Fund approved for flood recovery in E. Kentucky could be source of housing money

When legislators met in special session last September and approved a $213 million aid package to deal with devastating flooding in Eastern Kentucky, none of it was specifically designated for housing, but top lawmakers and Gov. Andy Beshear said it was just a start.

Now lawmakers may redirect money from that pot for housing.

Senate President Robert Stivers said last week that there is still $175 million in the fund, called the East Kentucky SAFE Fund.

The money was directed to Kentucky Emergency Management to help counties, cities, school districts and other entities; the Transportation Cabinet to fix roads and bridges; and the Department of Education for financial help for schools.

However, the agencies haven’t yet been able to spend much of the money for various reasons, such as the time involved in doing engineering work.

In response to a question about appropriating money this session for housing, Stivers suggested using money from the East Kentucky SAFE Fund instead of doing a new appropriation.

“What I would recommend because of sequencing and timing, if there is that need that goes forward, we should just expand the uses instead of putting additional monies in,” said Stivers, a Republican from Manchester.

“Understand I’m not being critical of anybody,” Stivers said. “It is just the process that when you have to design, engineer, get land acquisition, infrastructure, it takes a period of time and you saw that with the West Kentucky funds. They drew on it in a very limited nature because it takes a while to clear the property, do the necessary design, engineering. Now they’re starting to draw on it more heavily because actual construction, reconstruction is going forward.”

The legislature approved a separate funding package to deal with destruction from tornadoes that killed more than 80 people in Western Kentucky in December 2021.

State officials count 44 deaths resulting from the flooding in the eastern end of the state last summer.

The current session, which is scheduled to wrap up at the end of March, is not a budget session. The legislature approves a two-year budget during even-year legislative sessions, so the state is in the first year of the current budget.

Some lawmakers have been reluctant to reopen the budget this year to accommodate requests for housing in the flood area.

“As of right now, I haven’t seen anything that causes me reason to believe that we will open it,” House Speaker David Osborne, R-Prospect, said recently when asked about reopening the budget this session. “You can’t ever anticipate every single circumstance, but I just don’t see that happening at this point.”

Shifting already approved money within the package would avoid that issue.

Rep. John Blanton, R-Salyersville, whose district includes areas that were flooded, had raised the idea of lawmakers approving $150 million this session, part of it for housing in places flooded last summer.

Blanton said in a recent interview he still favors that level of funding, but said it could come in installments.

“We’re not gonna give up that fight,” Blanton said. “Our obligation is to care for and help our citizens.”

The state will ultimately get federal funding to help with the disaster, but it could take some time.

The U.S. Department of Housing and Urban Development approved a plan this month for disaster funding covering the December 2021 tornadoes and flooding in Eastern Kentucky in February 2021, two years ago.

It could be 2025 before disaster money from HUD is available to start building and repairing housing in the flooded counties, said Adrienne Bush, executive director of the Homeless & Housing Coalition of Kentucky.

State funding for housing is needed now in order to keep the recovery going in Eastern Kentucky, so that organizations working on the issue can firm up plans and buy land if needed, advocates said.

“Part of our frustration with the delay in the funding is we can’t even begin to talk about what’s coming down the pike, what might be possible,” said Scott McReynolds, executive director of the Housing Development Alliance in Hazard, which builds affordable houses for lower-income people.

People displaced by the flooding are making housing arrangements such as living in storage sheds or putting mobile homes back on lots in the floodplain because they don’t see other options right now, McReynolds said.

“It is exactly because we don’t have state money that people are doing that,” he said.

Advocates said it will slow down the recovery effort if the legislature doesn’t direct some money for housing.

“More people will be doubled up. More people will be living in storage sheds,” Bush said. “That means more people leaving the region. It means more kids in unstable housing situations.”

Herald-Leader staff writers Austin Horn and Tessa Duvall contributed to this article.