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City expects affordable housing growth at similar levels despite cost crunch

Josh James/WUKY

Wellington Park Apartments is the latest affordable housing development to be unveiled by Lexington Mayor Linda Gorton. The 45-unit building is coming online as city leaders and housing advocates grapple with surging costs.

The development tucked behind buildings off Wellington Way is designed solely for residents 55 and older and is the first affordable project backed by the city with 100% ADA compliant apartments.

Gorton said Wellington Park will help the city hit a milestone in 2026.

"This year we will surpass 4,000 units either built or preserved," she said. "In my proposed budget for next year, which is actually now the council's budget, our investment for affordable housing surpasses $5 million."

But the push for more affordable housing is hitting more headwinds these days.

"It's definitely a challenge," says Lexington's Affordable Housing Manager Rick McQuady. "We're dealing with higher interest rates, higher construction costs. It's interesting, the cost of property management has gone up as well."

During his time, McQuady says he's watched the final price tag for developments like Wellington increase by more than half.

"When we first started more than 12 years ago, we were averaging about $9,000 per unit that the Affordable Housing Fund was investing in these developments. We're now up to $15,000 a unit," he noted.

Despite those added pressures, McQuady says with the funding levels expected after the city budget process wraps up this year, he still anticipates that Lexington will keep its affordable housing growth numbers roughly the same — around 174 units a year.

Gorton has said the city is endeavoring to work faster and more efficiently through new approaches as it looks to chip away at the housing shortage.