Kansas City voters may be staring down another tax hike come November — this time to try to address the city's lack of affordable housing.
Last year, Kansas City officials established a $75 million trust fund with the aim of creating or preserving 5,000 affordable housing units but didn't specify how it would be funded. On Wednesday, they learned that the city can only come up with about $30 million — enough for just more than 2,900 units. That's according to estimates from the Department of Neighborhood and Housing Services.
Closing that $45 million gap will require some tough decisions.
Two options involve tax hikes. A property tax increase, already proposed by Mayor Pro Tem Scott Wagner, would raise around $4 million a year. A one-eighth-cent sales tax increase would raise $10 million.
The city council’s housing committee hadn’t discussed a sales tax before now, because of a proposed sales tax for Pre-K, which failed in the April election.
Either tax would require voter approval in November. Councilman Dan Fowler worried that could be a tough sell.
“One of my concerns when I look at either one of them, and that’s especially given the fate of the (Pre-K) tax is, what is the appetite of the voters to do this?” Fowler said.
The housing committee plans to meet with stakeholders about the issue over the next month.
Councilwoman Alissia Canady wanted to explore other options for coming up with the money but acknowledged a tax hike would bring in funding faster.
“Obviously establishing a new funding source is … where you’re going to get the biggest amount of resources brought to the table,” Canady said.
Other options include requesting a grant from the Central City Sales Tax fund, which is designated to promote economic development within specific geographic boundaries. While some of that could go to housing projects, Jennifer Tidwell, who’s been working with the group that decides which projects get money, says commercial businesses have been a priority.
Neighborhoods and Housing Director John Wood also wants to explore inclusionary housing policies, such as a system where developers must set aside a certain number of affordable units in their properties or pay a fee in lieu of those units.
Previous discussions have indicated a study would take at least a year to complete, so that option may not immediately on the table.
Wood also wants to the private sector — like banks and philanthropists — to pledge money for home rehabilitation and community development.
Lisa Rodriguez is a reporter and the afternoon newscaster for KCUR 89.3. Follow her on Twitter @larodrig.