A coalition of 27 organizations sent letters to St. Louis city leaders on March 6, asking that some of the new Proposition 1 sales tax revenue go towards the city’s Affordable Housing Trust Fund.
“It is both a sound fiscal investment and an effective means to improve the lives of people in greatest need,” stated the newly-formed Affordable Housing Trust Fund Coalition, which includes Forward Through Ferguson, Habitat for Humanity and several others.
The letters went out to the St. Louis Board of Aldermen, Comptroller Darlene Green and Mayor Lyda Krewson, urging their support in dedicating 50 percent of new “use tax” revenues generated by Prop 1 to the trust fund – about $2 million annually.
In April 2017, voters approved Prop 1 to raise sales tax by 0.5 percent to fund neighborhood revitalization, public safety cameras and planning for MetroLink expansion. When the sales tax goes up, the local use tax – a business tax – automatically increases as well. It’s estimated to generate almost $4 million annually.
The Affordable Housing Trust Fund would receive $7 million every year, if city leaders support the coalition’s request. These funds help to prevent homelessness, increase property values, and build wealth in areas without easy access to capital, the coalition argues.
“Vacancy and crime reduction are two of the mayor’s main priorities, and this directly relates to those priorities,” said Gary Newcomer, community development specialist for the Community Builders Network of Metro St. Louis. “We hope the mayor will be a champion for us.”
Newcomer, who is the point person for the coalition, said he has not heard any response directly from any of the elected officials. However, he knows coalition members have started setting up meetings with them.
The mayor’s spokesman told The St. Louis American in an email, “Next fiscal year’s budget is being crafted right now. It’s too early to say with any specificity what it will look like when it is completed. That said, Mayor Krewson is in favor of dedicating as much money as possible to the Affordable Housing Trust Fund.”
Tom Shepard, chief of staff for President of the Board of Aldermen Lewis Reed, said, “This will definitely be part of our conversations once the budget process starts. We take affordable housing very seriously, and we know that it can address some of the various underlying issues that plague our city.”
The comptroller supports “fully funding” the trust fund, Green’s spokesman stated in an email.
In January, the Affordable Housing Commission awarded $4.26 million in grants from the trust fund for “subsidy-housing assistance.” These programs range from homeless shelters and rent/utility subsidies to financial literacy and new construction of affordable homes. In total, the commission awarded $4.47 million for fiscal year 2018 for these programs.
For every dollar the trust fund awards to home construction and major rehab, it is matched by $17 in private and public funds, “demonstrating that these activities attract local and outside investment,” the coalition stated. Loans to developers and homeowners are typically repayable, meaning the fund is partially replenished over time.
The trust fund was created after city voters approved in 2002 a proposition to allocate the local use tax revenue to affordable housing, public health, public safety and neighborhood preservation. The Board of Aldermen established that at least $5 million would go towards for affordable housing, $5 million to public health and $3 million for building demolition. The remaining amount could be used as the aldermen see fit.
In fact, since 2013, the St. Louis Metropolitan Police Department has received about $10 million of the use tax revenue every year, while the Affordable Housing Trust Fund has received between $4 and $4.5 million every year since 2011.
“As the use tax has grown, money that should have gone into the AHTF has been diverted to other programs and services,” the coalition stated. “This loss is compounded by a recent decline in federal contributions.”
According to HUD data, close to 30 percent of the African-American households in the city are extremely housing-cost burdened, said Glenn Burleigh, community engagement specialist for the Metropolitan St. Louis Equal Housing and Opportunity Council – which is part of the coalition.
“That means over 50 percent of their monthly income is going simply towards paying for housing,” he said.
The federal government stipulates that no more than 30 percent of Americans’ monthly income should go towards housing costs – in North St. Louis, over 60 percent of households are paying above that line, Burleigh said.
“In the city, it’s becoming more and more evident that we are in crisis in terms of affordable housing, vacancy and crime,” Newcomer said. “Looking at the state and federal level, we don’t expect funding to start flowing. We’ve seen the Affordable Housing Trust Fund work. We’ve seen how it’s impacted families, health and wealth. It’s something that works; and it’s something we already have.”
