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Affordable housing, 12.13

Katharen and Scott Wiese know they're fortunate to pay about $600 a month for their apartment in the Near South. But like many renters, they know affordable, quality housing isn't easy to find.

Katharen Wiese knows she is one of the lucky renters. Her apartment near 13th and D streets is large, well-maintained, even has a laundry area. And it’s affordable, about $600 a month.

And her landlord, the F Street Neighborhood Church, is great.

She and her husband, Scott, spent hours checking out rental ads and had looked at a couple of apartments, searching for something that would fit their budget and be safe, when her pastor offered this space.

“It was certainly a no-brainer,” she said of the decision to take the apartment.

Affordable, quality rentals are a scarcity in Lincoln.

Lincoln needs another 5,000 moderately priced, affordable rental units, based on federal Department of Housing and Urban Development studies.

It’s a housing crisis, said Shawn Ryba, executive director of the South of Downtown Community Development Organization.

The city’s Urban Development Department, which has long been involved in helping moderate-income families buy or stay in a home, is exploring how the city can help in the rental market, with what is often called affordable housing.

It is becoming harder to find a decent apartment at a reasonable price, particularly one near the university or near a bus route, said Cliff Bridges, who has rented in or near Lincoln’s Near South neighborhood for about 25 years.

When Bridges came to Lincoln as a graduate student, he said you could find a one-bedroom or a loft apartment for about $300 a month, which was affordable for a student on a stipend.

He lived in one apartment for 12 years until new owners raised the rent, were difficult to deal with and eventually drove tenants away, he said.

Several years ago, he spent six months looking for an apartment that would work for him, his daughter and grandson.

He finally found one, just $700 plus utilities. It was small, with three bedrooms, and close to a school, McPhee Elementary.

“It is a really good price, but it was a long time finding. If you have a place like this you want to hang on to it, because finding housing is becoming increasingly more difficult.”

Land trust would be state's first

Lincoln is part of a national trend, where communities find they don’t have enough moderately priced apartment and house rentals to meet the demand from moderate- and low-income families and individuals, said Wynn Hjermstad, with the city's Urban Development Department.

City efforts related to affordable rental housing this year include researching what other cities are doing, possibly putting together a group of stakeholders to look at potential strategies for creating additional affordable rentals, setting aside a little money in the city budget earmarked for affordable housing issues and helping to create a community land trust.

The city and several other partners hope to get a $3 million private grant from J.P. Morgan Chase to help fund a community land trust, the first in the state.

The way it works is an organization, often a nonprofit, buys the land and holds it in perpetuity, likely 99 years. Then the housing on the land doesn’t include the land price and is more affordable, Hjermstad said.

Community land trusts have proven to be very effective in other states, she said.

“Basically it is a subsidy. You can’t do affordable housing without a subsidy. If you could, the market would be doing it,” Hjermstad said.

The South of Downtown Community Development Organization would likely take ownership of the land and through a covenant define how the land could be used to create affordable housing, said Ryba, who heads up the group.

Another group, or a private developer, would own the building on top of the land, and the covenant would assure that property is used for affordable housing in perpetuity, said Ryba.

“I keep hearing builders say ‘We can’t get the numbers to work,’” said Ryba, about financial problems in building moderately priced rentals or homes.

Builders can’t do affordable housing because it's hard to make money with expensive land prices and construction costs. “That is why the land trust is so crucial.”

The partners seeking the grant include the Lincoln Community Foundation, the city, the Nebraska Investment Finance Authority, South of Downtown Community Development Organization, Community Action Partnership and ResCare, the company providing the local, one-stop employment program.

The city's two-year budget also includes some funding for affordable housing. The city has earmarked about $418,000 from the state turnback tax, money not needed to pay off bonds related to West Haymarket development, to use over the next two years for affordable housing.

The city has also set aside another $260,000 from leftover tax-increment financing fees that could be used for affordable housing, according to Brandon Kauffman, city finance director.

The city’s impact fees can also be used to help defray the cost of low-income rental units.

The city’s recently finished five-year strategic housing plan indicates the mayor's office may look for ways to require developers who use TIF to provide some moderately priced rentals as part of a development.

The document prepared for HUD also mentions the need to consider additional mobile home parks, cooperative housing opportunities, small homes and accessory dwelling units, which are small homes on the same property as a traditional house.

In Lincoln, the average cost of a two-bedroom apartment is about $900 and the fair market rent, a federal designation that is based on the lower-end rental prices and utilities for a standard, suitable housing unit, is $830, according to Chris Lamberty, Lincoln’s Housing Authority director.

That means the apartment rental price should be about $700, with the rest going to utilities, he said. 

A family would need an income of about $33,200 a year, or $15.96 an hour, to afford an $830 apartment and utilities, based on the general guideline that people should not be spending more than 30 percent of their income on housing.

The Lincoln Housing Authority can see the problem with finding affordable apartments in its voucher program, which helps low-income individuals and families pay for a moderately priced, but decent, rental. At least 20 percent of the people who are offered a voucher can’t find a place and can’t use the voucher, Lamberty said.

And there aren’t enough federally funded vouchers or units owned by the housing authority to meet the demand from very low-income families.

At any time, the housing authority has about 3,000 people using vouchers that help pay for the rent of a moderately priced apartment and another 4,400 families on the waiting list, Lamberty said.

Demand, income inequality among causes

Several factors are driving the affordable housing problem, including increased demand and growing income inequality.

The problem is related to economics, said Hjermstad, referring to the growing gap between very good pay and moderate to low pay.

There is nothing a city can do about it, she said.

Growing demand is also an issue.

More people are living in apartments, either by choice or because they cannot afford to own a home.

More millennials are saying they don’t want to own a house. And for people who earn 50 percent of the median income or less, home ownership generally isn’t possible, said Hjermstad.

At the same time, available housing that is both affordable and decent isn’t keeping up with the need.

What is really important to remember is that people need good, quality apartments, not just an affordable rent. “We see a lot of housing not in good shape. People are afraid to complain. And if improvements are made, then the rent goes up and it is no longer affordable,” said Hjermstad.

Molly Mayhew has lived in an apartment where the landlord did not take care of problems in a timely manner. She had three used refrigerators; two used dishwashers after the first almost caught fire; a backed-up kitchen sink that flooded the apartment three times; lots of bugs and first-floor windows that would stick in an open position.

She finally moved out when the tiles in the shower began falling off the wall.

Before that apartment, Mayhew lived in an apartment near Lincoln High School, with a good landlord company. But it was sold to a group that renovated the one-bedroom units, raising the rent from $450 a month to $725, said Mayhew, who is active in a local group, Renters Together.

There have always been issues with housing affordability in Lincoln, but it hasn’t been as big a problem until recently, Hjermstad said.

The city has helped with home ownership, through low-interest loans and partnerships with other agencies, in order to help stabilize neighborhoods. But what stabilizes a neighborhood isn’t limited to home ownership anymore, she said. It can also mean having affordable and quality apartments and rental houses.

“And now is the time to get control of this, before we turn into a Denver or a San Francisco.”

That’s why Lincoln’s Urban Development Department is looking at the affordable housing issue.

The city can’t solve this alone. It is too big of a problem, she said.

“What we can do is get people together to see how it might be addressed in Lincoln.”

“It has to be a communitywide effort,” she said.

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Reach the writer at 402-473-7250 or nhicks@journalstar.com

On Twitter @LJSNancyHicks.

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Reporter

Nancy Hicks reports on Lincoln city government, but she’s been following the leaders of local and state government for more than 40 years.

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