By Chris Willcox, CBN Practicum Student
Housing is increasingly difficult to obtain for our nation’s poorest families. The federal government defines affordable housing as shelter that costs no more 30 percent of one’s income. In its 2017 Out of Reach report, the National Low Income Housing Coalition (NIHLC) tells us that in no county in the United States is a one-bedroom apartment affordable at fair market rent for someone who earns the minimum wage. The City of St. Louis is no exception. A person earning minimum wage would spend 67 percent of his or her income to rent a two-bedroom apartment at the fair market rent defined by the Department of Housing and Urban Development (HUD).
After the Missouri legislature stripped our cities of the ability to raise the minimum wage, St. Louis needs to find alternative policies to help put housing and a decent standard of living in reach for our most vulnerable. One of the most effective ways to do this is by investing in affordable housing. The passage of Proposition 1 gives St. Louis the opportunity to make that investment through the Affordable Housing Trust Fund.
St. Louis’ Affordable Housing Trust Fund (AHTF), funded by the Local Use Tax Fund, is the City’s primary means of providing loans and grants for affordable housing and related services. The fund finances home construction, home repair, homelessness prevention and shelter, and supportive services that stabilize communities, such as elder services that help people age in place. Flexible home repair dollars also help to build wealth in areas with low access to capital.
Homes funded by the AHTF reach our most vulnerable neighbors, as more than 40 percent of dollars allocated are set aside for projects that benefit people who earn 20 percent or less of the area median income. All homes created are also energy efficient, lead safe, and conform to universal design for maximum accessibility. The AHTF increases the stock of attractive homes that are available to residents with low and moderate incomes and people with disabilities.
In addition to putting quality housing within reach for people who need it, investing in affordable housing improves our community as a whole. A 2015 study from the Stanford Business School found that affordable housing construction in low-income communities improves home values, reduces crime and attracts a racially and income-diverse population. Research by the Federal Reserve Bank of Kansas City reported the same effect on home values, showing that home values within 500 feet of affordable housing projects built by local community development corporations (CDCs) rose by 11.8 percent. Higher property values means more tax revenues to support city services like our public schools. The projects the AHTF makes possible are key to revitalizing St. Louis neighborhoods.
Supporting affordable housing development is not only the right thing to do; it is a good investment for St. Louis. Every $1 spent by the AHTF on home construction and major rehabilitation is matched by $17 in public and private funds, making it an effective catalyst for community development. These projects also address vacancy by putting underutilized properties back into productive use. Expanding investment in the AHTF makes St. Louis more attractive for investment from outside the region, such as the Low Income Housing Tax Credit. Further, many AHTF loans to home developers and home buyers are repayable, replenishing funds that can be further reinvested to create more equitable and vibrant communities for St. Louis’ future.
Expanding St. Louis’ commitment to affordable housing and community services is especially vital in a world of diminishing federal funds. Since the AHTF was created in 2003, federal Community Development Block Grant (CDBG) and HOME program funds awarded to the City of St. Louis have decreased from $40.2 million in annual awards to $18.8 million in 2016 (adjusted for inflation to 2017 dollars), a total decline of 53 percent.
St. Louis should allocate half of the new Use Tax revenue from Proposition 1 in addition to the $5 million minimum required by local ordinance. This a local solution to increasing federal disinvestment.
As affordable housing moves further out of reach for many St. Louis residents, investing in the AHTF empowers our city to both provide for immediate housing needs and support the community over the long term. Projects and services funded by the AHTF have the potential to improve home values, reduce crime, and provide long-term solutions to homelessness. By choosing to invest in the AHTF, we make a commitment to care for our neighbors and provide for our economic future.
Chris Willcox is a second-year Master of Social Work student with a specialization in leadership and social change at UMSL. He received his Bachelor of Arts in Political Science with a minor in history from Truman State University. Prior to starting his master’s, he worked as a direct support provider for people with developmental disabilities in St. Charles. He draws on this experience to connect public policy and nonprofit management to frontline service provision to improve the lives and protect the rights of vulnerable populations.
Articles in “From the Field” represent the opinions of the author only and do not represent the views of the Community Builders Network of Metro St. Louis or the University of Missouri-St. Louis.