Everyone questions tax incentives, but they could help low-income renters

Kansas City tax incentives are nearly ubiquitously distrusted. While I disagree with the misguided basis of the sentiment, it persists. We can and must use these powerful tools to create and maintain affordable housing, curb gentrification and control unjustifiably rising rents that are not keeping pace with stagnating and declining incomes.

Our city must grow to survive and compete internationally, and we can develop while treating our residents with the respect and dignity to which they are entitled. Using incentives paid for by the very people who could be priced out by them seems like a special form of cruelty and recklessness we can avoid.

Kansas City is on a path to great economic growth, but we can avoid the socially unjust growing pains of powerhouse cities like Seattle if we adopt a plan that refuses to displace our neighbors before it’s too late.

Reports of gentrification — economic displacement of long-term residents — are increasing. Median market rental rates are rising (up 1 percent from December 2016 to $900 for a two-bedroom unit) with increases in real property values. Evidence of economic gentrification itself so far is anecdotal, but should concern us greatly nonetheless. The use of tax abatements or incentives to create new luxury or market rate units is often blamed, and that evidence is also anecdotal but difficult to ignore.

An increase in high-end units does not necessarily mean the lowest rents are increasing with the highest. While we know the millions of dollars in revenue and new construction jobs produced by tax abatements, we disgracefully lack a comprehensive, long-term data set sufficient to properly study the full consequences, intended or otherwise.

We need a quarterly reporting system for all landlords to show rates charged for each dwelling, with demographic data for each tenant (race, sex, age and income). Market tools such as Zillow lack precision, and their data often do not come from the landlords themselves. This new data could determine whether and to what degree rents at all market levels are rising.

If market rates are “what a consumer is willing to pay,” then consumers should be given as clear a picture as possible of what causes many of them to pay, and landlords to charge, unjustifiably high rents. If even controlling for income, people of color are evicted at higher rates than whites in Kansas City, as housing researcher Tara Raghuveer found, then we need tools showing where people of color are charged more than white counterparts for rent — a likely factor in this shameful disparity.

Missouri’s Republican legislature preempted rent control. However, abatement agencies can contract with landlords to freeze their property taxes in some cases for up to 25 years, on the condition that the landlord freezes rents at agreed upon levels for that same period. Landlords could also use that abatement to improve the quality of otherwise substandard or deteriorating properties, providing temporary construction jobs in the process, without having to pass down those improvement costs to tenants.

As the affordability requirements of several once-affordable downtown rental units soon expire, and without any semblance of a plan coming from the city to create new public or affordable housing, property tax freezes exchanged for affordable rents will encourage continuity, growth and maintenance of housing affordability.

We already offer a similar, wildly successful program for the arts. In exchange for tax abatements, buildings with qualifying commercial arts-related businesses in the Crossroads Arts District must remain affordable for tenants for up to 15 years. There’s no reason we cannot do the same elsewhere.

Kansas City must grow and develop to thrive and compete, but we can do this in our unique way, with the genteel consideration that makes our city so attractive.

The tools for development with dignity exist. Why aren’t we using them?

This story was originally published February 5, 2018 at 8:30 PM with the headline "Everyone questions tax incentives, but they could help low-income renters."