Sixty percent of Knoxville’s poorest workers pay more than half their income for housing. That doesn’t leave much for food, transportation, or medicine. Recognizing the problem, Knoxville Mayor Madeline Rogero created an Affordable Rental Housing Fund a few years ago to fill the gap in financing new low-rent apartments. But with Rogero leaving office at the end of the year, some local advocates are pushing the city to make the fund go the distance.
The squeeze on affordable rentals hasn’t abated during the fund’s first few years. Instead, Knox County landlords withdrew 770 housing units from a federal rental assistance program during that time -- making that housing unattainable for renters who could once use Section 8 vouchers to cover the portion of the rent they could not afford.
About 1,850 families are on the Section 8 waiting list for single-bedroom units, according to KCDC, Knox County’s public housing authority. At the end of last year, almost half of those with vouchers couldn’t find a landlord who would accept them.
These local conditions reflect a national crisis in affordable housing. The Affordable Rental Housing Fund is intended to fill gaps in financing new low-rent apartments. In the fund’s first few years, City Council put in $4.5 million -- then added another million when applications from developers kept rolling in.
Achievements so far
The money is leveraging nine projects withalmost 600 units. Of those, at least 216 must be offered at a rate that is affordable to people who earn less than the area’s median income -- usually half or less. (In Knoxville, the median income is about $66,600 for a family of four, or about $46,700 for a one-person household.) Many of the developers plan to offer reduced-rent units beyond that minimum.
Among them is HomeSource East Tennessee, which is building 24 affordable apartments that will be rented to seniors and the disabled. The need is painfully obvious: two hundred people are already on the waiting list, said Jackie Mayo, executive director of the non-profit.
“The city helps subsidize some of the amount that we have to borrow,” she said. “Without it, it wouldn’t happen.”
Other non-profit projects benefit veterans and homeless families. But the biggest projects are by for-profit Elmington Capital Group of Nashville. City officials say they doubt any of Elmington’s three new low-rent apartment complexes, with 430 units altogether, would have been built without the city financing.
The city fund is one of many funding sources for affordable housing. For example, KCDC is issuing its own project-based vouchers and planning to add affordable units when it overhauls the aging public housing complex Austin Homes.
But the city’s Affordable Rental Development Fund is more flexible than many other government housing programs. (KCDC itself is using the city fund to help finance another affordable housing complex with 53 apartments.)
“We use a lot of our federal funds to help with affordable home ownership and maintenance of affordable rental units -- those that are existing already,” said Linda Rust, the city’s community development administrator. “But what this fund does is -- it really helps to create affordable rental units... especially affordable to the lowest-income and most vulnerable citizens.”
She said it’s important that all the developers so far will remain owners of the housing complexes, staying accountable to residents and neighbors.
Stable funding, lasting impact?
According to the non-profit Community Change, 585 American cities have affordable housing trust funds. The most stable don’t rely on annual budgets. Instead, common revenue sources are developer impact fees, or other fees related to construction or rentals. For example, Columbus, Ohio uses a portion of hotel/motel tax from the city, and property transfer fees from the county.
Nashville and some other cities fill their affordable housing funds through a tax or fee on short-term rentals, like Airbnb. These have shrunk the long-term rental market in a city that already has one of the country’s most dire affordable housing shortages. Controversy erupted early this year when a Nashville city councilman suggested adding a new affordable housing fee onto the cost of each nightly rental.
Last year, a coalition of religious congregations called Justice Knox publicly asked Mayor Rogero to pursue a dedicated funding stream for affordable housing. Ann O’Connor, who serves on the Justice Knox Housing Committee, said developers need that reliability.
“If it is a stable source of income, then sometimes it takes two or three years to plan a project and they know that money will be there in three years,” O’Connor said. “They don’t have to depend on who the mayor is or who the city council is.”
Justice Knox also wanted the fund used only for housing that would be affordable to the very poorest residents, and to require rents to stay low for 30 years. Some current city-funded projects guarantee low rents for as little as 10 years.
But the mayor declined these requests. She said she doesn’t want to commit future mayors or city council members.
“I think Justice Knox and we are on the same side,” Rogero said. “We both want the same end goal. It’s just at this point they are asking for the specific fund, and that’s not something that we’re interested in doing now. We think that our model right now is what works for us.”
She said she plans to include money for the fund in her upcoming budget, but won’t say yet how much. She suggested advocates should push mayoral candidates for a commitment to the fund.
“The main candidates that are running right now -- I’m very comfortable that they will continue to support affordable housing,” Rogero said.
Justice Knox plans to keep pursuing the issue at its next community assembly on May 6. This time, it might direct its pitch to city council members or political candidates.
Many were invited to a presentation Justice Knox is hosting by Michael Anderson at 7 p.m. on April 25, at First Presbyterian Church. Anderson, an expert who works for Community Change, has helped cities like Nashville, Philadelphia and Pittsburgh develop funding streams for affordable housing.
O’Connor suggested the hotel/motel tax might be a good candidate.
“We’ve talked to some hotel owners here in town whose employees were living in their cars, they found out, so for hotel/motel tax to provide some of the income for the dedicated funding would really make sense,” she said.
That money currently benefits Visit Knoxville, the Knoxville Convention Center, and other marketing efforts.
Community impact
Some city council representatives are already focused on the issue. Last fall, Knoxville City Councilwoman Seema Singh-Perez teamed up with a local non-profit to hold five “quiet conversations about affordable housing” across the city.
Vivian Shipe, founder and director of the non-profit I AM the Voice of the Voiceless, said those meetings and a survey revealed community concerns about foster children becoming homeless adults, housing discrimination against immigrants, seniors raising grandchildren, and more.
Justice Knox also held smaller “house meetings” across the city that led its members to choose affordable housing as a focus issue, said Chris Battle, a pastor on the housing committee for Justice Knox.
“Those are the kind of stories that we’re hearing over and over again, just the struggle they’re making spending 50 percent of their income just for housing,” he said. “And the problem is we’re hearing the stories all the time: From out west to east, from educated people to uneducated people. It’s that pervasive in our city.”
Shipe plans to hold meetings with ministers to identify churches with property that could be used for affordable housing. But she also said City Council should make affordable housing a top priority.
“I think it should be a recurring part of the budget,” Shipe said. “And it should be enough to make a major difference. At one time we had $19 million in a rainy day fund. Well in my opinion, as far as affordable housing, it’s storming.”
While she acknowledged $19 million might be unrealistic, Shipe said she would like to see $10 million set aside. And she thinks new developments should be required to make 10 percent of what they build affordable.
Jackie Mayo at HomeSource also voiced support for finding a permanent funding stream. She said this would help not only with quality of life but economic development.
“What I think a lot of people don’t understand is affordable housing is important for the workforce housing, for all those folks that keep things running across the city: small businesses, teachers, nurses, all those folks need affordable housing,” Mayo said. “It’s what keeps a community vibrant.”
