The City of Covington will receive a $450,000 forgivable loan from the federal government to rehabilitate a cluster of affordable housing properties in Covington’s Eastside neighborhood.
Following approval from the city commission on Tuesday, the money will fund new HVAC systems, kitchen appliance upgrades, new water heaters and new bathtubs for 25 rental units on several streets in Eastside: 8 one-bedroom units, 13 two-bedroom units and 4 three bedroom units. The money will also be used to refinance debt related to the units.
All of the units are owned by Neighborhood Investment Partners, or NIP, which is officially an independent nonprofit but is affiliated with the city and the Housing Authority of Covington. Its directors are appointed by the mayor.
“The point of this is to continue our capacity building for NIP so that we can ramp up their ability to provide and preserve affordable housing,” said Community Development Manager Jeremy Wallace at the caucus meeting on Oct. 1.
The units are currently occupied and receive federal rental subsidies.
A study of housing in Northern Kentucky has revealed troubling trends for housing in the region, with the largest need being for “workforce housing” for households earning between $15 and $25 per hour, with monthly housing costs between $500 and $1,500. The region needs about 3,000 more housing units to provide for people within that income range, according to the study. The demand for one- to two-bedroom rentals and owned properties consistently exceeds their supply, while supply for three and four-bedroom properties consistently exceeds demand. The study suggests that the region needs to build 6,650 housing units to support economic development in the next five years, which equates to 1,330 units per year. Read more here.
Understanding NKY’s housing shortage
The HOME program is a federal program focused on housing and has been used to fund rental assistance programs, home repair programs and housing nonprofits like Neighborhood Investment Partners. It also funds the local HOME Consortium, which provides forgivable loans to qualifying home buyers. Covington, Independence, Erlanger, Florence, Ludlow, Newport, Bellevue and Dayton are member cities in the consortium.
Construction is set to commence later this month and extend through the end of September 2025.
The city has flexibility in its forgiveness structure as long as the buildings remain in federal compliance regarding affordable housing and conform to local code regulations.