KC's lack of affordable housing plans is evident in Troost's growth

For decades, Troost Avenue has been one of the ways to separate Kansas City: east-west, black-white, poverty opportunities.

This partition, a legacy of government policies favoring discrimination and neglect, is in the process of dissolution. A wave of economic development, pushing for years from the west, has gone through. Between the 24th and 52nd streets, more than 800 new apartments and a hotel are under construction or under planning.

The once vibrant shopping district of 31st Street is about to be renewed. The refurbishment of housing and the construction of the tabs that began at Beacon Hill are expanding to the south in the City Center, Squier Park and Manheim Park neighborhoods.

But with its transformation, Troost risks becoming a shortcut to another type of historical failure: the city's lack of policy to ensure affordable housing and protect long-time residents from displacement.

Despite the city's urgent need for low- and moderate-income housing, almost all of the corridor's new apartments will be at "market rates" – even after the developers (MAC Properties, Milhaus and UC-B, among others) have benefited from tax breaks and other incentives. to invest in a devastated community. This means that housing will be largely beyond the reach of people whose median income in the city is less than $ 51,235.

Unlike most large cities, Kansas City does not require that residential developers reserve a portion of their new housing at an "affordable" price or cost their family more than 30% of their gross income.

"Let's be honest, it's not a bad thing to build more expensive housing for those who can afford it," said Father Justin Mathews, Executive Director of Reconciliation Services, the non-profit organization community development created 30 years ago in the 31st and Troost. "The problem is that we do this without providing for the thousands of families struggling for their survival and success on the east side."

According to census data, 50% of households earn less than $ 25,000 a year within a one-kilometer radius of Mathews' office. Thirty percent are headed by one parent, twice as many as the whole country.

At 30th Street, workers are putting the finishing touches to their apartments and stores in what was an industrial bakery. But at Wonder Lofts, where two-bedroom apartments cost between $ 1,100 and over $ 1,300 per month, a single parent with two children is expected to earn about $ 25 an hour, more than double the minimum wage of the family. Missouri in 2023 with the recent passage of Proposition B – for rent on site.

"We build Troost. We're building all those nice condos and stuff, but who are we really building them for? Asked 71-year-old Linda Benson, who has lived in several eastern neighborhoods for half a century in the city. "You know that minorities can not pay $ 1,200 for rent. It's ridiculous. So, who are you building for?

There are rumors in the local real estate industry that at least part of Troost is the next hub, the warehouse and industrial district, which has evolved to become art galleries, restaurants and posh apartments.

"Things are happening faster than the junction," said Jason Carter-Solomon, vice president of Enterprise Bank and Trust, an active lender in the region. "There are a lot of people around Troost."

"A clear political choice"

The new construction is aimed primarily at attracting young professionals and their families. They lose interest in the suburbs, have been priced in a newly expensive downtown, but want to be close to work in a truly urban environment.

Housing advocates said the city council – not the developers – was responsible for failing to ensure that the new Troost housing would be available at different levels of income.

"Low-income and moderate-income residents deserve the assurance that they have a place in Troost, today and in the future," said Matt Nugent, a architect living in Squier Park. "And developers need to know from the start of a project what they will be asked for in terms of affordable housing. Unfortunately, we do not have a housing policy in the city that does one of these things.

The city introduced a housing policy project for the first time in September, providing for the establishment of a $ 75 million public and private trust fund and the creation or preservation of at least five 000 homes and affordable apartments by the end of 2023.

Even though it is approved by the city council, the plan is only a modest start. Officials estimate that 7,000 additional affordable homes are needed for families earning less than $ 15,000 a year. Households of $ 50,000 to $ 75,000 face a deficit of over 10,000 affordable spaces.

Councilman Quinton Lucas and Pro Tem Mayor Scott Wagner, both mayoral candidates for 2019, sponsor their own set of initiatives. In particular, they provide that promoters seeking economic incentives from the city reserve 15% of new housing for households with a median income of less than or equal to 80%, or about $ 41,000 per year.

Other ideas at stake include the property tax freeze for long-term homeowners in areas where home values ​​are rising rapidly, and the limitation of tax cuts available to those who are rehabilitating existing or existing homes. build new ones.

These questions, as well as the possible prescriptions, have been clear and urgent for many years. However, it is only recently that the last year of Mayor Sly James' second four-year term has seen affordability become a topical issue.

Why did it take so long?

Lucas, chair of the council's housing committee, said James and city director Troy Schulte had opposed the resistance he called indispensable allies in trying to solve the complex problem of affordable housing.

"I think when you looked at Kansas City over the last eight years, you talked about airports and infrastructure, and keeping the momentum going," said Lucas, who is on his first term on the board. "It was a clear political choice."

In an e-mail statement, James stated that he took the necessary time at Schulte's office "to gather the data and information needed to create a comprehensive housing policy", including by associating with the LISC (Local Kansas City Initiative Corporation) as part of a comprehensive market study. local housing market.

James also said that he had created a separate housing committee when he took office on the current board in 2015, dissociating him from the neighborhoods and trusting Lucas the presidency because of the importance of l & # 39; affordability.

"The adoption of a comprehensive policy is initiated appropriately by the housing committee chaired by Councilor Lucas," James said.

The dilemma of the developers

Proponents of Troost said any new city policy should take into account the fact that even with tax incentives, lower rents would require more capital to make projects financially viable. Banks lend based on the cash flow that a building should produce. Investors expect annual returns of 10% and more.

The promoters of Wonder Loft obtained a 10% abatement on the property tax from the city, followed by 7 other reduction credits of 43% over seven years, as well as historical and federal tax credits. But his co-developer said that reducing rents would make it difficult to get a construction loan large enough.

According to architect Caleb Buland, reserving 20% ​​of Wonder housing to tenants generating between 60% and 80% of the median income would erase about $ 1 million in rental income over 10 years.

"At this point, we should reduce the bank loan or find an investor, as well as find revenue to continue balancing the operating budget," Buland said.

Builders say that any form of "inclusion zoning", requiring reserved markets for low-income apartments, would only take them away from projects in areas such as the Troost Corridor.

Audrey Navarro, managing partner of Clemons Real Estate, which is redefining the 31st shopping district, said smaller footprints and partnerships with nonprofit organizations could do more to reduce the funding gap between rates. market and affordable price.

"The solution does not always make it possible to define more rules and regulations," she said.

The standardization of the Missouri Low Income Housing Tax Credit, which offsets the tax liabilities of low-income housing developers, is among the other requirements. The program was killed earlier this year under the administration of the time. Eric Greitens. Governor Mike Parson said he would not support the renewal of the program until it was reorganized to eliminate the inefficiencies revealed in state audits.

It is also hoped that the new federal outlets, a product of this year's federal tax reform bill, will have an impact. The program allows investors to place capital gains in special funds that, in turn, invest in projects in poor communities. Depending on how long the money stays in the fund, taxes on those earnings will be deferred or reduced.

Matthews said that he must believe that the capacity is there.

"If we can not find a way, as a city as brilliant, enterprising and philanthropic as we are, to pursue a development strategy without displacement, then we will never be the big city we claim to be."

Gentrification or not?

In the proposed 72-page housing proposal in Kansas City, the word "gentrification" is nowhere.

The term has a wide range of definitions, most of the time depending on how people with money change their predominantly poor communities during their move: higher housing costs, loss of culture or livelihood. local identity and displacement. He has played on a dramatic scale in major cities like San Francisco and New York, and to a lesser extent in Kansas City.

John Wood, director of housing and neighborhood services for the city, said that if Crossroads and the West Side were gentrifying, the large stock of abandoned housing and vacant Troost corridor land creates a different scenario.

"We are far from gentrification," Wood said in an interview in September. "We do not move people. In my mind, we have too much land, too much real estate, that remains vacant right now. No one was deported. "

Other housing and neighborhood advocates are adopting a version of the definition of pornography given by Justice Potter Stewart, recently awarded by the Supreme Court, when discussing gentrification. They know it when they see it.

"It's so close. That's what's happening now, "said Stephen Samuels, executive director of LISC, who works in partnership with the city and other organizations to redevelop the urban core east of Troost in a way that still benefits to long-time residents.

"It's not enough to say that we did not hunt anyone. It might not be a displacement at first, "said Samuels, but a slower process of 10 to 15 years of rent tax and property tax going so far as to be unsustainable for residents to fixed income.

It is not just a new construction that makes the area more expensive. In postal codes on both sides of Troost, residential rents have increased from 17% to 20% over the last three years – about twice the city's growth rate, according to research firm RENTCafé.

"Previously, you could find a one-bedroom apartment with utilities between $ 450 and $ 500," Matthews said. "You now have the chance to find a one-bedroom apartment without utilities for $ 800 or more."

Recently, in the afternoon, Clay Marcusen, a retired graduate nurse, was recovering his latest belongings – a bike, a laundry basket and a small factory – in his one bedroom apartment located in South Hyde Park. He lived on the second floor of a modest but sturdy quartet for nine years at $ 575 a month.

In September, the building management company, Douglas J. Hannah, informed residents that their leases would not be renewed. It was not an expulsion in the strict sense of the term: the company invited tenants to consult their other ads, all more expensive.

Hannah did not share her plans for the building and a spokeswoman for the company did not respond to a call for comments. It is likely to be redeveloped to attract higher rents.

Marcusen, 68, who is moving in with his girlfriend south of the Plaza, said that it was a shock, even though he was watching other buildings undergoing the same metamorphosis during his jogging along Troost.

"You wonder where people are going," he says.

Veteran promoter John Hoffman of UC-B Properties, who has been building and renovating homes in neighborhoods east of Troost for several years, does not worry much about financial capacity. The failure of public schools and stagnant wages are the problem, he said, no new investments.

"Our philosophy is that we can not do everything for everyone," said Hoffman, who sees his mission as rebuilding neighborhoods by "mixing" small amounts of new and rehabilitated housing. He recently built and sold four houses in Manheim for $ 275,000 – a price unprecedented just a few years ago – on vacant land that he has acquired.

"For me, it's not gentrification at all," he said.

Chris Goode, owner of Ruby Jean's Juicery, who offers hand-made juices and "healthy bites" at the corner of the Wonder Lofts, embodies the enigma of gentrification.

A former college football star who has become an entrepreneur in downtown and Springfield, Goode is proud of his company and the lifestyle it promotes in an urban core where fast food is the rule.

He is also aware of the tensions created by change. Her juices and smoothies go for $ 7.50; add a sandwich and touch tab close to $ 20.

It offers a "Troost meal" at a lower cost, with a $ 5 vegan chili and other offers available to those who live or work in the area. Goode hopes his product will be more accessible.

"I understand the sensitivity about prices," said Goode, who grew up at 39th and Wabash. "We benefit from gentrification, but we need to be sensitive to it. This is a real concern. "