Retirement has not slowed down Jack Trawick. Since leaving the Center for Neighborhoods in 2013, after 33 years as its executive director, Trawick, 66, has joined the boards of two affordable housing developers – Housing Partnership Inc. and Wellspring, which specializes in housing for the mentally ill.
HPI is a nonprofit real estate development organization that creates affordable housing opportunities that encourage family and community stability. Trawick is working with the organization on a project called Beyond 9th, an initiative designed to increase the percentage of homeownership in west Louisville by maximizing the way HPI spends its resources.
The idea behind Beyond 9th , Trawick said, is to take advantage of the way the real estate market works to increase property values for current west Louisville homeowners. Real estate agents usually set a home’s sale price by looking at comparable houses in the vicinity of similar type, age and occupancy.
In the past, Trawick said, this method of setting home values has worked against developers in west Louisville because of the older available stock and the large number of rental and vacant properties in the area.
Trawick said he knew a group of investors who bought a house in west Louisville for $50,000 and then spent another $100,000 to renovate it. The owners ended up selling the home for $80,000, he said, because that was what the comps said was the average for the neighborhood.
“Ever since I started working in the field in the 1970s, people have aspired to revitalize west Louisville and it hasn’t gone well. The problem in west Louisville is you can’t build a good standard house for anything less than the highest comparable value in the area and the trend in the neighborhood is flat in terms of appreciation of value, and in some areas, it continues to decline,” he explained.
The idea Trawick presented to HPI was to use GIS mapping, census data and property value assessments to identify blocks with more than 40 percent homeownership and have the organization target those blocks to renovate vacant homes or build new homes.
Trawick jokingly refers to this as the Zoysia Grass Method of neighborhood revitalization because when he was a boy, his father had him put plugs of Zoysia, a hearty grass that spreads easily, on the lawn.
Like the Zoysia in his parent’s yard, Trawick is hoping that HPI’s resources will cover the bad spots on the targeted blocks. He said that should allow older west Louisville homeowners with comparable houses to reap the benefits.
“You reinforce a strong nose. The idea being if we put a new homeowner unit on a block where there are four or five homeowner units, that new homeowner unit establishes the new comparable value and ideally it increases the comparable value of the homes around it. That’s the theory, and this is all theory,” Trawick added.
Michael Gardner, HPI’s director of housing development, said Beyond 9th would be his organization’s priority for the foreseeable future.
HPI is purchasing homes from individuals on blocks where they can make an impact, Gardner said, but the organization’s main focus is in purchasing large portfolios from investors who built units using low-income housing tax credits, a Department of Treasury program that encourages private developers to build affordable housing.
According to the Metropolitan Housing Coalition’s 2018 State of Metropolitan Housing Report, most units built with low-income tax credits (78 percent) are in council districts 1, 2, 3, 4, 5 and 6, which includes all of west Louisville and parts of the Newburg area, which has a large African-American population.
Gardner said the concentration of low-income tax credit units in west Louisville is a boon for the Beyond 9th project. That is because the federal government requires homes built with low-income tax credits to be used as rental property for 15 years. HPI is targeting properties that have completed their compliance period and can, therefore, be flipped to homeownership.
HPI purchased 81 single-family houses located in California, Parkland, Portland, Russell, and Shawnee neighborhoods from the Oracle Design Group in October. Gardner said HPI would close on another portfolio of 33 properties in January. He said the organization plans to purchase up to 164 homes in west Louisville in the next few years.
Gardner did not disclose the price HPI paid for the Oracle properties, but he said the organization must stay cost-conscious for the Beyond 9th project to work.
The project is being funded through private donations and grants. Gardner said the Kentucky Housing Corporation gave HPI a $200,000 grant in May for down payment assistance to home buyers, and the organization has also received $385,000 from the Federal Home Loan Bank of Cincinnati.
Gardner is planning to ask the Affordable Housing Trust Fund for $1 million grant for the project in 2019.
In April, Gardner said, HPI partnered with RentTrack to report rent payments to the credit bureaus to help its renters build up their credit so they can qualify for home loans.
“We are buying whole portfolios from investors. Many of the homes have residents in them and our goal is to help them to go from renters to homeowners. Some of the residents have lived in these homes for years, paying rent and taking care of the property but not receiving the benefits of ownership,” he added.
Trawick said it may be decades before the community can judge the true impact of the Beyond 9th project on west Louisville. Wealth in Louisville is greatly skewed, he said, because redlining kept African-Americans from enjoying the benefits of the postwar expansion that increased homeownership for whites and allowed their descendants to benefit.
“Wealth is built through generations,” Trawick said. “HPI is focusing its work on not just building good affordable houses, but also providing new homeowners with the ability to build wealth, which is the American dream.”
This story was corrected to reflect that HPI received funds from the Kentucky Housing Corporation (KHC) and not Kentucky Fried Chicken (KFC) as stated in an earlier version.