Officials with the Kentucky Housing Corporation recently went before the Kentucky Housing Task Force in Frankfort to discuss potential solutions to the housing issues and shortfalls currently impacting the state.
Wendy Smith is Deputy Executive Director of Housing Programs with the Kentucky Housing Corporation. She said there are many things the task force could do to help incentivize lower- and middle-income housing development, but there’s one thing she says is most important.
“Establishing flexible resources that really move the needle and accelerate housing production. Not small things at the edges, but something that really activates the larger marketplace. So, I’m here not advocating for our non-profits and our tax credit developers. I’m here advocating for the building industry and the building marketplace in Kentucky,” said Smith.
Smith said one such flexible option would be setting up a revolving loan fund, which has seen great success in neighboring states, and have been extremely successful in helping stabilize the housing markets and provide more affordable housing.
“We really recommend looking at things like a revolving loan fund, so that it doesn’t have to constantly be replenished, that it can recycle. And it means whoever uses it has to have skin in the game, it has to be a financially sound project, but this flexible, low-cost financing could make all the difference in it being worth building moderate income homeownership options versus custom homes,” said Smith.
Smith said that for builders, there is a lot less risk when building custom homes as opposed to other options, and that in the current economy, many are prioritizing that lower risk. She said this leaves many without appropriate, affordable options, and is contributing to the supply gap. She added that many solutions are on the table, but that lawmakers need to decide on one, and soon.