New Albany pauses housing development to create comprehensive plan
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After an influx of new apartment builds, New Albany is pausing the construction of new rental housing while the city creates a comprehensive plan to guide its housing development future.
In February, the city council unanimously approved Mayor Jeff Gahan’s multi-family, non-owner-occupied housing construction moratorium. The decision is based on a University of Louisville study showing a slowly shrinking homeownership rate and predicted growth of residents desiring those opportunities.
“The existing stock really doesn’t match the current needs and wants of people today,” Gahan said.
The study found the homeownership rate of 54.5% is low compared to similar cities, and a significant number of single-family homes are rented rather than owner-occupied. By 2050, the study predicts the number of households will increase by 6.8%, and residents looking for ownership opportunities will grow at a pace twice that of renters.
The city also paused new permits for short-term rentals, like Airbnb and Vrbo, which the study highlighted as a potential challenge to homeownership. The city has a higher rate of such rentals at nearly six units per 1,000, but it only amounts to 0.5% of total stock and 1.4% of rental units.
Mayor Jeff Gahan talks about why a housing moratorium was needed and why now.
A major focus heading into this period is creating more opportunities for entry-level and downsizing homeownership. Gahan wants to build housing stock that allows specifically younger people to have an entry point into homeownership and building wealth, like owner-occupied condos and small single-family homes.
“Part of this is making sure that we’re doing everything they do to preserve people’s opportunity to build wealth in investing in homeownership in New Albany,” he said. “At the end of the day, that homeownership is a big part of building wealth for every American.”
Gahan said the comprehensive plan will hinge on study findings and balance building for the future and preserving the city’s history and character. It also will work as a roadmap for developers to follow to fit the mold of what New Albany is looking for.
The process will include several opportunities for resident and business input.
The moratorium will last as long as it takes for city officials to roll out the new plan, he said. The goal is to have a game plan and lift the pause by the first quarter of next year.
“It’s just a good opportunity for us to take pause, look at the data and come up with a comprehensive plan that keeps New Albany’s momentum,” Gahan said. “It gives us a chance to plan for an even brighter future.”
It’s no surprise to Gahan that city officials and the community signed onto this idea. The surge of new rental apartment developments is apparent, he said, and they commissioned a study to check the validity of their observations on the rental and housing market.
The study recommended a multi-faceted approach to building back ownership housing stock, including developer incentives, vacant land infill and rental conversion.
Gahan said that they plan to make homes more affordable by using residential tax increment financing districts to incentivize single-family home building. Another idea, he said, is to find ways to encourage the conversion of duplexes back into single-family homes on the market. More ideas will come out of the next year, he said.
Especially with the influx of state and federal funds, Gahan said it’s important they work as fast as they can to develop this plan, so they can use these “shot in the arm” funds to best serve the needs and future needs of residents.