The ouster of Greitens may improve the chances of reinstating Missouri credits. Jeff Smith, Executive Director of MOWAHA is quoted in the article saying the credits are efficient and effective. They are neither. Written by Paul Dribin
The Missouri legislature has voted to not reinstate the credits. This means that affordable housing deals in Missouri will be more difficult to do. This is a classic case of killing the goose who lay the golden eggs. The greed of developers and their assorted hangers on caused this to happen. The people being harmed are poor people.
The governance of MHDC the funding agency must be changed to reform the system. Having high level elected officials on the board simply creates a climate of graft. What also is necessary should be a straight forward funding criteria which awards projects on the basis of merit, not who you know. In any case the existing system is rotten and needs to be changed. Written by Paul Dribin
As everyone knows, Governor Eric Greitens of Missouri is in deep trouble after being indicted for violating a Missouri law by taping his semi nude lover without her consent. If Greitens should leave office, it would be positive for affordable housing. He almost solely stopped the Missouri State Affordable Housing Tax Credit. There does not appear to be the same enthusiasm for this elimination on the part of the Lieutenant Governor or many other Republican leaders. We will have to see what happens. Written by Paul Dribin
The new tax law certainly is controversial and I am certainly not qualified to offer a detailed analysis. One area that I am knowledgeable about are Low Income Housing Tax Credits (LIHTC). This is the main program for developing affordable housing in the United States.
The new tax law would have a detrimental effect on LIHTC which relies on selling tax credits to corporate entities and using the proceeds of those sales as equity for the construction and rehabilitation of affordable housing. Since the new law significantly lowers corporate taxes, it will also lower what corporations are willing to pay for tax credits, thereby making affordable housing more difficult to complete. Missouri suffers a double whammy with the elimination of the State of Missouri Affordable Housing Tax Credit by Governor Greitens and the MHDC board. This with the addition of potential cuts in the Missouri Historic Tax Credits will have dire effects on the City of St. Louis. Written by Paul Dribin
The MHDC board met Friday and voted to eliminate the state credits. This will result in a significant loss of affordable housing in Missouri which is a tragedy. Reforms needed to be made in the program, but I don’t think Greitens is really interested in reform, simply grandstanding. Nevertheless, a big part of the reason the program was eliminated was the greed of the industry supported by the credits. MHDC never had an open application process with clear standards for judging and eliminating applications. The board made of high level political appointees was subject to legal and illegal graft. The program was run as a political fiefdom and returned far too little of the funds to actual low income recipients.
Still the program should not have been eliminated unless something better was around with which to replace it. As always low income people are the ones who suffer the most. Written by Paul Dribin
Much is being written and discussed about the Governor’s decision to terminate Missouri State Affordable Housing Tax Credits. The loss of these credits will make affordable housing difficult to do and adversely affect a certain category of poor person. I am not in favor of eliminating these credits simply because there is really nothing else to work with in the affordable housing arena.
Nevertheless, the greed of some members of the affordable housing industry made this decision by the Governor inevitable. There are many developers, syndicators, attorneys, and consultants who have gotten rich off the program. Too much of a dollar of tax credits does not go for actual housing expenses. Many in the industry do not really care about poor people.
In addition, the Low Income Housing Tax Credit Program is both inefficient and ineffective. Inefficient for the reasons cited above plus a hugely complicated program. Ineffective because the program does not house poor people who need it the most. Tenants still must pay a $400-$600 monthly rent. Homeless people need not apply.
If the traditional public housing program was allowed the same per unit expenditures and site location it would have been a more efficient and effective housing program. Unfortunately, anything that smacks of public involvement is frowned upon these days. Written by Paul Dribin
Well the hammer has dropped. The Missouri Housing Development Commission. (MHDC) board voted today to eliminate the State Affordable Housing Tax Credits. These credits have been used in conjunction with federal affordable credits, historic credits, and other forms of subsidy and equity to build and rehabilitate affordable housing in Missouri. Governor Grietens has been pushing to eliminate these credits since he has taken office.
This action will make affordable housing in Missouri more difficult to accomplish. There will be fewer deals and less affordable rents. The state credit appears expensive in a simplistic way, but in terms of jobs creation and long term housing affordability it is critical.
There has been significant criticism of the multitude of state tax credits in Missouri. The reason for this is the unreliability of the state legislative process an the subsequent uncertainty to housing investors. My mild criticism of the industry for a long time has been that we are too reliant on tax credits and need to develop alternative sources of funding. Written by Paul Dribin