Kansas City Council voted unanimously Thursday to nail down exactly what it means by affordable housing, and how much of it developers must provide if they want tax breaks or other financial assistance for their projects.
When builders come to the city seeking economic incentives, their plans are evaluated with a scoring system that measures potential social benefits including job creation, access to public transit and environmentally sustainable construction.
The scorecard includes affordable housing. But city departments had multiple definitions of affordable, some as high as $2,000 a month.
The new ordinance, sponsored by Councilman Quinton Lucas, would amend the scorecard to define "affordable" as housing that would cost a family making the city's median household income of $47,489 no more than 30 percent of its earnings.
The guideline, long used by the federal government, comes to about $1,100 a month in Kansas City. Developers would be required to set aside as affordable at least 10 percent of the units they plan to build.
The measure also directs City Manager Troy Schulte to award higher scores to builders prepared to provide housing for families with even lower incomes.
"Today’s legislative action is only a first step in addressing housing issues in Kansas City, but clearly is not enough," Lucas said in a statement. "I recognize that rent even at that level is out of reach for many Kansas Citians."
The lack of definition was highlighted earlier this year when an executive for Power & Light District developer Cordish told a council committee that 40 percent of the company's apartments in its luxury One Light and Two Light downtown high rises were within reach of residents making 115 percent of median income, or about $54,000. He said one-bedroom apartments were available for $1,600.
Construction on Three Light, with about 300 apartments, is expected to begin before the end of the year at Truman Road and Grand Boulevard. The project received a favorable recommendation from a tax abatement advisory board Wednesday. The proposed abatement goes to the City Council for final approval.
Lucas said the city needs to establish a higher bar for granting incentives.
"We must recognize that our tax incentive policy directly affects quality housing supply," Lucas said in a statement.
"Rather than merely subsidizing luxury development, we should always be mindful of incentives’ effect on our local housing market and we should always take the opportunity to build more units."
Passage of the ordinance comes amid concern over escalating housing costs, especially in a resurgent downtown. About a quarter of the city center's 9,000 rental apartments are set aside for low-income tenants. But very few of the estimated 5,000 new apartments under construction or in the pipeline will be income-restricted.
The housing picture was also darkened last November when the Missouri Housing Development Commission voted not to allocate $140 million to the Missouri Low Income Housing Tax Credit Program, an important source of incentive for developers.
Housing squeeze is a national dilemma. A recent report by Harvard’s Joint Center for Housing Studies said more than 25 percent of renter households spent more than half their income on rent in 2013. With the number of renter households growing, that percentage could be higher.