Lawmakers fell short in efforts to jump-start Missouri’s low-income housing tax credit program last year.
As they again offer legislation that would limit the amount of the credits that may be authorized, supporters of the Low Income Housing Tax Credit statewide match for federal funds wrote a letter asking lawmakers to support the plan.
Empower Missouri, which “advocates for the well-being of Missourians,” according to its mission statement, delivered a letter Thursday to Gov. Mike Parson’s office and to leadership within the state Senate and House of Representatives, encouraging them to reinstitute the program.
In December 2017, then-Gov. Eric Greitens and the Missouri Housing Development Commission voted to stop matching state funds for federal tax credit programs. Then-Lt. Gov. Parson, who was also on the commission, was one of two dissenting votes in the 10-member commission. Parson, now governor, warned the removal of the tax credits would harm rural communities and stall projects.
Another concern, according to Empower Missouri’s letter, the inventory of affordable housing is decreasing without continued funding for LIHTC housing.
When developers accept the LIHTC, Missouri requires them to retain the housing units at an affordable rental rate for a specific period of time, said Sarah Owsley Townsend, policy and advocacy manager for Empower Missouri.
Each year, units roll off their “affordability window,” she said.
“The developments have an affordability window — sometimes 15 years, sometimes 20 years, sometimes 30 years,” she said. “They then flip to the fair market rate.”
What is certain is developers are not replacing affordable housing at the same rate at which rental units are flipping, she said.
“(There is) a two-fold problem — housing costs continue to rise, and we need more units,” Townsend said.
Federal dollars still flow, but without state matches, fewer developers are willing to invest in affordable housing, she said.
This legislative session, lawmakers have offered identical bills (Senate Bill 549 and House Bill 2437) in their chambers to reinstate the credits.
SB 549, sponsored by state Sen. Dan Hegeman, R-Andrew County, would cap the state match at 72.5 percent of the amount of federal low-income housing tax credits allocated to the state or $123 million, adjusted for inflation, according to the bill summary. It would reduce the limit of credits authorized for projects financed through tax-exempt bonds from $6 million to $4 million. And it would establish an evaluation rubric and score applicants for the credits.
“Other states use a scorecard,” Townsend said. “We started that, but it could use some improvement. In other states, everything is broken down, and you really understand why a development is chosen.”
Developments may receive points for things such as showing a need within a community, she said.
The letter to lawmakers warns Missouri is likely to lose 10,000 units of affordable housing in the next few months.
“Our state has a dire shortage of affordable and available rental housing,” the letter states. “The National Low Income Housing Coalition reports that 113,015 extremely low income households (those earning 30 percent area median income or lower) in Missouri are unable to secure housing that is affordable to them.”
Missouri must invest in solutions to alleviate the affordable housing crisis, according to the letter.
Some solutions it offers are:
Target funding toward low-income and extremely low-income households.
Give preference to developers who partner with nonprofits.
Incentivize longer-term affordability windows.
Prioritize models that use Supportive Housing training, which encourages offering services for vulnerable citizens.
State Rep. Rocky Miller, R-Lake Ozark, said he is “good” with providing tax credits that would provide housing for low-income housing.
Miller noted he represents the Lake of the Ozarks area, which is dependent on low-income workers, particularly in service industries.