A rare new subdivision is going up in Hazard. Will it help Eastern KY rebound?

A former strip mall will soon be transformed into a neighborhood for 15 families in Hazard, becoming the city’s first new subdivision in decades.

The Housing Development Alliance is building the subdivision, adding to its housing stock of more than 300 homes built for low-income residents in 25 years.

The nonprofit has encountered many challenges. Though there is a great need for low-income housing — 24% of Perry County residents live in poverty — the cost to build a house is often more than its appraised value once complete.

Scott McReynolds, executive director of Housing Development Alliance, said in Perry County and in the neighboring counties the nonprofit serves, a house may cost $150,000 to build but only appraises for $125,000, so they must come up with a funding source to plug that gap. Then, the potential homeowner may be working $10 an hour full-time and can only afford a home loan for $90,000-$95,000, so there is still an affordability gap.

With the subdivision in Allais, a neighborhood in Hazard and former coal camp, it took some creativity.

“Nobody could afford to do anything with it because it didn’t make economic sense,” McReynolds said.

The property was an abandoned strip mall that had its glory days in the 1970s. It was blighted, Hazard Mayor Donald “Happy” Mobelini said.

Several years ago, the city was able to buy the property through a Community Development Block Grant, which allowed them to demolish the building, build a road and sidewalks and install a water line.

Last week, the walls of the subdivision’s first home went up. Across the street, the foundation of another home was completed.

The subdivision will be called Gurney’s Bend, named after Gurney Norman, an Appalachian writer who grew up in Allais with his grandfather of the same name. Norman spoke of his hometown that has “such a rich history,” recalling days spent at the commissary and looking for tin during World War II.

“Allais has been born again, literally,” Norman said. “It’s poetic to me to think about it and the families who will live in modern homes along this street. It felt strange to me this place would have the name Gurney’s Bend. Of course, it’s an honor to me, but also to my grandfather G. W. Norman.”

Homes on Gurney’s Bend will be finished in several months. Of the 15 homes, 12 have already sold. One house will allow a grandfather raising his two kids to have his own bedroom. The homes are built for that family’s needs and can range from a three-bedroom, one-bathroom house to a four-bedroom, two-bathroom house.

McReynolds said the alliance’s goal is to build the homes as cheaply as possible and provide a subsidy to those who would not be able to afford a home.

He believes affordable housing can help build Eastern Kentucky’s future success.

The region’s housing stock is poor. McReynolds said even if nobody moved into the area, the group could stay busy building houses for 10 years to replace bad housing. Although the population has declined, the number of households has remained steady.

The difference between the building cost and appraisal cost has also begun to shrink.

Mobelini said Perry County leaders want people who have left the region for work to come back home and the community to grow. Gurney’s Bend gives them a reason, he said

“If we want to grow the town, grow the county, we have to have our people back,” he said.

Perry County Judge-Executive Scott Alexander said affordable housing helps with attracting employers to the county.

“With job growth comes all the other parts of the puzzle that needs to be filled,” Alexander said. “That’s where the Housing Alliance has stepped up to make affordable housing. When we recruit these companies, when we recruit jobs and people come back, that’s a big question now: where are they going to live?”

For example, the county recruited Dajcor Aluminum Extruding Mill at its Coal Fields Regional Industrial Park, creating 265 jobs.

McReynolds is optimistic about Perry County’s future. He said for years the future seemed hazy because of the area’s dependency on coal. Coal will remain a part of the community, but it’s now time to figure out what else the economy can capitalize on.

“There’s a real community effort to turn things around,” he said. “There’s a lot of excitement. It’s a great place to live.”

McReynolds is looking ahead. The Housing Development Alliance continues to build single-family homes across Perry County and the surrounding counties. They are currently building homes on abandoned mine land in Knott County.

Gurney’s Bend is the largest group of homes the alliance has built at one time. Building a subdivision is easier because construction is contained to one street, McReynolds said. But he is unsure about the next subdivision.

“It’s hard to come by a piece of property like this,” he said.