The lawsuit filed by a Kansas City man over a $710 monthly water bill is a reminder that high water and sewer bills remain a serious concern for thousands of residents.
But it’s a reminder of something else: The lack of affordable housing in Kansas City is only partly caused by high rents and mortgages. Extraordinarily high utility costs — and high taxes — also play significant roles.
Any plan to make housing more affordable must address monthly utility costs and local taxes, or it will fail.
A 2016 study by the American Council for an Energy-Efficient Economy demonstrates the problem. The average Kansas City household spent 4.5 percent of its income on electricity and natural gas during the study period. That’s the seventh-highest burden among 48 major cities, ahead of New York City, Detroit, Denver and Boston, among others.
The impact is even greater for Kansas City’s poor. The energy burden for low-income households in Kansas City was 8.5 percent, the study found, the ninth highest in the U.S. It’s particularly a problem for renters and minority households.
Why is the local utility burden so high? Rates for electricity and natural gas in Missouri are a partial explanation. In August, Missouri’s residential natural gas costs were the seventh highest in the nation, according to the Energy Information Administration. Electricity rates were the 21st highest in the country.
But bills are also higher because of Kansas City’s older housing stock, with leaky windows and substandard insulation. Poor households often can’t buy energy-efficient furnaces and refrigerators that could cut electricity bills — and landlords won’t pay for upgrades.
Older homeowners may need more heat on bitter winter days, or more cooling in the summer. They may also be unaware of weatherization programs that can cut bills.
While the causes may vary, though, the result is clear: Kansas Citians, particularly low-income Kansas Citians, spend a bigger portion of their income on utilities than residents in most other cities. This creates financial stress, a cycle of poverty and serious health problems, researchers found, especially with children in under-heated homes.
It also makes it harder for families to afford modest rents or mortgages. “Higher utility bills require more of a family’s income and make them more likely to remain in poverty,” the study concluded. “By addressing energy affordability, policymakers can help to break the cycle of poverty and increase economic development, educational achievement, and public health.”
In isolation, the problem of high electricity and gas bills is a major concern. But Kansas City’s water rates have exploded, too, further plaguing low- and moderate-income families struggling to buy a home, or rent one. That makes a bad problem worse.
And, as we’ve argued before, Kansas City’s tax burden is high, particularly for lower-income workers.
Taken together — high utility costs, high water rates, high taxes — it can be no surprise that tens of thousands of residents cannot afford to rent or buy even a modest home here.
Kansas City must keep this in mind as it develops a comprehensive affordable housing policy.
The city collects more than $100 million in utility taxes each year, including a levy on residential electricity and natural gas. Those taxes pay for important city services, but they make housing less affordable.
“As a flat tax levied on primary household expenses, the (utility) tax has a disproportionate effect on fixed and low income households,” the mayor’s revenue commission said.
High water and sewer rates make housing less affordable. High sales taxes, and a flat earnings tax, add to the problem. The new mayor and council should address all of these problems.
We applaud City Hall for working on an affordable housing policy, and we’ve urged the mayoral candidates to make housing a top priority. But subsidizing affordable housing will only correct part of the problem.
Kansas City must make it easier for low- and moderate-income families to live inside the city limits. The first step is to understand that rent is just one check a family writes when it’s time to pay the bills.