By Brenda Oliver, 2019 President Missouri REALTORS®
Missouri REALTORS® have a well-known and enduring commitment to helping families realize the American Dream of home ownership. Purchasing a first home is the largest financial commitment ever made by a young family. It represents not only shelter, but security. It is the ultimate reward of responsible planning, disciplined saving and hard work.
On their road to home ownership, families have immediate needs for good quality housing with affordable rent. That is why REALTORS® have a strong interest in encouraging construction of affordable leased housing, including quality-built apartments for individuals and families with leases they can handle as they start out in life. And, that is why REALTORS® strongly support both state and federal tax credits to enable construction of quality lower-income housing.
In 2018, during the administration of then-Governor Eric Greitens, the Missouri Housing Development Commission (MHDC) awarded zero state low-income housing tax credits to match federal credits. This meant MHDC approved about 500 fewer apartments and the loss of about $80 million in development spending in a single year.
Failing to award state tax credits to help offset construction costs of lower-income apartments means developers must charge significantly higher rents – often several hundred dollars a month above what could have been achieved for the same good quality development built with both state and federal tax credits. Higher rents hit the bottom lines of already-stretched family budgets, eliminating dollars they could be saving toward the eventual purchase of a home of their own.
The failure to award state low-income housing tax credits is short-sighted in regard to any immediate help for the state budget. In fact, this failure actually costs the state in lost economic activity.
State tax credits do not count against the budget until after apartments are built and leased. Because of this, state and local governments missed out this year on the immediate economic impact of tens of millions of dollars in construction spending, plus worker paychecks, project purchases and payments of local and state taxes.
This loss of positive economic impact was duly noted in a recent letter to Governor Mike Parson, signed by more than three dozen mayors from across Missouri. The mayors commended and pledged cooperation with the governor’s declared priority of workforce development. These municipal leaders who are closest to their constituents reminded the governor that developing a skilled workforce is only part of the equation for economic success – workers require affordable housing, and there is a statewide shortage, particularly in rural areas.
They wrote: “As mayors of Missouri, we not only want our workforce to have safe, affordable housing, but also our seniors, homeless veterans and special needs citizens to enjoy the housing that is provided with the help of the state low income housing tax credit. Along with the benefits provided the residents of these developments, our communities also benefit in the form of increased employment, increased quality of life and increased economic activity…”
The mayors have it right. Action is needed in 2019 to regain benefits lost by short-sighted actions in 2018. Missouri REALTORS® commend Governor Parson for approaching the matter with an open mind and a focus on positive changes.
REALTORS® encourage Missouri lawmakers and state leaders to support restoring state tax credits for low-income housing. These proven programs not only provide solutions to Missourians’ need for quality affordable housing across the state, but also create good construction jobs, improve and stabilize neighborhoods and generate new tax revenues. It’s the right thing to do.
This opinion piece appears in the January 2019 Missouri Times Magazine.
