City Warns of Looming Affordable Housing Crunch Downtown

By Kevin Collison

If you think it’s tough to find an affordable apartment in downtown Kansas City these days, just wait five years.

City officials project there will be 41 percent fewer affordable apartments downtown, dropping from the current 2,759 units to 1,140 units, as affordable housing tax credits expire on projects developed before 2008.

“These projects have a term during which units must stay affordable, 15 years in most cases,” said Stuart Bullington, city deputy director of Neighborhoods and Housing Services.

And once those subsidies roll off, the potential jump in rents could be a deal breaker for some residents.

“If someone is living in a unit for $650 per month for a one-bedroom and they get a letter your rent is now $1,150 and you’re not making more money, you’re going to have to leave,” Bullington said.

And it’s becoming tougher to develop new affordable housing projects to keep up with the demand.

Missouri Gov. Eric Greitens has pulled the plug on state funding for the low-income tax credit program, and new changes in federal tax law are making the tax credits less attractive to corporations.

“The state has historically allocated funds to assist with these projects,” Bullington said. “The governor has decided not to, which creates major (financial) hole in these projects.”

The state low-income housing tax credit program has been a powerful tool to help make some housing more affordable in downtown as the Kansas City apartment market has taken off the past 10 years or so.

Projects including the Professional Building Lofts, the Grand Boulevard Lofts and the Courthouse Lofts were all developed with its assistance.

People meeting the affordable housing income guidelines can rent units comparable in quality to market-rate apartments for far less. For example, one bedrooms at the Professional Building Lofts begin at $585 per and $720 per month for a two-bedroom.

The average rent currently for a market-rate apartment in downtown is $1,175.

To qualify for an apartment in a building that used low-income housing tax credits, a one-person household income can’t exceed $31,440 annually; two-person, $35,9450, and three-person, $40,440.

City Councilman Quinton Lucas, who has pushed for more affordable housing not only downtown, but throughout Kansas City, said the loss of state tax credits is forcing the city to step up.

“Last week, we passed a sales tax abatement on construction materials if a percentage of affordable housing units are part of the project,” he said.

Another potential carrot to encourage more affordable apartments is waiving a city cap on property tax abatements approved in late 2016. That change, made in response to criticism of the previous city tax incentive policy, reduced the maximum abatement available by 25 percent.

Lucas suggested that in return for providing affordable housing in their projects, developers could obtain the full 25-year property tax abatement allowed by law, 10 years at 100 percent and 15 years at 50 percent.

The councilman said providing more affordable housing downtown is an important public policy goal for the entire city.

“I think having housing and employment opportunities downtown is key because it’s the crossroads of the city with good access to transit,” he said.