Will the Affordable Housing Plan Reduce the Number of Renters in Kansas City?
The answer is yes – that is, if everything goes according to the city’s plan. The historic new plan for affordable housing is a first for Kansas City. Many are saying that it’s about time – affordable housing has long been a cause for concern for many low-income city residents.
In fact, according to official estimates, families that make less than $15,000 per year need an additional 7,000 housing units, while families that make $50,000 to $75,000 per year need an additional 10,000 housing units. Furthermore, Missouri Business Alert reveals that one quarter of homeowners, and at least half of renters in Kansas City, fall within the “cost burdened” range – those who spend more than 30% of their current income to pay for either rent or their mortgage.
Kansas City officials also point to the fact that the median household income in all of Kansas City is $47,480. Compared to the national median household income of $55,532, Kansas residents are about $8,000 short of making the national average. Even more unfortunate are the 30,000 households within the city whose annual median income is less than $15,000. There’s clearly a substantial demand for affordable housing, particularly for those with extremely low income levels.
As the Northeast News has previously tackled, the KCMO City Council Housing Committee has been working with Neighborhoods and Housing Services to craft the appropriate solutions. Housing Committee chair Quinton Lucas is particularly concerned for those who fall under 80% of the Kansas median household income ($38,000). His recommendations include requiring at least 15% of all taxpayer-incentivized units to be reserved for individuals and families below that income level. Lucas also recommends emphasizing greater development in areas near transit hubs. It will all hinge on the creation of a $75 million housing development fund that would enable these changes – aimed at 5,000 new single family and multi-family housing units, completed by December 2023.
Kansas City is not the only metropolis to implement an affordable housing plan to bring down the prices and encourage more buyers. A similar, much larger plan is being launched in New York following the 2017 re-election of New York City Mayor Bill de Blasio. Dubbed as “Housing New York 2.0,” De Blasio explains that their previous plan to create 200,000 new affordable housing units by 2024 will be achieved by 2022. Curbed reports that De Blasio now wants 300,000 new affordable housing units by 2026.
While the mayor’s plan to create and preserve 300,000 affordable units by 2026 looks to reduce the number of renters, the reality is very different for the majority of New York residents unable to afford property due to the prices and high taxes. Yoreevo suggests that in New York, unsuspecting residents are often charged with a hidden flip tax that goes to the building and not the government. The flip tax started in the 1980s, and was originally meant to generate reserve funds for rental buildings being turned into co-ops. It was a way for the co-ops to raise money for necessary capital improvements and maintenance costs without having to assess shareholders. But today, since most buildings already have sound finances, the flip tax has simply become a way to generate revenue. This extra tax has made buying a property unattractive (if not impossible) to low to medium income families. Unless De Blasio tackles issues like the flip tax, residents of New York will still be paying addition high fees. Residents in Kansas City will also be wary of whether the affordable housing plan will make a proper impact on the property market and open it up to low income buyers, or whether it is just an attractive sounding policy to generate future votes.
Both Kansas City and New York City have laid out sound plans to make mass affordable housing a reality. If the plans are successful then they could potentially reduce the number of renters in both cities.