Missouri's Affordable Housing Projects Caught In Middle of Tax-Credit Debate
Certain affordable housing projects in Missouri have until Oct. 31 to take advantage in $140 million in tax credits. But nonprofits and developers are concerned the state board charged with approving the tax credits won’t act in time.
The Kansas City-based Missouri Housing Development Commission has not had a full board meeting in months because it does not have enough members. Gov. Mike Parson has said he intends to make appointments in September, but the future of the program at the state level is uncertain.
The tax credits help developers offset the cost of building housing for the working poor and older residents, but critics call the program wasteful and a giveaway to developers and bankers. And this debate has left some housing projects in limbo, delaying plans that could help address gaps in affordable housing in Missouri.
SAVE, Inc., a Kansas City nonprofit that offers housing and other assistance to those who are homeless or low-income, has plans to build a 50-unit facility called Alhaven behind its headquarters in North Hyde Park. The lot is empty, because construction has not yet started — it’s waiting for the sign-off on federal money.
“We have the land, it's tax-exempt,” SAVE, Inc., CEO Blaine Proctor said. “It's not like we're paying taxes on it and everything like that.”
Things were thrown into confusion in November, when former Gov. Eric Greitens steered the Missouri Housing Development Commission to put an embargo on the tax credits on the state level. Three of the commissioners who voted to suspend the program had been appointed on an interim basis by Greitens.
“I was at the commission meeting where they eliminated the state tax credits and really sat there sort of shell-shocked because I couldn’t believe what I was watching,” Proctor said.
The commissioners later resigned after the Senate refused to confirm them amid tense relations between Greitens and lawmakers. (Greitens himself resigned June 1.) That left the board without a quorum, meaning it can’t take any action, including signing off on requests for federal money.
“(In a) normal year we would have put the application in back in September, awarded in December,” said Heather Bradley-Geary, director of supportive housing for Vecino Group, a developer based in Springfield that is partnering with SAVE, Inc. “So yeah, we might have already started construction by this point.”
Bradley-Geary is among those who believe the program is worth keeping.
“It’s one of the most successful public-private partnership as a government program,” she said. “We’re actually saving the government a lot of money with these programs to actually house people and get them off the streets.”
Parson said he supports a statewide moratorium on Missouri’s low-income housing tax credit program until reforms can be made. On top of a lack of a quorum, and the commission’s decision, the House Budget Committee froze the state credits until at least June 2019.
“I’m telling you, I gotta lot of faith in the legislators this year about doing some real reform in the tax credit on the low-income side and I believe we’ll have them up and running by the end of next year,” Parson said during a appearance last month in Kansas City.
The Missouri Housing Development Commission told KCUR that there are no scheduled meetings this year, though that could change once Parson makes appointments, which could be as early as this week's special session.
House Budget Committee Chairman Scott Fitzpatrick, R-Shell Knob, hears the governor’s call, and said the credits could be restored sooner than June if lawmakers get to work early in the 2019 regular session.
“I think if you surveyed the legislature, more members would prefer to see the program functioning in some capacity then would prefer to see it eliminated entirely,” Fitzpatrick said. “I'll be open-minded and work with the numbers to try to come up with a solution that'll allow the credits to be restarted.”
Bradley-Geary said if the state program were to go away, it would add to a shortage of affordable housing units. A University of Missouri-St. Louis study found an additional 130,000 and 470,000 units, depending on the income criteria used, are needed.
“Developers as a whole, the whole community, did a little bit of research on like what does it mean by getting rid of the state credit and probably about a fourth, about a 25 percent decrease in affordable housing units that we'll see because of that,” Bradley-Geary said.
As for the SAVE, Inc. project, Proctor said if the federal money is not approved this year, the organization will try again next year to apply for both federal and state credits.
Samuel King is the Missouri government and politics reporter at KCUR 89.3. Follow him on Twitter: @SamuelKingNews