Kansas City is working steadily toward its first-ever housing policy, but a significant challenge remains: how to fund a fix to its affordable housing shortage.
One solution, offered Wednesday by Mayor Pro Tem Scott Wagner, would boost Kansas Citians’ property tax rate to raise about $4 million per year — or an estimated $41 million over its 10-year life. If the Council passes the proposal, it will appear on the November ballot for voters to weigh in.
The new revenue would fund an array of provisions that Wagner and Councilman Quinton Lucas, both candidates for mayor, are hoping to shepherd toward passage as part of the city’s first-ever comprehensive housing strategy. That blueprint includes a $75 million housing trust fund to finance new construction and rehabilitation of existing affordable units.
Officials estimate that 7,000 additional affordable homes are needed for families making less than $15,000 a year. Households in the $50,000 to $75,000 range face a deficit of more than 10,000 affordable places. Affordable housing is usually defined as costing a family no more than 30 percent of its gross income.
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Wagner said that $75 million — $15 million per year — has to come from somewhere, and that his proposal would help “move the needle” on affordable housing, which can cost an average of $200,000 per unit.
“It tells you there’s just not enough scooters in the world to pay for that,” Wagner said, referencing the council’s passage last week of a measure redirecting revenues from Bird and Lime dockless scooters toward affordable housing projects.
The proposal, sponsored by Councilwoman Katheryn Shields, who represents the 4th District at-large, is expected to generate $300,000 from the $1-per-scooter-per-day fees that Bird and Lime pay. That number would rise if the city lifts its caps on the number of scooters the companies can deploy.
Wagner’s proposal would increase property taxes by five mills. The city’s Finance Department estimates that would mean a $12-per-year property tax increase on the owner of a $100,000 home and a $15,000 car.
Wagner introduced it in the Finance and Governance Committee, which he chairs, but referred the matter to the Housing Committee, chaired by Lucas, for further discussion.
Lucas said he was interested in the proposal and would hear it in his committee, but questioned why it would appear on the November ballot, when the current council will be out of office.
“If you want to increase taxes to pay for affordable housing, do it while you’re still on the City Council,” Lucas said.
Wagner said putting the proposal on the November ballot would give the council time to fully develop the housing policy before asking voters to pay for it.
Lucas said he would like to see whether the city can come up with $75 million through general revenue and federal funds before council members turn to raising taxes. He challenged Wagner’s assertion that there isn’t enough general revenue available.
“People are happy to say there are no general fund dollars until they spend general fund dollars,” Lucas said.
Councilwoman Alissia Canady, a mayoral candidate representing the 5th District, was hesitant about raising funds from a property tax increase. She suggested using the city’s capacity to levy a sales tax or assess fees on other development projects.
Using sales tax revenue could put affordable housing in competition with a proposal by Mayor Sly James, who wants devote existing sales tax capacity to expand Pre-K.
Phil Glynn, a mayoral candidate who is not on the City Council, runs a Crossroads business that supports housing and economic development in Native American communities. He said the city’s focus should be “getting our taxpayers value for the taxes they have already approved.” He said that includes plowing snow, picking up trash and fixing the city’s sidewalks.
In terms of affordable housing, he said the city should look at using public money to attract private dollars while taking advantage of existing tax incentive programs to spur construction “in our truly economically-distressed communities.”
“What I’ve seen is just incentives anywhere and everywhere without a real, thoughtful process of what are the goals we’re trying to achieve or the problems we’re trying to solve,” Glynn said.
He also mentioned using low-income housing tax credit, but that program has been widely criticized by the Missouri General Assembly and the Missouri House Budget Committee did not approve any funds for the program this year.
Wagner said the city could use the funds generated by the tax to attract more private grants and investment, but he said there’s no other source in the city’s budget to get started.
“You just can’t squeeze that turnip and expect a whole lot of things to come out of it. It’s kind of like taking your piggy bank and just shaking it hoping the amount that you want will fall out,” Wagner said. “Well, that’s just not going to happen in this case.”