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To Attract More Developers, Kansas City Changes its Affordable Housing Ordinance — Again

According to KC’s new affordable housing ordinance, the median income for a four-person household is nearly six figures. Advocates say this is a problem.

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Above image credit: Mayor Quinton Lucas speaks at the Aug. 17 committee meeting, behind yellow KC Tenants protest signs. At least eight KC Tenants leaders gave testimony at this meeting, and dozens of members returned the next day for the City Council vote. (Chase Castor | The Beacon)

Just 19 months after passing a new housing ordinance aimed at requiring developers to offer “extremely affordable” housing, the Kansas City Council has decided it hasn’t worked.

On Aug. 18, the council voted 9-4 to change the ordinance, with council members Heather Hall, Brandon Ellington, Eric Bunch and Andrea Bough voting no.

Now there is no longer a requirement to make 10% of new developments “extremely affordable” — meaning for households making 30% of the Kansas City area median income.

With the change, the only affordable housing restriction is that 20% of housing units now must be within reach for households making 60% of the median income — meaning $1,180 monthly rent for a one-bedroom apartment for two people.

The decision led to outrage at the City Council meeting, where a local housing advocacy leader was arrested. 

Since the meeting, City Council members, advocacy groups and the mayor’s office are raising questions about how Kansas City calculates its affordability data and whether the city’s policy does enough to house low-income families.

Mayor’s Affordable Housing Ordinance Met with Strong Opposition

Members of the public voiced strong opposition to this ordinance at both the Aug. 17 Neighborhood Planning and Development Committee meeting and the Aug. 18 City Council meeting

One of the primary concerns was that the median income data used for the housing ordinance is calculated using 14 counties in the Kansas City metropolitan statistical area, rather than exclusively from within the city limits of Kansas City, Missouri, where the ordinance will take effect.

Fourth District Councilmember Eric Bunch told The Beacon that although he voted no on the Aug. 18 ordinance, he was frustrated that the council forced a vote when he believed that more “nuanced conversation” was necessary before making the decision.

Bunch believes that set-aside ordinances don’t always address an underlying issue of housing policy, that housing is treated as a “commodity,” unlike food or health care, which are provided by the government when individuals cannot afford it themselves.

“On one hand, I want to increase the supply of housing to satisfy a market that demands that right now,” Bunch said. “On the other hand, we need to have an actual social safety net for those who can’t afford market rates.”

Opponents Question the Median Income Data

KC Tenants, a housing advocacy group, has raised concerns about the use of income data from the entire 14-county metropolitan area, as opposed to data from within city boundaries. This is because certain counties in the area, such as Johnson County, Kansas, have significantly higher median income and could be skewing the overall numbers.

But the U.S. Department of Housing and Urban Development (HUD) also uses income data from the same 14 counties for its Section 8 housing program.  According to HUD, the median income in 2022 for a four-person household in Kansas City’s 14-county area is $96,800 per year. 

By this standard, total rent and utilities for “affordable” housing, using 60% of the median income for a four-person household, should be $1,452 per month. 

For a single-person household, the median income is $67,800, and affordable rent and utilities at 60% of the median income is $1,017 per month.

“Why can’t they use 30% of my income to calculate that, not $96,000 that I don’t make but the  two or $3,000 that I do make a month?” said Diane Charity, the board secretary of KC Tenants. 

Diane Charity of KC Tenants gives testimony to the City Council at the Aug. 17 committee meeting, calling on the council to reflect over the hardships low-income renters would undergo under the new housing ordinance.
Diane Charity of KC Tenants gives testimony to the City Council at the Aug. 17 committee meeting, calling on the council to reflect on the hardships low-income renters would undergo under the new housing ordinance. (Chase Castor | The Beacon)

KC Tenants has called on the City Council to amend the housing ordinance to redefine “affordable” by only using the median income of renters within Kansas City limits. 

“Why are you basing it off of a homeowner who lives in Lee’s Summit or Johnson County?” Charity said. “(City Council) can choose what they need. And why are you choosing that (the 14 counties’ median)? Because it incentivizes the developer to come in and build.”

In late July, KC Tenants launched its own survey of Kansas City renters to demonstrate that the median income figure the council is using is out of touch with what they are seeing among their communities.

Their survey received 600 responses from tenants in the city, who reported spending an average of $1,406 every month on rent and utilities. The average monthly earnings were $2,500, or $30,000 annually. This is well below the Kansas City median income for any household size.

The group worries that this new housing ordinance, in combination with the state’s minimum wage of $11.15 an hour, will further marginalize low-income residents and push them out of their homes. 

“Those are your service workers, those are McDonald’s workers, those are your people that you refuse to pay a living wage,” Charity said. “These days, at the rate of pay around here, you have to work something like 80 hours a week in order to pay $1,200 rent.”

Concerns About Lack of Development

Mayor Quinton Lucas said the reason for this new ordinance is a lack of housing developer applications that he believes is caused by the set-aside requirements. 

“That’s problem A. How do we generate housing?” Lucas said in an interview with The Beacon. “So then that leads you to B. Is it time to reevaluate a policy that previously existed?”

He believes that new development has been limited by the restrictive set-aside policy, but some testimonies during the City Council meeting said it was too soon to know for sure.

The initial set-aside ordinance passed on Jan. 29, 2021. Between that time and when it went into effect, the Kansas City Business Journal reported that at least 14 applications for multifamily projects were received by Kansas City’s Economic Development Corp. (EDC), compared to only one application the previous year. All of these projects were exempt from the ordinance. 

The EDC is a Kansas City agency responsible for economic development and issuing tax incentives to developers.

Since the initial set-aside ordinance took effect, the mayor has said there have been no applications for multifamily developments.

Geoff Jolley, executive director of Kansas City LISC, said that because of last year’s surge of applications, no developers needed to submit applications over the past year. LISC is a national organization whose Kansas City chapter invests in affordable housing and sustainable communities.

“We are prematurely reviewing an ordinance that hasn’t even had the time to take effect yet,” Jolley said during testimony at the Aug. 17 committee meeting.

Councilmember Bunch said that it’s also important to consider that during the 19 months since the initial ordinance passed, inflation has affected the cost of construction materials. The lack of developer applications over that time, he said, could be unrelated to the ordinance and instead due to other economic factors or the COVID-19 pandemic.

Vince Wang, a research manager at Grounded Solutions, a housing nonprofit, said that all housing data from the pandemic is unusual. As a result, it’s difficult to base policy decisions off of this data.

“Starting from 2020 and all the way through this year, I would say the whole economy and the housing market is abnormal because of the impact of the COVID,” Wang said. “So we won’t be able to just use one year out of the three years from 2020 to make a comparison and to say whether a policy is right or wrong.”

Community Land Trusts May Provide a Solution

According to Wang, the solution to building inclusionary housing should not simply rely on tenant income levels, but use a holistic approach through various policies. 

“One is that the city can encourage the land bank to hold the land and put that into productive use,” he said. 

Land banks are local agencies that acquire vacant or tax-delinquent properties and sell them at below-market rates with the goal of revitalization. Ideally, the renewed properties would add affordable housing stock and stabilize property values. 

Currently there are over 250 land banks in 17 states. In the Kansas City area, there are land banks in Kansas City, Missouri; Wyandotte County, Kansas; Overland Park, Blue Springs and Olathe. 

But in Kansas City, the system has not lived up to its potential.

In 2021, The Beacon published an investigation of the oversight failures of the Kansas City Land Bank, citing potential conflicts of interest between board members and buyers, and failures to hold buyers accountable to requirements. The investigation also found that more than 2,700 Land Bank properties — from vacant residential homes to vacant lots — are for sale. 

The Kansas City Land Bank also has a few properties on the city’s dangerous building list, meaning they are considered unsafe for anyone to live or work in. The buildings are considered blights in their neighborhoods. 

To deter corruption, Wang recommends partnerships between land banks and community land trusts. Established in the late ’60s during the civil rights era, community land trusts are nonprofits that hold and develop land to provide long-term affordable housing solutions and other community assets.

The community land trust owns the land, which is then leased to households who purchase the homes that sit on the land. This lowers the cost of buying the home because it removes the cost of the land. 

The ground lease that the land trust establishes also limits the price at which the home can be resold. Additionally, community land trusts retain the right to repurchase the home in the case of foreclosure. Through this process, the land trust maintains a stable of affordable housing despite fluctuations in the market. 

“So the land bank will collect vacant or abandoned properties or land, and then they will either sell it or donate those lands to community land trusts,” Wang said. “The affordability will be kept in the long term for generations and a generation of homebuyers.” 

The Kansas City Housing Trust Fund, which allocates money for affordable housing, recently got City Council approval to spend $8 million on 14 projects. The funds will support rentals, transitional and supportive housing and homeownership in underserved communities. 

Lack of Housing Vouchers to Help Low-income Residents Make Rent

Another support program is housing vouchers, in which tenants pay a set percentage of their income to rent and utilities and the program will cover the rest of the cost. 

The housing choice voucher program is funded by HUD. To be eligible, a family’s income may not exceed 50% of the median income for the county or metropolitan area where they live. In Kansas City, this would be $43,600 for a four-person household, using 2022 data. 

By law, a public housing agency must provide 75% of its vouchers to applicants whose incomes do not exceed 30% of the area median income. That would be $29,050 for a four-person household.

But the program is underfunded. Nationally, 77% of families with children who are eligible to receive housing vouchers do not receive them, according to the Children’s Defense Fund. That leads to a backlog of underserved families.

Now that the new affordable housing ordinance has passed the City Council, despite his “no” vote, council member Bunch said that it’s important to address these underlying problems. This could resemble the federal Section 8 housing voucher program, or it could be another idea entirely.

“I think this was maybe a missed opportunity to really have a more comprehensive approach to housing policy,” Bunch said. “The door’s not closed, but I think we’re far from really accomplishing that.”

Mili Mansaray is the housing and labor reporter at The Kansas City Beacon, where this story first appeared. Josh Merchant is The Kansas City Beacon’s local government reporter. The Beacon is a member of the KC Media Collective.

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