed to serve households whose incomes are at or below 80 percent of their immediate income. In the next slide, I'll show you what those incomes are. There was also a question that's worth asked about workforce housing. Workforce housing is a type of affordable housing designed for households whose incomes are just above the incomes that we serve with the affordable housing fund, between 81 and 120 percent of our immediate income. You'll see some definitions that say it's 70 percent of our immediate income to 120 percent of our immediate income, but it's either just above who we serve or the higher end of who we serve, and then you add on some higher incomes at the top as well. Now, and I'm going to mention this again, I'm sure, but to ensure that our units are for households whose incomes are at or below 80 percent or 60 percent, depending on what the board says, you know, who these units are reserved for, we place deed restrictions on the properties, and these deed restrictions for multi-family units are for 15 years. For single-family units, they range from five to 15 years, and these are all determined by the affordable housing fund board, and I'll talk about their role a little bit later in the presentation. So, these are the incomes that we serve. The area median income for a household of four in Fayette County, Kentucky is $102,400, and so what we serve are those families, and it all varies by income, by household size, obviously, but those at 80 percent of area median income. Hey, Rick? Yes, sir. Would you make the screen larger, full screen? I'll try. How can I do that? Yes, we'll get it to you after this. Unfortunately, I'm not sure how to, can I, I'd like to delete this side over here where it's got my slides. I think I can do it that way. On the bottom. All right, hang on. Oh, okay, right here. Reading view, let me try that. Hey, is that better? Yes. Okay, great, great. Okay, um, so these are the incomes that we serve, and the vast majority, over 80 percent of the funding that we have allocated with the Affordable Housing Fund dollars have gone to serve those at 60 percent and below. Those between, you know, between really 30 percent and 60 percent, the vast majority of our funds have been utilized for that population. Can I get you to repeat a figure? We got distracted. Could you give us the area median income again? Yes, for a family of four in Lexington, Kentucky, or a household size of four, I should say, is $102,400. Thank you. Okay. Okay, so let me see, make sure I can change this now. Okay, so the purpose of the Affordable Housing Fund, when the Affordable Housing Fund was first initiated in 2014, when the Council created this fund, the purpose is to leverage public and private investment to preserve and produce safe, quality, affordable housing units in Fayette County for those at 80 percent and below. Now, I think a lot of people felt like, okay, we're going to build a bunch of new housing, and we have, but I want to emphasize the importance of preserving the affordable units that we have as well. You know, units age, just like we all do, and they need to be rehabbed. They need to be preserved, and I've always had the theory that if we don't preserve the units that we have, we will never be able to catch up to the need. So, preservation is just as important as new construction of the units. Also, there's another word in there that I think is very important and really defined the rest of my presentation, and that is quality. I don't want there to be any distinction when you drive down the road that you know whether this is a market-rate property or an affordable property. It should cost the same to construct, and the same construction quality should be in place for an affordable housing development as it is for a market-rate development. That's very important to us. I don't want, and I've told the council this, I don't want you driving down the road 10 years from now looking at some deteriorating rental project and saying that's one of those that McCoy funded with the Affordable Housing Fund. That's not what I want. So, we take measures to ensure that what we have is quality housing, and that's the purpose of this whole program, quite frankly, is to give people a safe, quality place to call home. Again, housing is considered affordable at 30 percent, and so how do you create affordable housing? If it costs just as much to build it, obviously the land's going to cost the same. Frankly, it costs just as much to manage an affordable housing development as it does a market-rate development. So, how do we create affordable housing? We create it by reducing debt service costs to the owners of the properties, and in return for lower debt service costs. In other words, they don't have to borrow all the money to fund the development or the rehab or the preservation. So, in exchange for reduced debt service costs, then the landlord's owners charge lower rents to the tenants, and obviously if we're giving it to home buyers, then that money we give provides or serves to provide for a lower mortgage payment for homeowners. So, that's one of the things I want to emphasize, that there's no difference except for these properties don't have to pay as much principal and interest because their mortgage isn't as high as some other market-rate properties. So, another question that was asked by Ms. Worth is, what resources are out there to fund affordable housing? And the major mechanism, if you will, that large multi-family developments, the way they are funded now, and this started in 1986, is what's called the low-income housing tax credit. It's described in section 42 of the Internal Revenue Code, and it is a set amount that comes to each state. It is allocated to Kentucky Housing Corporation. Developers apply to Kentucky Housing Corporation for those credits. I'm not going to explain the whole credit program to you because I don't want to put you to sleep, but in a nutshell, in exchange for tax credits that ultimately go to financial institutions like banks, the banks then invest money in multi-family developments that serves as equity. And again, what that does is it reduces the amount of debt that the developer or owner has to borrow to create or rehab these affordable housing units. This provides equity into large multi-family developments. And really, to make it feasible, it needs to be a development that is somewhere around 20 units or more. For less than 20 units, it's not feasible to do housing credits. It can work, but it's very tight. In addition, private investment, whether it be the owner investing their own money, the tax credit equity, all those things are invested in these properties. Another resource is financial institution debt. Of course, that's not going to be subsidy dollars. That's going to be at market interest rates. And then subsidy dollars. And these subsidy dollars are another resource, if you will, that serve to lower the amount of debt that the developer owner has to borrow to fund their affordable housing development. You get subsidy dollars from HUD and the Federal Home Loan Bank. An example of HUD subsidy dollars is the home program, which the city receives an allocation of home funds on an annual basis. The Federal Home Loan Bank, the one most commonly used here is the Federal Home Loan Bank of Cincinnati. They allocate 10% of their profits for affordable housing, and there's an application process that developers have to go through to receive those dollars. Kentucky Housing Corporation, a place where I used to work, they own a state housing finance agency. They have subsidy dollars as well. And, of course, Lexington and Fayette Urban County Government with our affordable housing fund. Now, what I mean by subsidy dollars, it's not all grants. Subsidy dollars include low-interest loans. When we make a loan, it's anywhere from 0% to 2%. We have done one 4% loan, and it's all based on how we underwrite these deals. We also use forgivable loans, deferred loans, and grants. Grants, we don't use a lot of. I'd use those mainly for organizations like Habitat for Humanity, the Urban League, organizations like that who have a purpose of affordable housing. To a private developer, I would use a forgivable loan where we hold their feet to the fire, where a loan is forgiven over 15 years, but if you're out of compliance with our program guidelines, you have to pay us back. And, again, that last comment there, reduce that service results in lower housing costs to tenants and homeowners. Let me just check my notes real quick just to see if there's anything else that I wanted to say about that. No, we're good. Okay. The developers who have applied to the Affordable Housing Fund in Lexington include AU Associates and Winterwood. They're the largest developers of affordable housing in Lexington. The Lexington Housing Authority, the Lexington Urban League, Habitat for Humanity, we have funded several small businesses. Most of these businesses, what they'll do is they'll create their own LLC for their rental portfolio, or in some cases, they'll have a separate LLC for every rental project that they have. And that's more for a legal purpose than anything else. There are other Kentucky developers as well as developers from other states that have developed and preserved affordable housing units in Fayette County since the inception of the Affordable Housing Fund. I can tell you this, once you have money, developers want to know how they can use it. Believe me. So, let's talk about the Affordable Housing Fund in Lexington, how we have utilized the resources that we have received. From fiscal year 2015 to 2025, the city council has allocated over $31 million in, quote, general funds to the Affordable Housing Fund. And then when the city received the ARPA money or the COVID relief money, they allocated another $17 million of that to affordable housing. So, a total of just over 48, almost $48.3 million. In addition, you heard me talk about those loans. Over the last 11 years, we have received back payments on these loans of $6.1 million. We've invested in several pre-development and construction loans, and once those loans are repaid, and obviously there are some permanent loans as well, but once those loan receipts come in, we are able to recycle those dollars into additional affordable housing developments. Overall, we have committed $52.9 million of these funds for affordable housing developments to fund 3,661 units at an average cost of $14,466 per unit. Again, we provide gap financing. That financing is needed to ensure that the development can be funded, it's financially feasible, and the development can charge lower rents to the tenants. I will say this, that before the pre-COVID, our funding per unit was less than $10,000. But since interest rates have increased, since construction costs have increased, we have seen a greater need. We've had to invest more of our dollars into affordable housing developments, so now we're averaging just under $14,500 per unit. I think a great number, and this is what I sell to the city a lot, is this is economic development. Outside funding in our 3,661 units is over $474 million. That's from private investment, other government resources, other federal resources, just money we've been able to leverage over the last 11 years to develop affordable housing. And I put this number in there just to balance everything out. The cost so far, the cost over the last 11 years to administer the program has been $1.5 million, almost $1.5 million. The affordable housing fund is governed by an affordable housing fund board, that board includes 13 members. There are several bankers on this board. The reason that I want bankers on the board is, well, I have a financial background as well. I want people looking over my shoulder to make sure that these deals are financially feasible. Again, I don't want to fund a development that's going to fail in five years, six years, seven years, whatever. I want these to be long-term investments for the community. And let me point out that as much as I tried to check my work on this presentation, I messed up this slide. The Vice Mayor Dan Wu is no longer on the board. Council Member Whitney Baxter took his place, so I apologize for that oversight. But Whitney Baxter is now, she and Hannah are the two council members that are on the board. And the board makes all decisions. I don't fund anything without board approval. No funds are released unless the board allocates those dollars. I will look, I will go through this application process, or developer will go through this application process, and number four is board directors review, and their review then determines the amount of funding as well as the terms of the funding. Is it a loan? Now, obviously, I underwrite every one of these transactions, and I give, if you will, recommendations on how we should fund a specific development. Let's see. I think that slide's pretty much self-explanatory. A couple of these are, we do have funding criteria. We do not use a scoring process. We do it, we operate like a bank. We have an open window, if you will, that as long as we have money, you can apply. And I know what's in the pipeline, so if somebody comes in and says I need four million dollars, that's not feasible. They say I need 1.5, I know what's in the pipeline, I know what has the potential to be excellent projects, and I want to fund those. So I work with the developers to come to an amount that I can present to the board all of the developments that I think have a chance of being approved and will serve the community well. But these are our five criteria. I'm going to talk a little bit, just about a couple of them. I think some of them are self-explanatory. The design of the development, that includes the construction type, the square feet of the units, the square feet of each bedroom, amenities, that's very important. Are you located near banks, near shopping, near public transportation? All those things. And then what amenities are included in the units? Do they include community rooms? If you're going to have children, do you have a playground? You know, obviously things like HVAC, appliances, things like that. All of that's very important for not only for the marketability of these developments. If you don't have certain amenities, you're not going to attract the population that you're trying to attract. Another important factor here is financial feasibility. As I described earlier, we do not want to fund a development that is not financially feasible. It doesn't have a financial plan to succeed. Capacity development team, that's very important. Obviously, you'd have to have a good developer. And just as important is that property manager. Who's going to be managing these properties once the work's finished? You know, it's critical to try and meet the needs of the tenants who reside there, and that depends on it, and to maintain the property. And that depends on a very good management company. And readiness to proceed. We want these deals to be ready to go. I'm not going to fund something that's, or I'm not going to take it to the board. It's a year away from getting started. That's just a waste of our resources when there's other developments in the pipeline that are available to be funded. Just a summary. I talked about, you know, forgivable and repayable loans, and so there's the breakdown of how much we've allocated from the general fund. And as you can see, this is just from the general fund. This does not include the ARPA dollars. So a little bit less per unit from the general fund than ARPA. Now, why is that? Well, first of all, before I go into that, just point out this last little bit down here. Eventually, we will get to, based on the deals we have now, once we start receiving all the payments on the loans, we will generate another $834,000 annually from loan payments. And this is in addition to what the city provides for us. But again, like I said, why did we spend more per unit on the ARPA funds? Because we try to serve lower incomes with those dollars. We felt like coming out of Washington, that was the purpose of these dollars. So everybody we served there was at 60% and below, many of them at 50 and below. We funded developments that included 45 accessible units for seniors, which is a huge need in Lexington. We do need more accessible units. 34 units of permanent supportive housing, another big need. And it's permanent supportive housing is housing that provides not only a place to live, but supportive services as well. To get that, to accomplish that, you have to have a developer, and if you will, married to a service provider. Because developers don't know anything about providing services, and service providers don't know anything about developing housing. So you need to marry those two groups, and when you do that, you can come up with a successful permanent supportive housing project. And again, we have a significant need in Lexington for that. But as you can see, we allocated almost $25,000 per unit of SLFRF dollars or ARPA dollars. This just shows you, these are the number of units we've preserved versus the number of new affordable housing units that we have constructed or are under construction. Obviously, all 3,661 units are not in place. Some of them are under construction at this time. Those, that's the number of units that have been allocated by the Affordable Housing Fund Board. This is just what I've emphasized in the beginning, that 85.8% of the units we have funded are for households whose incomes are at or below 60% of their median income. We try to keep the rent affordable and to serve as much as we can lower income populations. Now, the housing credit program only serves those at 60 and below, and we're not going to be able to do that. The housing credit program only serves those at 60 and below. And so, when we invest in larger developments, obviously, we're automatically serving that population, which is another great thing about housing credits is they do serve lower incomes. This is based on 2024. We haven't completed all of our compliance reviews for 2025. We do do an annual compliance review of every development that we funded. The average household income that we served was $22,575. And these are the rents that are paid by the tenants. These aren't necessarily, they're not, and they're not the rents that are being charged on the developments. But when you take out rental assistance or other types of assistance being provided to the tenants, these are the average rents that are paid by the tenants, which are great considering what the rates are now in Lexington. Now, put that in perspective, and I'm sure these will go up each year. To put that in perspective, when we receive application, this is the range of rents right now that we're seeing included in those applications. And I will tell you back in 2015, for a one-bedroom rent, we were seeing between $500 and $550. So, you can see how rents have increased in Lexington. And let me go back to this. In some of these three-bedrooms, the three-bedrooms affordable rents are pretty much the same as market because in certain areas of Lexington, that's about as high as rent as you're going to be able to get anyway. When I discuss these rents with developers, my goal is to try and get them down as low as possible and still make the deal financially feasible. I'll work with them on that. And another factor is, what incomes are you serving? And if you insist on charging a little bit higher rent, then I'm going to say you can afford to pay me back some money. So, that's an important aspect of that. I primarily focus the loans on developments that serve between 60 and 80 percent of area median income and the forgivable loans and grants to those who are serving people under 60 percent of area median income. Another important element in all of this and who we house are those that are special needs populations. The largest special need population that we have served, that we have funded with our funds, are the elderly and or the disabled. I will tell you this. Because I'm elderly too, I don't like to say the word elderly. I say senior. Every senior development that we have funded has always filled up within three months. Let's just say three to six months. There has never been a delay except during COVID. That's the only time there's been a delay. This demonstrates the continued need for quality affordable housing for our senior population that we're trying to serve. And so, given all these special needs, 42 percent of the units we have funded have been specifically for that population. Now, I'm sure there's others that are living in our family developments, but they're just not specifically designated for this population. Okay, let's talk about some challenges that we face. The biggest challenge, well, they're all big challenges. I've already mentioned rising interest rates and how that increases the need. What do rising interest rates do? They increase the debt service payments. So, what does that result in? You need more subsidy dollars from me, either in a lower rate loan or forgivable loans or pay it maturity loans. The increased cost of property management, this is a huge issue right now. Quite frankly, property management companies are having trouble hiring and retaining staff, and therefore, they're having to pay more for them. And it has become a major issue, and it's not only in Kentucky, it's throughout the country. Construction costs, while they've leveled off some, they continue to increase. And then, especially in Fayette County, acquiring viable and affordable land. But I will say this, our developers, the developers that have applied for affordable housing funds, have been very creative and very diligent in locating viable and somewhat affordable land in Fayette County to be able to fund their developments. So, next fiscal year, as we look ahead, as I mentioned before, we do need additional permanent supportive housing units. I would like to fund more home ownership units. Quite frankly, we've only funded like 21 home ownership units. Everything else we funded is rental. The problem is, with single family home ownership, is that most of the population we serve can't afford, with interest rates where they are right now, home ownership. And it also combines with their own personal debt. So, we're trying to find ways to make it affordable. I know Louisville struggles with the same thing. Just trying to find ways that we can do more home ownership, because we recognize the fact that home ownership builds solid neighborhoods. And, you know, if possible, we want to make home ownership work in this community. The Transylvania development, I know you all have heard a lot about that. That's online, you know, and looking at ways that our resources are going to be used to supplement other resources to the development. And then, we recently had a housing needs analysis that showed a tremendous need for additional housing units in Fayette County, of which I think 75% of those units needed were, quote, affordable for populations at or below 80% of area median income. And that's it. So, let me get back to where I can see you. And stop sharing my screen. Okay. And with that, I'll open up for any questions that anybody may have about the program, what our plans are. Any questions from this force application that I did not answer? Yes, sir. Mr. McQuadey, this is Bruce Nicol. Thank you for all your work. I mean, the numbers show it's a highly successful program you've put together that's benefited many families in our community. And I really like what you said about leveraging the dollars to add economic development in the form of labor, building materials, jobs to construct these properties. So, it's a net benefit economically for our community. What I'm interested in as a member of the planning commission has to do with the federal low-income housing tax credit scoring process. That program is serving 60% of area median income, which aligns with your 85% of the projects that you fund are 60% of area median income. So, as we look at the federal low-income housing tax credit program, how do they score site selection in order to generate the highest number of points so that developers in our community have an advantage to access those competitive dollars? Can you talk to me about the correlation between scoring sites with the federal program in our community and how we as land use group can help promote those sites so that they score better, so we receive the funds, so that we provide the housing for 60% AMI? Well, first of all, I used to have control over that process, but in my prior life at Kentucky Housing Corporation, I don't anymore. But, to answer your question, that scoring criteria is determined by Kentucky Housing Corporation, and quite frankly, it changes every two years. There was a time period where they did not want to fund any developments in what's called a QCT, a qualified census tract. Those are normally low-income tracts. Those lower-income tracts receive, if you will, a 30% basis boost that can attract more equity investment into their transactions. They have since reversed that. Let me say this, and this is something I didn't mention. Geographic distribution is very important to me. Our affordable housing developments have been allocated now in every district, every council district in Lexington. There's no goal at all. I think it's bad public policy to centralize everything in one area. I understand why Kentucky Housing Corporation had it that way several years ago, but in a lot of ways, they've gotten away from the site-specific requirement to where they want donated land. Well, developers find a way around that. What they do is they create an LLC to buy the land, and they donate it to another LLC, and it's all owned by them. Believe me, developers can find ways around a storing system, but let me say this. I really don't have any control. It's really up to Kentucky Housing Corporation, but for this funding round, to my knowledge, there isn't any specific site that will get you more points. Now, let me say this. They do, in their qualified allocation plan, which is how they govern the affordable housing fund, say that at least one development in Fayette County will be funded. They have one Fayette County development and one in Louisville, and one in Northern Kentucky. So, we will receive one, and I'll also say that since the inception of the affordable housing fund, Fayette County has been very successful in garnering tax credit developments, and part of that is because we have the subsidy dollars to make these deals work. So, I really can't answer your question, Bruce, completely because, frankly, it changes every other year. Thank you for that answer, and I was aware that it does change every year. What I am thinking, well, I'll give you some context. As we have developers come to the planning commission seeking a zone change or approval of a development plan for an affordable housing project, we still encounter bias against the renting population in our community. What can we do as a planning commission to eliminate the, the, to promote more affordable housing in specific zones that align with Kentucky Housing Corporation's low-income housing tax credit product, and what you do to provide cover to eliminate the public's, or not to eliminate, to counterbalance the public's bias towards affordable housing? How can we provide them cover? Can we say, we, as a planning commission, are going to prioritize zone changes or development plans that are in Rick's affordable housing trust fund? What are some creative things that we can do to help fast track the development that you need from the land use side? I think, okay, a couple of things. One is we, we require all our applicants to meet with the community so there's no surprises. We want them, we want the community to know that these, these affordable housing developments are coming. Second of all, there needs to be, and I've tried to do this my whole life, emphasize who's living in these units. There's, there's connotations out there that everybody living in these units is on section 8 rental assistance and doesn't have a job. That can be further, that couldn't be further from the truth. I can tell you that in our non-elderly disability, those type, in every development where we have a population that can, that is eligible to work, over 80% of the, of the people who reside there are employed. They're employed at Amazon, they're employed at University of Kentucky, they're employed at restaurants, hotels, everywhere throughout the city. I think there needs to be an education as to who we house. Now, you're still not going to eliminate it, and I know you, you can just try and minimize the criticism, but still, when a chance for a tax credit development comes to Lexington and the city has a chance to take advantage of the resources, which includes not only that we're going to invest money, but it's economic development for the city, I just think it's important to emphasize that aspect of it as well, that look at all the money we're bringing to the construction jobs. You know, I had one person say the guy delivers pizzas to the site. That's economic development, and it truly is. So, I think that's another way to emphasize the importance of that, and that, you know, we're just not, we're trying to help those who work in our community be able to have a place to call home where the rents that they're paying or the mortgage that they're paying does not prevent them from being able to do, you know, to fund other necessities in their life. That's, you know, that's the best answer I can give you. Now, from the other standpoint, let me say this. The Department of Planning in Lexington, they've been great to work with. If there's a deal coming up, the first thing I say is you need to talk to somebody in the Department of Planning to make sure that, A, you know, this fits with their plans, with the community's plans, especially if something requires a zone change, all those things, and we work hand in hand with the Planning Department to make sure that we're on board with them and they're on board with us, and the Planning Department over the years have made several changes that, quite frankly, have really been beneficial to affordable housing. One was the reduction or, quite frankly, the elimination of the parking requirement because many of the people we're trying to serve, especially when you look at the number of elderly units we have, many of those people don't have cars. They use public transportation. So, those type of changes that the city has already made have been very beneficial to the development of and the promotion of affordable housing. I think that's fantastic, and I would also encourage, if there's anything that we can do in the form of a zoning ordinance text amendment that may come up, may be present now, or may come up in the future that will help you deliver more safe, comfortable, affordable housing, I would, I know as a committee, we would love to take that forward. So, we want to, I think the reason you're here is because we've got a strong, a group that is passionate about providing safe, comfortable, affordable housing, and we need recommendations from those participating on how we can provide more of that style of housing, whether it's increased density in R2 zoning, whether it's parking requirement reduction, whether it's whatever it may be. We recommend, or we please welcome any suggestions that you may have that could lead to a zoning ordinance text amendment to provide the safe, comfortable, affordable housing that you're championing in our community. I'll do it. This is Judy Worth, and I want to tell you, first of all, I didn't write all those questions. They came from multiple members of the Planning Commission. I just put pen to paper there. A couple of quick questions. If I'm recalling correctly, ARPA funds were time limited, is that right? Yes. They run out when? They had to be committed by December 31, 2024, and we allocated, obviously, all the dollars that were allocated by that date. They have to be spent by December 31, 2026. We will have all the funds expended December 31, 2025. There are two developments right now that are under construction that are being completed, and they'll both be finished before the end of the year. And any risk of clawbacks on that? So, just in case, I've asked those developers to draw our funds first, which I never do. I always retain some, and I always want to invest pro rata with the other investors in the development, but I've made an exception in this case. I want to spend every dollar. So, honestly, I'll have that money spent probably in the next two months. Great. On a somewhat sideways question, we've had a couple of developments come through lately that were churches developing senior housing. Is trend? Does it lower land costs? Can you talk about that a little bit and can we expect to see more of that in the future? Yeah, that's a good question. The two you've seen, right now I can't think, I don't have any others in the pipeline at this time. I know that the church on Martin Luther King Boulevard and then Woodland Christian Church, that development did result in, if you will, lower land costs and that was a really nice collaboration between the neighborhood, the church, and a developer. And that's the way I'd like all of our projects to be done. I don't think, you know, once the developer agreed to some of the neighborhood's requests as to how the units, you know, the height of the units and how they were going to be constructed and the construction materials, everybody was on board. I'm not sure that something will continue, but it's certainly a possibility, absolutely. Let me ask you this question. On the home ownership side, where you're having not a lot of use, we in the farming community are doing a revolving loan situation where we get so much money a year and we buy down the interest rate on a fixed rate. The application has to come from a local bank or farm credit or ag credit. They bring their presentation to us. If what we do is we buy down that rate by 2% and set it up on a fixed 15 to 20 years, could that be a process that you could use for this home ownership? Absolutely, and I'd be interested in talking to you more about it and maybe ways that we can partner to make that work. If that's possible, I'm open to any idea. I know right now, you can't build a quality single-family home in Lexington for under $300,000. Maybe you can, but let's just say it's close to $300,000. When you look at a 7.5% mortgage rate and what the population that we're trying to serve or that we are committed to serving, what they can afford is probably at the most a $150,000 mortgage. At the most. That's $150,000 in subsidy, which is very difficult, but if you can lower interest rates, that saves a lot. We're finding out that when you need that much subsidy, it just makes it very difficult to house the population we're trying to serve, but I would love to talk to you more. I'm very interested in doing more home ownership if we can make it financially feasible. Well, let me finish up by telling you that over 20 years, now we have a revolving loan fund of $160 million, and that's perpetual. That's great. But my point is it was funded at a certain level every year, but you have to encourage the local banks to want to participate. That's the trick part, but I'd be glad to talk to you about it. Yes. I have a question related to the... I'm assuming that other cities have an individual like yourself sitting in the position doing affordable housing and such. I was curious to know, do they have to report out, like this report you've given us is great. What I'm looking for is comparable information to find out how we're faring as a city compared to other cities as such. The only other one that... Well, I mean, there's several throughout the country. The only other one in Kentucky is in Louisville, and a lady by the name of Christy McCravey runs that program, and she and I compare notes quite a bit. I can assure you that they're doing pretty much the same thing that we're doing. Now, they have a lot more resources than we do, so they can do some more things, but just the way we compare notes, and we talk maybe every other month, but just in comparing our programs, they're pretty similar, and we're trying to do it the same way. Also, I try to find other ways that we can utilize these dollars to make them work better in any way that we can. I've talked to several communities, but quite frankly, I find out that several communities call us and ask us what we're doing, because they hear good things about what we're doing. I can tell you, Savannah, Georgia called me maybe three years ago and said, we want to implement a program like yours, and how do you make it work? I have a meeting next week with some folks from Wichita, Kansas, who are interested in something like this, but the more contacts I can make and the more ideas we can share back and forth, we can come up, maybe we can develop some ideas as to how we can better use these resources. There is no perfect way to do it. I think we've done a good job with these dollars, but that doesn't mean there aren't possibly other ways out there that we can use them even better and serve more people. Just out of curiosity, where did the number 22,000 units short come from? That's looking at the number of units needed, and Charlie, help me here if you're in the room, over the next... I think some of it's an immediate need for those who are, if you will, cost burdened in the community, which means they're paying more than 30% of their income for their housing needs, and also people who need houses, and I think it also projects people moving into Fayette County over the next four, five, 10 years. That will be under the median? In other words, is that 22,000 housing shortage or a shortage of affordable housing? It's a housing shortage overall, and I wanna say, I just can't remember, I should have looked this up, I think 75% of those units that are needed were for those at 80% and below area median income. And Charlie, correct me if I'm wrong. I have a question real quick. This is Ivy Barksdale. When it comes to approving developments for affordable housing, is there an amount of... A percentage of the units that are required to be affordable, or is it the entire development? The developments that we have funded so far, 99% of them, the entire development is required to be affordable. Okay. There are a couple, and actually there's one I'm working on right now that proposes a certain number of affordable units versus, I think it's a 24 unit development, and I think he's proposing 12 of them be affordable for those at 80 and below. The biggest thing there is trying to make the numbers work. Developers have a hard time with a mixed use development, but there are ways possibly to make it work, and that's what we're looking at. But to answer your question, the 3,661 units, like I said, all but two that I can think of are 100% affordable units, all of them. And are they all accepting of vouchers in Section 8? Yes, that's a requirement that you have to accept vouchers. Now, you can have your own tenant selection plan, and we review those tenant selection plans, but one of the requirements is you cannot turn down a tenant simply because they have a voucher. Okay. I know at one point Louisville had a regulation that said no discrimination against where the money comes from, and I think it has since been struck down, but what can we do? I get calls probably a couple of months of people who are looking for a place to live, particularly those that are looking to live in a house, and they're not able to find that housing because there's so many landlords that don't accept Section 8 vouchers. Is there anything being done there? And a lot of times, those end up being people who are trying to make ends meet, but their housing costs are so far above where they need to be. Has anything been done or is anything being worked on to help that situation? Well, I think the Kentucky State Legislature kind of killed that effort. I know there was an effort made in Lexington, at least a discussion about non discrimination on income sources for housing. The only thing I can tell you is I'm trying my best to create as many units as I can with the money that I have so that there's more options available for the families you're getting calls from. That's the best answer I can give you on that because that's a... Right now, they don't have to take the voucher, but in our developments, any development tickets, $1 of my money has to accept the voucher. That's good to know. And one final question. When it comes also to Section 8, the ability to turn that voucher into a mortgage voucher, and are we doing anything to encourage more of that or pairing it with some other programs? One that comes to mind is the NACA program, which is new to Kentucky in the past two years. And a lot of the things that we're talking about as far as reducing the interest rates and that the program actually features no down payment and no closing costs, but are we doing anything to stack those types of programs and help create homeowners out of... A lot of people who have a desire, but their income is not quite there. To the Affordable Housing Fund, we aren't doing anything. And I don't know if the Lexington Housing Authority has a program like that. I know that... Yeah, they do. They just don't. Okay, they do. They would be the ones to ask about how that program works. Now, certainly, there was a voucher to homeownership program, and they needed a little bit more subsidy. They could certainly apply to the Affordable Housing Fund and receive dollars from me as well if that was... They needed that to get into that home. Absolutely. But we don't have, if you will, a formal partnership with the housing authority on that program at this time. Okay. Thank you. Rick, this is Larry Forster. You mentioned that you have projects in every district in Fayette County. Just for our standpoint, can you provide that, not right now, but at a later date so we can see that? Because I know we get hit a lot. Mr. Nickel spoke on it, not in my backyard, but apparently this is in everybody's backyard. So it would be nice to point that out if we're having a conversation with citizens. We can just let them know that, well, this is already here. Because I know a lot of folks on here may not realize that as well. But one other thing that I picked up on is the workforce housing, the comparisons between the two or differences between the two and the senior housing. So I do appreciate you specifying that. Also, you didn't touch on a little bit about the CHOTO program. Does that come into effect with you, the community housing, urban development organizations? I know you hit on a few of them, but are there any more in Fayette County outside of Fayette County Local Development and Habitat for Humanity? But Habitat for Humanity is actually not a CHOTO. Are they not? Okay. No, I think REACH is a CHOTO along with the Fayette County Local Development Corporation. Those are the two CHOTOs. Now, Habitat is eligible to use home funds. And the CHOTO is just a set aside of the home allocation, if you will. It's still home program funds, just set aside for certain groups that meet the CHOTO requirements, of which there's two in Lexington REACH and the Fayette County Local Development Corporation. And yes, we have partnered with both those organizations. Okay. We thank you. I'm sure we probably would like to have you back. Sure. To be honest with you. Absolutely. Not to let you go, just to ask Mr. McCready, this is Mike Owens and I apologize. One, I came in late. I'm curious, you were talking about 3661 units. What sort of time span is that? Over the last 11 years, since the fund was created in September of 2014. Are you on track as far as 2025 to do that average number again? Yes. In fact, 2025 has been pretty good because we've got some fairly large rental developments. It varies from calendar year to calendar year, but overall, the averages are met. Now, 2025, we've got several larger developments that have just been placed in service or under construction. And I'll give you an example. Two years ago, there's a place, Kearney Ridge, out Georgetown Road, towards Scott County, that had 252 units. So obviously, that's gonna skew it for that year. And this year, we have a 45 unit development that's under construction, and we'll have 71 additional units under construction here by Thanksgiving. And then there's others that are under construction, but I'm just talking about larger developments. And of course, Woodland Christian Church is... I need to look that up. I think it's 31 units or something like that. So we have several units under construction at this time. Okay. One other thing in this one chart that you had, I think it's interesting, affordable units preserved. Is that... I'm about to presume that's like renovation projects on existing units? Yes, sir. Yes, sir. Okay. Many of them... I'll give you an example. The low income housing tax credit, which is a main mechanism in which projects are funded. At the end of their 15 year compliance period, they can either be... Yeah. Kentucky Housing Corporation requires a 30 year compliance period. But there is an option, because the IRS doesn't care about it after year 15. So there is an option for that owner to sell that property. And so it's good that we have these resources available, if you will, affordable resources available to maintain these properties and make sure that they still stay in the system or in the inventory of developments that are for folks whose incomes are at or below 60% of AMI, a very mean income. So these preservation dollars are very important. And there's also several others out there that were just not necessarily tax credit developments, but others that preservation is critical to maintaining those units and keeping the families there. I can tell you that... Let's just take a smaller development that we recently funded. There was one gentleman that was living in a one bedroom unit, had been there for 10 or 15 years. He was paying $575 a month, which I can tell you is very low. And I talked to the developer and I said, hey, we're not in the business of evicting anybody. You can rehab these units and you can charge $700 a month, but not to this person. You can't raise his rent $125. I want you to do everything you can to keep that individual in that unit. And they made a commitment to me that, hey, he can only afford $575. He's been there his whole life, or not his whole life, but he's been there the last 10 or 15 years. We're not gonna force him out. We're gonna keep his rents at $575. Now, does that mean when new tenants come in, they might charge them $725 instead of $700? That can happen to keep the project financially feasible. But the vast majority of the development community that we've worked with, they are concerned about the people we're trying to serve and making certain that they can stay in those units. Thank you. Okay, Mr. McQuadey, I think that's all the questions for today. Thank you for your time. I really appreciate it. Okay. Alright, thank you all for having me. Alright, have a good day. Thanks. Next, we have so smart program, Jada Griggs. There we go. Thank you. It is better. Thank you. I am Jada Walker Griggs. I'm a program manager senior for sustainability with the city of Lexington. I am in the division of environmental services. I'd like to thank you for your invitation today to talk about the update for so smart. And so, just to give you a little brief overview of so smart. So this program was launched in 2016 with an initial grant from the Department of Energy. The goal for this program is really to reduce solar soft costs. They said those that are not associated with the hardware itself. But this program is a nationally recognized program. It gives you free technical assistance, reviews, your programs associated with energy. And for us, we're looking at it from really a rooftop solar standpoint. So if you take a look at the slide, this destination and the requirements for so smart. So the criteria is really to establish solar energy best practices, to measure what local governments are doing in a way to kind of streamline and make it easier for someone to get solar. And so they have four. The criteria is for four. So bronze, silver, gold, and platinum. And so on the side you'll see the categories. It's blank. I'm going to back up just a little. So you would think for bronze it says 60 points. That you could get any 60 points and get bronze. Well you can't. 20 has to be for one category, 20 for another, and 24. So it's a very detailed process. And in order to go from bronze to silver, you have to complete all of the bronze and then meet the requirement for silver and so on and so forth. So there's a roadmap that you go by. We do have a technical assistant that has been working with us through their process. I have been facilitating this process. So these categories and these are where we looked at permitting and inspection, planning and zoning, government operations, market development, and community engagement. And so you see those again on the the left of the screen. But here's what LFUCG, once I pulled all the divisions together, and I will say that I have worked with planning, several sections in environmental services, building inspection, code enforcement, economic development. But once everything was done, what you see on the right is what we're doing that's new to be able to get this. We have an online checklist. We'll have an online checklist. It's not up yet because we're waiting on a few things. We have to have a new website. All things solar. So Solarize Lexington. All the solar that we have on our facilities here for the government, you'll see there. Anything that has to do with solar that the city is involved in will be on that page. And that will include what is required to get the solar permitting and that is online as well. So a big thing is we had to be able to guarantee that anyone that wants solar, rooftop solar, for their resident will be able to get that done in three days requirement. There was not a requirement for commercial. And but I believe that we have ten working days for commercial. So they also had to participate in the online permitting training and then also inspection training. So this to the right, you'll see it says that we've completed 245 points. We have over 300 points already. So when you see that, you think, oh wow, we can get platinum. But no. What we're pursuing is gold. And so we should have no problem getting the 20 points. One of the last, everything has been reviewed and ready to go. We're just waiting on the solar energy systems ZOTA. That's going to be before committee on July 1st. Let's see. Once that's done, we'll be able and codified, we'll be able to, I'll reach out to the technical assistance and then they will take it and look at it, then move it through their process and probably take about three weeks. But we initially started this process in December, just looking and seeing what we had. We were very organized. He complimented us and said, so you all are already ahead of the game because this is where I tell people, here's what you need to do and you already have it. So we've done really well and I'm quite impressed with what we're doing. We have to be able to pull it all together and pull the website up so that'll be launched as soon as we find out that we get it. We'll push it out from there. So any questions? How is this program funded? There is not a cost to it. The technical system is free. Initially, the funding was given through the Department of Energy, but we are not paying to participate in this program. They have outside sources funding. Okay, so anything going on in DC right now won't impact this particular program? I haven't heard yet and so far there hasn't been a problem. I believe that some of the technical assistance that's that's going on is still funded, but I've been told that there's not any problem that said. I know. There is a possibility that it could end, I guess, at any moment. So I'm hoping to be able to get through this process. Yes. I'm just curious about how this is going. I actually went through the process of a solar assessment on my house, but I'm hearing hallway, I think it's hallway feeds, am I right? It's sort of the poster child for a commercial application. Are we, are we seeing many businesses interested in going through this process? Well, it's not really that they would necessarily go through the SoSmart process. This is just, this is a thing to show that the City of Lexington has gone through the evaluation and is doing what they can to make it easier for them. It is our processes they have to go through, but as far as commercial. For the beneficiaries of the process you've set up, what do we know about what's happening with that? And really, it benefits more so residential than commercial because, you know, we, the only reason that we will not be able to get platinum is because it requires an instant turnaround on permitting, and then we were told by Director Carpenter that they would need at least one day. But if that ever changes, then we could go back to them and then get it upgraded to platinum. So it's just something that shows that, you know, with me being in sustainability and us having the Empire Lexington plan, this is part of the process. What can we do to do measures and implement, implement initiatives and things to make it easier for us to be able to do those things? And, you know, the affordable housing piece also has that energy efficiency piece and other things for, like, cleaner energy sources. And so, for me, it's another piece in the puzzle for us to keep doing that and go toward those goals. Absolutely, yes. I was glad to hear Rick's presentation. You said you're waiting on the outcome of the ZOTA on July 1st? Yes. That's one we've already had, or is that one that you're proposing to us? I can take over that one. Okay. So, that is the very same Zoning Ordinance Tax Amendment that you all reviewed earlier in 2024 that Council has been, has set to the side, but it is going to the GGP on July 1st. So, they're bringing that, they're going to have discussions, and we're currently interfacing with Council as they kind of look at that text and decide to kind of move it forward. But as it stands, all that we have on the books is that very, very limited language. So, a lot of what you all set up in that Zoning Ordinance Tax Amendment was in line with sort of what SolSmart was looking for as far as best practices. So, we'll be cognizant of that as we move it forward, as well as what Council wants to do on some of the bigger issues. Jayda, it was nice to meet you, too. Thank you. My pleasure. I'd like to have you come back sometime and tell us about the Office of Sustainability and all the other things going on in there, too. Well, I'm happy to. I will actually be presenting before our Environmental Quality and Public Works Committee on December 10th. Okay. So, thank you. Thank you. Thank you again. Thank you, Mr. Duncan. Thank you, Mr. Chair. I want to give you all a bit of an administrative update. This is the last work session you'll have until the July session because the regularly scheduled time in June is a city holiday. So, what that means, though, is you'll recall that you elect officers in June and the Planning Commission work session was one of the days that fits into that schedule. So, what we will be doing on the second, the subdivision meeting on June the 12th, which is ordinary for you for electing officers, the Chair will seek a committee to nominate officers. And then that report out usually takes place at the next work session, but since there isn't one, we'll have that report out then on the zoning at the end of the zoning hearing on June the 26th. And then you'll be back on your regular schedule to elect officers on July the 10th at the first regularly scheduled meeting in July. So, just wanted to prepare you all for that. You should be able to follow your schedule ordinarily, except there won't be a work session to report out. We'll do that at the next zoning hearing. And Mr. Chair, just as a reminder, then the next meeting of the Planning Commission is next Thursday, June the 5th. Committees 830 and 130 in this room. One question, Mr. Duncan. Have we had any progress on the resolution that we passed at the last meeting? Well, we delivered that to the Council, as you all requested. So, that's been delivered to them. They are aware of it. They ask a question about it at Tuesday's Council work session, and then they are set to take up the ZOTA this evening, which is scheduled for first reading, but we do believe they will be making some amendments before they give it first reading tonight. Thank you. One other comment. First of all, let me say that thanks for bringing in the information that we got today for affordable housing. I think this is a really good start, and maybe it was just me and my perception. I thought we were going to have the different entities like the Urban League, the Lexington Housing Authority, and anyone and everyone who was involved in housing to give us some additional information related to what they were doing, so we can get a comprehensive review about what's going on in the city. Where I'm thinking this is all headed to is what role can we play as a Planning Commission, either in terms of helping incentivize, speed up the processes, or whatever policies that we could need to set in place to help move this process along. Are you asking, Mr. Wilson, if you, to hear directly from the providers what the impediments are? Well, yeah. Well, I'm not having conferred with my colleagues here, but I was thinking, I would like to hear from some of the other people who are doing the providers, yes, and to see what some of the areas of concern that they may have, and then we'll get a more comprehensive perspective about affordable housing from all of their perspectives. I think we'd be happy to make that, especially if you all have some particular entities you want to come, just let us know, and we'll make sure that we all love them. Let me add to the other side of that, which is that's developer side, putting our chairperson on the hot seat here, uh, it would be nice also to hear from some funders. I know we've got limitations in terms of what financial institutions are willing to do, but I think it would be good to hear from those who are doing it, and maybe can help us think about how to make this more appealing or more doable for the financial side too. And we don't know who those are, Ms. Worth, so we would have to rely on others to tell us who the funders are, and we probably still wouldn't capture them all, but you can certainly get a representation. Right, that'd be good. Well, just to take it before we adjourn, we know who four or five of them are because they're the ones that funded that transit project, so the rest of the banks in the city of Lexington have to step up if you're going to get it done. It has to be sustainable, it has to be long-term. It's no different than funding agriculture, same thing. If this only lasts for five years of this comp plan, you're not going to do what you need to do, and the need to do has to be sustainable, and what we did with agriculture is a lot bigger model, but it certainly can work, but the banks have to participate. I'd offer that, you know, even if right now they're not participating, having some of them around the table to say why they don't feel like participating, why they don't feel like they can, would be just as valuable as to those that are. I think that'd be a tough invitation to accept, but if you know who would come and take those questions, we'll be glad to reach out to them. I'm sure some of them would do it. They're strong-minded. It has nothing to do with that, and the project that's with the five banks, there's more to it, and is the reason why the only five banks participated. I can talk to you about that offline. I'm not going to talk to you about it online, so I'd be happy to, but that's a good project, but there's other things behind that you got to understand, too. Banks, we all compete, so you got that piece in it as well. Frank, you make a good point, but if you're trying to do the right thing for the community, then let's get the right people. So, there's just, you know, Jim, I can help you get, you know, we don't need everybody. That's just too much, but maybe one or two institutions. B. Nickel knows a couple contacts, too. I don't want it to get to a point where a lot of this would get in real in-depth, and it's going to confuse you if you're not doing it on a regular basis, but if we can maybe give them some questions so they can, some high point stuff, because they can get in the weeds. Mr. McQuaidy didn't get in the weeds on a lot of things that he talked about with the low-income housing tax credit. That's, you know, it's important. There's also a rural tax credit as well, depending on where you're located, so, and that's all different, but we can, I can help you with that, and I will text Judy's comments, and I think this makes sense. I'll be happy to, and get off this hot seat. Could I put you in a hot seat one more time? No, no, I can't. Okay, well, I was going to say that, based on what Mr. Duncan has told us, we have a limited number of work sessions coming up. Now, this is where you are going to really love me here. You'll throw me off. It's an extra meeting. That's what I was thinking, that is it possible to have a special meeting where we can have just that? You're going to have to. Okay. I mean, I don't think you want to put it, but then we got to make sure that, well, staff is available. I get ready to say that's the other part. So, this is not going to happen in the next 30 days, as we know. Mr. Forrester, one of the things that we may be able to align the banks with us are the Community Reinvestment Act dollars, which normally provide lower interest rates for investments in underserved communities, which are normally qualified census tracts. So, what I'm trying to do is to put a through line through, which would be that, as we are evaluating development plans or zone changes, if they happen to be in qualified census tracts, we could be aware that affordable housing could be better served in those areas. Not to concentrate affordable housing only in qualified census tracts, but there are products that are available that would make affordable housing a little bit easier by providing a lower interest rate and helping our community banks use their Community Reinvestment Act dollars. So, what I'm saying is, if we can align product that's available with the banks to policy, that could be a tight fit where we can at least not impede dense multifamily development in those areas that could participate in Community Reinvestment Act dollars. Okay, I'm gonna get off this hot seat, and thank you, Ms. Wirth, but the meeting's adjourned. Thank you. Oh So So So It's midnight cinderella, but don't you worry none Cuz I'm Peter Peter the pumpkin teeter and the party has just begun Yes, yo Prince Charming Wasn't after all Cuz he sure seemed different right after the ball. I Guess more than horses are turned into rats And by the way, he's walking I can guess where your slippers It's midnight cinderella Time that you should know there's gonna be some changes in the way this story goes It's midnight cinderella But don't you worry none cuz I'm Peter Peter the pumpkin teeter and the party has just begun I'm gonna help you get over being under that spell You're gonna learn to love midnight side this pumpkin shell. I Got a few new magic tricks. You got mother came down And I'll show you what it means to them Midnight cinderella Time that you should know There's gonna be some changes in the way this story goes It's midnight cinderella But don't you worry none cuz I'm Peter Peter the pumpkin teeter and the party has just begun It's Peter Peter the pumpkin teeter and the party has now begun You I Scream Just too cool for school Sock, hot and soda pop Basketball and auto shop The only thing that got you off Was breaking all the rules James Dean, James Dean So hungry and so lean James Dean You said it all so clean And I know So I'm gone So I'm gone So I'm Gone Gone Gone