The 2018 State of Metropolitan Housing Report was released by the Metropolitan Housing Coalition (MHC) on Wednesday, with this year’s study focusing on parts of the city where residents are at risk of being involuntarily displaced from their current home — either by means of eviction, foreclosure or changing neighborhood trends brought about by increased property values and gentrification.
Noting that the city is undergoing a significant increase in public and private investment for large development projects — particularly the low-income areas of west Louisville — the MHC recommends that these be balanced with public policies that allow “prosperity without displacement” by protecting existing residents and providing neighborhood stability.
“We have a chance to reshape development practices in our city towards a process that is community-based and centers on the needs of people in the neighborhood where investment is occurring,” stated MHC Executive Director Cathy Hinko in a news release unveiling the annual report.
“Concerns about involuntary displacement must be front and center in all development projects, and policy tools — specifically protecting existing affordable housing and creating new affordable housing — should be a priority … We must create a suite of policy tools to proactively protect at risk residents,” she continued.
As for involuntary displacement that has already taken place, the report examined local figures from the national Eviction Lab database to find that while the eviction rate in Jefferson County reached its lowest point in at least 16 years in 2016, the rate has consistently been much higher than the statewide eviction rate over that period.
From 2000 to 2016, evictions in Jefferson County made up more than half the total evictions statewide, while two in three eviction filings in the state occurred in the county. These high figures existed despite the fact that Jefferson County only contains just over 20 percent of Kentucky’s renter-occupied housing units.
While Louisville’s eviction rate fell a full point to 4.49 percent in 2016, 10 census tracts in the city remain three times higher, largely concentrated in west Louisville and south of the Watterson Expressway near the center of the county. And though the eviction rate has fallen in the large majority of tracts since 2009, it increased by over two percentage points in five tracts that are all west of Ninth Street.
Foreclosure sales are also the most prevalent in west Louisville, as the three ZIP codes stretching from Shawnee down past Shively each made up over 9 percent of the countywide total in 2017, and together account for nearly 30 percent of that total.
In an attempt to gauge which parts of the city are the most at risk for having their residents displaced by economic and demographic trends, the study created a neighborhood typology system to categorize census tracts with vulnerable populations — renters, low income and people of color — that could find themselves pushed out by changing conditions in the housing market.
The report found 28 census tracts to be at increased risk for such displacement, within five unique categories based on their current demographics, how much they have changed since 2009, the extent that home and property values have increased and their adjacency to neighborhoods with increased values.
Eleven tracts were deemed “susceptible” to such displacement, as they contain a large vulnerable population and are near neighborhoods with accelerating home values, yet have not yet experienced substantial demographic change and have home values that remain low or moderate.
The report stated that since significant demographic change has not yet taken place in these tracts, “there is an opportunity to ensure the residents of these areas can afford to stay, for instance, by requiring affordable rental units in new developments or limiting the conversion of units into short-term rentals.”
These susceptible census tracts include much of the Portland and California neighborhoods in west Louisville, as well as Shelby Park and the tract that includes Butchertown and NuLu, both of which have seen a significant amount of economic investment in the past decade. Acknowledging that the latter tract is perceived by many to have already experienced significant change over the past five years, the report notes that poverty there remains high, most are still persons of color and over 90 percent of households are renters — though adding that they were not able to capture any possible change in the rental market.
The report also categorized eight census tracts as having “early type” risk of displacement, having accelerated home values or near other tracts with this trend, with demographics either remaining stable or beginning to show signs of change. Such tracts are located in Old Louisville and Park DuValle to the west, as well as Fern Valley, Okolona, Newburg, Iroquois Park and Pleasure Ridge Park to the south and the Clifton neighborhood just east of Butchertown.
The eight “dynamic tracts” in the report were found to have accelerating home values that still remain low or moderate, and still contain vulnerable populations despite exhibiting demographic change that is indicative of displacement. Such tracts included the neighborhoods of Smoketown, Algonquin, Hallmark, Shively, Newburg, Fern Creek and Bon Air.
The report classified one tract — the eastern portion of Old Louisville — as “continued loss,” where home values have dramatically increased by 9.2 percent, the percentage of residents with a bachelor’s degree increased by 23.4 percent and percentage of residents who are white increased by over 32 percent, the latter two figures ranking as the largest change among tracts in the county.
Noting that the poverty rate in this tract remains above 30 percent, the report states that “it is particularly important to retain affordable rental housing in this tract as a means of protecting the remaining population in this tract at risk for displacement.”
Such sentiments are found in the recommendations of the MHC annual report, which call for new and expanded policies that protect existing residents from the negative effects of the rise in property values that result from large economic development projects.
The report also continues the long-standing call from MHC to demand that all formal planning processes in the city address the need to expand affordable housing throughout the city and require housing developers that receive incentives to include affordable housing components in their projects.
The MHC report also measured a number of housing indicators that show the continuance of the city’s segregation by race and income, with nearly 40 percent of families not earning enough income to afford rent for a modest two-bedroom apartment in the city.
Homeownership rates for whites in Louisville — 70 percent — is nearly double that of African-American and Latino households, while a majority of households earning less that $50,000 a year devote more than 30 percent of their income toward paying for their housing.
The full MHC report can be read below: