Louisville-based apartment developer and owner LDG Development is working on a dozen apartment projects this year, more than double the number just a few years ago.
This year, the company has five projects at various stages of development and construction in Louisville alone — Bristol Bluffs, Jefferson Green, Prospect Cove, one at Newburg Road and another off Old Henry Road.
“There is a need for good, safe, clean housing,” said co-founder Chris Dischinger.
By the end of 2017, LDG Development expects to add roughly 1,600 units to the 7,000 units it already owns and operates. It currently builds affordable, market-rate and mixed-income apartments in seven states after expanding into Georgia and Tennessee in 2015.
“We have a bent toward affordable, but sometimes you can find where you’ve already done some affordable in a market, and you need to do market-rate,” Dischinger said. “And a lot of it is just financial, if you can make a true mixed-income property work, we love to do that.”
One University of Louisville researcher has argued that it’s easier for people who live in affordable housing to pull themselves up when living in areas with high availability of market-rate housing.
When Dischinger and Mark Lechner founded LDG Development in 1994, they started by renovating single-family homes before moving into multifamily development. The company officially made the switch in the early 2000s, Dischinger said.
Today, LDG Development has 28 employees, about eight of whom were hired in the past two years. Most of the corporate employees manage projects as they move through approvals and construction. LDG Development contracts builders to construct its apartments.
LDG Development owns and operates 28 existing apartment buildings. When they build a property, Dischinger said, they expect to own it forever, though he wouldn’t say that they’ll never sale.
“We believe in the mission of what we do,” he said, adding that they like to stay involved in the communities that they build.
When asked if there is one city that has been better to develop in than another, Dischinger said no.
“It seems like there’s a wrinkle everywhere you go,” he said. “Sometimes you get caught up in the politics of an area.”
Not every project is welcome
In Louisville, LDG Development has faced backlash from the city of Prospect residents and government officials over plans to build an affordable senior living community called Prospect Cove. The city’s mayor went as far as to try to raise $2.8 million to support another developer who wanted to build on the land LDG Development had earmarked for Prospect Cove.
Residents against the project raised concerns about traffic, the height and density of the complex, the fact that many of the apartment residents won’t work, the exterior design, parking and people “hanging out” at the shopping center across the street.
“Based on the nature of what we do, we see people kind of not understanding the program and thinking the worst and their instinct is to push back from the development,” Michael Gross, LDG Development’s development manager, said in June.
The unnamed apartment project on Garden Green Way at Newburg Road has also received some negative feedback from residents who are concerned about affordable housing’s impact on the surrounding neighborhood.
LDG Development receives most of its financing from institutions such as banks, but it also has been awarded government financing for its affordable housing developments.
Back in 2016, for example, Louisville CARES, a revolving loan fund that supports housing, agreed to give LDG Development a $4 million loan for its Bristol Bluffs development, a 216-unit, mostly affordable housing complex off Billtown Road. The $30 million Bristol Bluffs project will be a mix of two- and three-bedroom units.
“Having a dependable, affordable place for a family to live could mean that a child is more able to focus on their school work or that a parent may spend less of their monthly income on rent and more on groceries, medical bills or other essential items,” Gabe Fritz, director of the Office of Housing and Community Development, said in an emailed comment. “Housing options at all income levels will ensure a brighter and more equitable future for our community.”
Bristol Bluffs was appealing because it will offer energy-efficient housing and training in financial literacy, budgeting, rental rights and other matters for residents.
The company also received $500,000 for Bristol Bluffs from the Louisville Affordable Housing Trust Fund, which supports affordable housing.
A growing market for apartments
Louisville-Jefferson County Metro Government has seen a significant uptick in the number of applications received from developers seeking to build apartment complexes and condominiums in the city. By 2019, Louisville’s Central Business District alone is expected to have 3,709 residential units, a mix of condominiums and apartments — a 29 percent increase compared over current number of units, according to the Louisville Downtown Partnership.
“I think the market is strong. If you look at the lack of new single-family construction, that’s what’s driving a lot of the higher-end apartments,” Dischinger said. “There is just tremendous demand.”
In general, Louisville is gaining prominence, Dischinger said. When he visits other cities, people always want to talk about bourbon and the Kentucky Derby.
“Louisville’s got a good vibe now, even across the country, the places we travel. I think the bourbon thing has really helped,” Dischinger said. “Someone’s done a good job of promoting Louisville out there in the world.”
The areas with the most demand for LDG Development apartments, both affordable and market-rate, are near job centers, Dischinger said.
The company’s Falcon Crest apartments sit just off the Interstate 65 and Interstate 265, making it a short ride to the Airport Industrial Center and Shepherdsville’s Cedar Grove Business Park. Its Whispering Woods apartments are a six-minute drive to Jefferson Riverport International.
The positions available at companies in those and other business parks are high-quality jobs, but the employees still can’t afford the rents that some apartment complexes are charging.
“They are good wages and good salaries, but they might have trouble finding an apartment,” said Christi Lanier-Robinson, the public relations representative for LDG Development.
Lanier-Robinson added a new luxury apartment building opened near her parent’s home in Dove Point subdivision near Taylorsville Road that charges nearly $1,800 a month for one of its large apartments.
“If you make $23 an hour, how can you afford that?” she said.
Rent at LDG Development properties depend on size and income. At Overlook Terrace apartments off New Cut Road, a three-bedroom, two-bathroom apartment is $875 a month. Should Prospect Cove senior apartments get built, the company plans to charge $675 to $1,000 a month.