Kansas City Council holds off on affordable housing vote after developers object
The City Council won’t vote for at least a week on a proposal meant to spur affordable housing construction, following a flurry of letters from real estate and construction executives claiming it would kill development in Kansas City.
Council members voted 8-4 to hold the legislation that would require developers receiving city tax incentives to include affordable housing in their apartment buildings. The earliest they will vote is at next Thursday’s meeting.
The legislation, sponsored by Councilwoman Melissa Robinson and Mayor Quinton Lucas, passed committee unanimously last week. But this week the industry pushed back, saying the added cost of building affordable housing, as well as reforms to the city’s incentive programs the council is also considering, would make it impossible for them to build apartments in the city.
The legislation would have a “net effect of disinvestment of real estate development,” resulting in less housing and fewer jobs, William Crandall, managing principal of CBC Real Estate Group LLC, wrote in a letter to the council.
“It sends a signal to the nation that Kansas City is closed for business.”
CBC is part of a team that plans to build about 250 apartments in the River Market neighborhood at Third Street and Grand Boulevard. Several other developers and construction firms warned the same and urged council members to send the ordinance back to committee, hoping members would ease the restrictions.
Robinson, 3rd District, objected to — and later voted against — holding the affordable housing legislation, noting how common similar programs are and calling developers’ claims that they didn’t have time to have their voices heard a “stall tactic.”
“It’s time for us to stall no longer. It’s time for us to take a stand,” Robinson said. “It’s time for us to say that if you want to utilize city incentives, you have to be willing to help us with a major crisis that we have.”
The legislation would require that developers set aside 20% of their units for affordable housing — 10% for those earning 70% or less of the area median income and 10% for those earning 30% or less. Cities around the country impose the same requirements, and some require it for all construction, not just projects receiving tax incentives. That policy is known as “inclusionary zoning.”
If developers choose not to build the affordable units, they would have to pay 110% of the cost of constructing those units into a fund for affordable housing. Kansas City has long discussed the affordable housing crisis its residents face, but has not committed significant new resources to fix the shortage.
When Lucas ran for office, he envisioned a $75 million housing trust fund that has not been filled.
At the same time, the council is considering further reductions in the amount of property taxes that can be abated or redirected to entice developers to build in the city. Right now, in many cases, developers are limited to a 75% abatement or redirection for 10 years and 37.5% for 15 years after that.
The current version of the legislation would cut that to 70% for 10 years and 30% for five years after that.
Councilwoman Katheryn Shields, 4th District, said she was supportive of the proposal and “looked forward” to voting for it next week. But she said given the letters she got from developers, she needed time to get some answers.
Shields said she worried about how the proposed incentive reforms might coincide with the increased burden on developers having to build more affordable housing.
Robinson said Kansas City wasn’t doing enough to provide affordable housing, especially considering the housing crisis the city faces amid the COVID-19 pandemic.
“How are we ever going to get out of … our housing crisis if we don’t, as a city, utilize these very simple tools that we have to help to fund our housing trust, to help to make sure that we have affordable units?”
In addition to Robinson, council members Brandon Ellington, Ryana Parks-Shaw and Kevin O’Neill voted against holding the legislation. Councilwoman Heather Hall was absent. The rest of the members and Lucas voted to hold.
