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Kansas City mayor's new affordable housing plan sparks widespread opposition

Kansas City's Affordable Housing Trust Fund includes 20 percent of its budget for restoration of rental preservation.
Carlos Moreno
KCUR 89.3
Mayor Quinton Lucas hopes the ordinances will spur more development of affordable housing in Kansas City.

The Kansas City Council is set to debate a suite of ordinances that would change how the city awards tax breaks. While the mayor says it will streamline a complicated process, critics argue the plan prioritizes development at the expense of poor and working class residents.

Kansas City Mayor Quinton Lucas’ proposal to increase the production of affordable housing is being met with harsh criticism from housing advocates, public school representatives and social service providers.

“Kansas City's been taking from the poor and giving to the rich for a long time, and this is going to step it up a couple of notches,” Bruce Eddy, executive director of the Community Mental Health Fund, said at the KCPS Government Relations Ad Hoc Committee meeting on Tuesday.

Kansas City officials are considering major changes to the city's policies on housing and tax incentives for developers. Among the most hotly contested issues are a provision that would cut the City Council out of the decision making process for tax breaks and a measure that would ease requirements on developers to build affordable units.

The goal of these ordinances, Lucas has said, is to further incentivize development and meet the city’s housing goal of 10,000 affordable units by 2027.

“The real story is, right now, our economic development policy of Kansas City is, if not totally abandoned, it certainly is insufficient right now to answer the real needs of housing production and job production in the core of the city,” Lucas said.

But housing advocates, representatives from Kansas City Public Schools and other entities funded through property taxes say the proposals are a step backwards. They accuse the mayor of prioritizing development at the expense of poor and working class residents.

Defining “affordable” housing

A housing policy that went into effect last year mandates that developers seeking incentives must set aside 10% of units for households making 70% of the median family income — about $68,390 — and another 10% for households making 30%, which is $29,310.

Those numbers were generated using median family income from the Department of Housing and Urban Development, updated for 2022.

The new ordinance eases those standards, only requiring developers who request incentives to make 20% of their units affordable for those making 60% or below of the median family income, which is about $58,620. That breaks down to about $1,300 per month on rent.

Critics argue that’s not truly affordable. Kansas City Public Schools officials pointed out that the city’s affordability standard is more than the starting salary for a teacher in the district, which is $43,100.

“(It) doesn't feel truly affordable,” said Jennifer Wolfsie, chair of the KCPS Government Relations Committee.

Leaders from city-wide tenants union KC Tenants said the definition of “affordable” should come from tenants, not developers.

“We know what we need, and why should anyone other than tenants get to say what is affordable for tenants?” asked KC Tenants leader Sabrina Davis. “We should be using a definition of affordable that is affordable to us to live, not affordable for a developer to build.”

Tax incentive reform

The ordinances also aim to streamline the incentive-granting process.

There are a handful of different agencies in Kansas City that have the power to provide incentives for companies who say they can’t afford to build in certain parts of the city. Many of those agencies have different rules and standards for giving out tax breaks, which Lucas says encourages developers to go “incentive shopping” for the best deal.

Lucas says his plan aims to simplify that process by adopting a uniform set of standards across all the agencies who grant tax breaks that simultaneously support the city’s affordable housing goals.

“And then saying, all agencies, you have to live by these rules,” Lucas said. “Do not approve projects, pursuant to Kansas City economic development policy, unless you actually find yourself in a position where you're following these rules.”

Dan Moye, executive director of the Land Clearance Redevelopment Authority, one of the agencies that can grant incentives, says the reforms allow the city to set priorities and benchmarks for the development it wants to achieve.

“We cut the red tape and say, ‘These are the types of projects we want to work on. We're not going to add a bunch of extra steps. We're going to make it easier to do this,’” Moye said.

Another major change, Lucas said, is that the City Council will not have final approval for tax incentive packages, as they do now for some incentive programs. Lucas said giving City Council final approval would sometimes lead to backroom dealings between developers and city officials.

But KC Tenants leader Jenay Manley says that robs residents of the change to testify before their elected officials about proposed projects in their neighborhoods.

“This policy was intended to work for wealthy developers while silencing the people,” Manley said.

The ordinance would also waive the requirement for a third-party financial analysis that determines how much a developer actually needs from the city in order to complete a project.

Angie Lile, chair of the District Advisory Committee for KCPS, called that “ridiculous.”

“There's no way that you would call a plumber in your house without getting another opinion on something,” she said. “And so for the city to say that they could just hand this money out without a third-party financial analysis is ridiculous.”

Kansas City Public Schools loses out on millions of tax dollars when the city grants tax abatements to developers.

The district says it lost out on $37 million in tax revenue in 2021 as a result of tax abatements. A 2021 study from the national policy group Good Jobs First found that, out of the 226 school districts in Missouri, KCPS took the biggest hit from tax abatements.

The Kansas City Public Library and community mental health funds also rely on money collected from property taxes.

“What this plan appears more than likely to do is to increase inequity,” Eddy said. “KCPS and the Community Mental Health Fund serve a lot of the same families. “What we need is affordable housing. We need stability for our families.”

Yet another ordinance standardizes incentive packages for residential, commercial and industrial development, based on targeted areas identified by the city.

For example, residential development under “Tier 1” covers most of downtown Kansas City, Midtown and neighborhoods east of Troost. Developers requesting incentives could receive a 100% tax abatement for 10 years, then a 50% abatement for 15 years.

But critics say that pits the Country Club Plaza, a desirable spot for development, against blighted areas east of Troost, the city’s racial and economic dividing line.

“It essentially is a turbo boost to the tendency that the city has toward inequitable development,” Eddy said.

Next Steps

A proposal to put a bond question to voters in November to raise money for the city’s affordable housing trust fund, has not been controversial.

The city council will hear the four ordinances in committee meetings on Wednesday. The ordinance proposing a $175 million bond issue will be heard by the Finance, Governance and Public Safety Committee at 10:30 a.m. The other three ordinances will be heard in the Neighborhood, Planning and Development Committee at 1:30 p.m.

Members of the public will be able to give public testimony on the proposed policies. KC Tenants said the group will ask the council not to support the ordinance on the tax incentive policy.

“There is no version of this policy that is intended to limit the public ability to engage in the incentive approval process that should be supported or considered,” Manley said. “We will not negotiate our voices away.”

As KCUR’s Missouri politics and government reporter, it’s my job to show how government touches every aspect of our lives. I break down political jargon so people can easily understand policies and how it affects them. My work is people-forward and centered on civic engagement and democracy. I hold political leaders and public officials accountable for the decisions they make and their impact on our communities. Follow me on Twitter @celisa_mia or email me at celisa@kcur.org.
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