On December 19, Governor Eric “Geronimo” Greitens metaphorically rappelled into a meeting of the Missouri Housing Development Commission (MHDC) and spearheaded a commission vote to eliminate approximately $150 million of state low-income housing tax credits for 2018. (The EYE is, of course, alluding to Governor Geronimo’s recent stunt whereby he rappelled into a rodeo, generating a clip that went viral – mostly to mockery.)
Instead of continuing the obsolete public housing system that gave us unmanageable and poorly designed towers like Pruitt-Igoe and Darst-Webbe that became blighted within a few decades and had to be torn down, the state low-income housing tax credit (LIHTC) program leverages private investment and market discipline to efficiently inject capital into affordable housing construction. (Without government incentives, private developers would build profitable housing for high-income buyers, not affordable housing for working-class folks.)
Greitens, who didn’t bother attending a single MHDC meeting all year until November, seemed entirely uninterested in MHDC’s mission of creating affordable housing until he had the chance to eviscerate the agency’s largest program, the LIHTC. Then, after appointing several cronies with scant knowledge of affordable housing but an abundance of blind loyalty, he rappelled down to squash the hopes of people seeking affordable housing.
Why now?
Missouri was a pioneer in the affordable housing world, starting a state LIHTC in the early 1990s to match the federal LIHTC program that has benefited from strong bipartisan support in Washington since its inception in 1986. The program has long helped seniors, veterans, struggling families, and people with special needs access decent affordable housing. Missouri’s LIHTC has helped tens of thousands of families find decent, quality homes.
And the need for affordable housing has never been greater. Currently, 23,151 households sit on the St. Louis City Housing Authority’s waitlist. The list has been closed for over two years; the last time it opened, 28,000 households applied for assistance … in just one week. Waitlists in St. Louis County and Kansas City are similarly large, and even lists in smaller counties often approach 1,000. Most county waitlists are so full that they are closed to new applicants. One recent study counted 16,000 homeless children enrolled in K-12 public schools.
Then why is Greitens going after the LIHTC program now?
Like most things about this governor’s administration to date, it’s much more about his personal politics than policy. During his primary, he received the support of very few establishment Republicans. A few former elected officials, however, did gravitate towards his campaign, including former state Senator Jason Crowell (R-Cape Girardeau). But that support was likely predicated on Greitens becoming a vessel for Crowell’s longtime ambition to slash state tax credits programs like LIHTC and the historic preservation tax credit.
And become a vessel, he did. First, he appointed Crowell to a special committee appointed to review state tax credits, a committee whose recommendations echoed those Crowell often made to deaf ears in the Senate. Then he appointed Crowell to an interim seat on the Missouri Housing Development Commission, which awards LIHTCs, an appointment that Crowell has used in much the same way that Reagan-appointed Clarence Thomas once used his leadership of the Equal Employment Opportunities Commission – to completely gut the agency’s mission.
Finally, he became a veritable ventriloquist for Crowell’s clichéd and warped rhetoric about “greedy developers” wearing “Gucci suits and alligator shoes.” The fact is that in St. Louis, most LIHTC units are built by non-profit community development organizations like Northside Community Housing, Desales Housing, and Lemay Housing Partnership, often with the technical assistance of Rise Community Development.
Rise’s longtime CEO Stephen Acree has helped transfer his substantial knowledge of affordable housing development to protégés like Jessica Eiland, whom Acree mentored during her time at Northside and has now brought in -house. Conflating lifelong do-gooders like this are “greedy developers in Gucci suits” is wrongheaded, unfair and destructive.
What’s next?
Greitens and his lackeys on MHDC would like to convert the LIHTC program to a state loan. That would likely be a disaster. Currently, private investors incur 100 percent of the risk for LIHTC projects, but a state loan would mean that taxpayers incur 100 percent of the risk. Since over one-third of approved projects are never built or fall out of compliance, taxpayers, as opposed to private investors, would be on the hook.
Fortunately, the Legislature can resuscitate the program. As with Congress, the Missouri Legislature has generally provided bipartisan support for the LIHTC program, with a few notable exceptions (such as former state Senator Crowell.” The EYE hopes and expects that come January – after it has rejected Crowell’s nomination to a permanent seat on MHDC – cooler legislative heads will prevail and pass LIHTC program reforms that – instead of gutting the critical program – will make it even more successful in meeting the state’s pressing affordable needs.
Like its popular older cousin, Political EYE, EYE on Business – which debuts this week – is a team-written editorial column of The St. Louis American. We seek to bring our perspective to important business and policy decisions and greater transparency to the power brokers who make them.
