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The St Louis Contrarian

Providing Independent and Intelligent Insight on St. Louis Public Policy Issues

Archive for the category “poverty”

Do We Have an Affordable Housing Crisis in St. Louis?

The answer to this question is how you structure the problem. The National Low Income Housing Coalition has done the most work of any organization on this issue on a national level. They pose the problem by taking the median rental rate in the community and factoring in the minimum wage income. Not surprisingly they concluded that virtually now where in the United States is housing affordable.

There are several problems with this approach. The minimum wage is not a good indication of a community's earning capacity. Many minimum wage workers are students, part time workers, and those new to the work force. Many live with parents or double or triple up. Also most minimum wage workers don't remain at that pay level for a long time, as they move up the ladder. The minimum wage was never intended to be a living wage, rather just a starter for low skilled workers. Many minimum wage workers also work 2 or more jobs.

A better gauge of housing affordability is the relationship between the median income and the median rent. This gives us kind of an average, not perfect, but much better. Let's look at some numbers as a point of comparison:

St. Louis Metro Area

Median Income- $52243 for a family of 4 in the City of St. Louis
Median Rent -2 bedroom- $1291
Therefore the monthly median income of $4354 can afford a monthly rent of $1306 at the 30% threshold. This represents 100.01% of the median rent.

One may conclude that on the whole rent is affordable in the St Louis area for the median household.

Boston
Median Income-$67846
Median rent-2 bedroom-$3166
Therefore the monthly income of $5654 can support a monthly rent of $1696 at the 30% threshold. This represents 54% of the median rent.

The Boston market on the whole is not affordable.

This approach seems to be useful in making comparisons among communities. It also does not relieve our community of our responsibility to provide affordable housing. After all, median income is a statistic. There are thousands of people in our metro area who cannot afford the median rent and do not have access to adequate rental housing.

Written by Paul Dribin

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St. Louis Glitz-Build it and They Will Come

Here is a major beef I have with how things get done in St. Louis in the 21 years my family and I have lived here.

Instead of investing in neighborhoods, education, crime prevention, etc. St Louisians invest in glitzy and trendy project that may work elsewhere but are unsuitable for our community. Some examples include, Union Station, City Center, adding a runway at Lambert, football and soccer stadiums, a downtown convention hotel, metro link, and a trolley. There is a place for all of these things in some communities, but glitz put on top of a crime ridden city with crumbling infrastructure will not work. The problem is compounded by a build it and they will come attitude, meaning that data does not support the endeavor but it will be so cool that people from somewhere will come and use it after it is completed. (I;E THE LOOP trolley)

Written by Paul Dribin

Tiny Houses

There has been much publicity lately about so called tiny houses which are generally about 250 square feet and can be purchased for about $50000. These houses are not for everyone but I think they are a great idea. They are energy efficient, and get people into the housing market who would not otherwise be eligible to participate. They may be perfect for single individuals or couples.

As of now community planning and zoning requirements to not allow for houses this small and they are being sited in mobile home parks or other unrestricted areas. I have never lived in a residence this small but people all over the world do. Our communities should give it a try. Written by Paul Dribin

Ferguson Again

Another thought about Ferguson.  There was a high powered Ferguson Commission that had prepared an extensive report with significant findings for improvement. It received a lot of publicity. What has happened to the outcomes from that report?  Written by Paul Dribin

Urban Development and Privilege

Much has been written recently about the concept of white privilege. I  find the term somewhat offensive because it makes people defensive. Nevertheless, the concept is true

There are a couple areas of middle class privilege that contribute negatively to the well being of communities.   The first is the mortgage interest deductions. This deduction primarily helps higher income people, and artificially drives up the price of housing. Working class people who do not itemize are hurt. This by the way is the biggest housing subsidy. A tax credit targeted to working class people would be more effective

A second set of privileges cover zoning and planning laws in our communities. These laws tend to zone out smaller and more affordable housing and Multifamily housing. I am not talking about housing homeless people but teachers social workers, nurses etc.    

The results of these policies are unnecessary segregation , a lack of mobility, and urban decline.  Written by paul Dribin

Possible Effects of Tax Reform in Missouri on Affordable Housing and Community Development

Governor Greitens has tasked a committee with looking at Missouri’s tax structure and making recommendations for change. Of particular interest to the committee and the state tax credit incentives. Here is a quick summary of recommendations as they effect housing related tax credits:

1. Low Income Housing Tax Credits- Missouri has a state affordable housing tax credits that supplements the federal credits. The credits once allocated can be used for 10 years and can be used for acquisition and new construction, or acquisition and rehabilitation. The committee recommended 1) A restructuring of the credit as a soft loan. These loans could be repaid, extended, or forgiven. 2)A $50 million annual cap which would cut funding by over 50%. 3)Creation of a tax credit clearing house to buy up existing credits. 4)The funding would be subject to annual appropriations.

Comment. Obviously utilizing a lower cap would limit the number of deals that can be supported. In addition,because the annual appropriations process is so crazy in Missouri, there would be no predictability about funding. Investors would either choose not to participate or significantly increase their fees.

2. Historic Preservation Tax Credits-These credits provide incentives to developers to maintain and rehabilitate historic buildings and neighborhoods. The recommendations are: 1)Combining the Historic Preservation Credits with the Brownfield credits. 2)The combined program would have a $50 million cap. Presently the Cap for the two programs is $150 million. 3)The funding would be subject to annual appropriations.

Comment-Once again the annual appropriations process provides for a high level of uncertainty. Lowering the Cap would also limit the number of deals.

Final Comment- These programs are critical to redevelopment and housing, particularly in St Louis. They have provided huge amounts of economic development to cities and built large numbers of affordable housing units. The trouble is they are very expensive. The development community needs to come up with alternative methods for doing community development that does not break the bank.

Chesterfield Mobile Home Park

I attended a meeting today of some good citizens who are attempting to find a solution to save the residents of a mobile home park in Chesterfield who could be facing eviction.

The park has been located in Chesterfield since before that community was incorporated. There are presently about 130 families living there, who may own or rent their mobile home and all rent their spaces. They pay $350 a month in rent.

A developer has come forth who has apparently reached agreement with the park owner to sell the property for the construction of apartments. The tenants who are on month to month leases are naturally worried.

We are working to oppose the zoning change necessary for this transaction and come up with an alternative development proposal which would leave the existing low income residents in place.

St. Louis North Side Development

The plans for St. Louis North Side Development have been ongoing for some time. Paul McGee is the developer behind the project that has created its’ share of controversy. Mr. McGee has purchased a number of properties on the north side in support of this project. Some of these properties have not been well maintained. Other concerns have surfaced about the lack of citizen participation in the process etc.

The Post-Dispatch today published a story that indicated more tax credits have been granted. It seems this project is taking forever to actually get off the ground. What complicates things more is that the federal Geospatial Project is an important part of the Northside Redevelopment project. This Geospatial Project is extremely important to St Louis, generating jobs and neighborhood development.

I am a fan of Paul McGee, because I have spent time with him and shared his vision. He is interested in transformation for communities and could certainly have spent his money on easier projects. It would be nice to see something actually happen on the northside. Written by Paul Dribin

Segregation in Affordable Housing

The New York Times recently ran an article which was very thoroughly documented and described how Low Income Housing Tax Credit projects almost always were located in a racially segregated and economically depressed area. The city described was Houston but the facts could apply to almost any United States location. Projects located in depressed census tracts provide much worse outcomes for the residents than those that are not.(Although the sample size of projects located in higher income areas is very small). Here is a link to the article: https://www.nytimes.com/2017/07/02/us/federal-housing-assistance-urban-racial-divides.html?smprod=nytcore-iphone&smid=nytcore-iphone-share

Certainly in some situations building LIHTC projects in economically deprived areas might make sense if part of a major redevelopment project. Most often, the projects are located in those areas because of NIMBYISM or developer decision making.

I am not confident these situations can ever be changed. Higher income neighborhoods will almost never support the construction of low income project in their midst.

A solution to the problem would be something I frequently recommend; an income approach to poverty which provides everyone with a guaranteed minimum income which would be used to support housing as well as other critical programs. New housing would be constructed in response to the demand created by this source of income. FHA would beef up its’ mortgage development program providing a strong vehicle for the construction of new housing. Developers using this program would need to set aside 10% of their units for affordable tenants. Direct construction subsidies would still be available for special needs housing.

We need to overcome the inertia in housing policy caused by the greed of developers of the status quo.

St. Louis as a Place to Live

I have a very good perspective on St Louis having grown up in Chicago and living here for 21 years.  In spite of itself, St Louis is a great place to live.   The culture and restaurants are first class. It is a great sports town and housing is quite affordable. You can get anywhere fairly quickly.  

Why have things not taken off here. There are several reasons 

1.  Racism.  Most of the other problems, crime, education, jobs, and dysfunctional government come from or racist traditions 

2.  Crime.  People around the country hear about crime in St. Louis and don’t want to move here.

3.  Education.  Many school systems are still a mess 

4. Cronyism. By cronyism I mean the strong tendency of people from St. Louis to pick there high school friends for key jobs and not consider outsiders. 

5. Dysfunctional government. This speaks for itself and is related to the other problems. 

We know what it takes to correct these issues. We have had lots of studies. Do we have the leadership and political will to make the changes?   Written. By Paul Dribin 

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