Like many parts of North St. Louis, a majority of the buildings around St. Ferdinand Avenue and North Sarah Street are empty or a little more than rubble.
But that’s about to change. In January, the nonprofit Northside Community Housing Inc. secured $250,000 in funding from the city’s Affordable Housing Commission to build 43 mixed-income townhomes and apartments at that location – a $9.5 million project. Jessica Eiland, president of Northside, said the development will have a “huge psychological and financial impact” on the neighborhood.
“When you start fixing things up, it really means something for the community members,” Eiland said. “And it shows that the city is willing to make it a priority to invest in this community.”
While the project is largely made possible by state tax credits, the money from the Affordable Housing Commission was able to fill the gap in the project funding.
“Those little amounts can make or break a project,” Eiland said.
However, Missouri Senate Bill 285, sponsored by state Senator Andrew Koenig (R-Manchester), proposes to cut state tax credits that make projects like Eiland’s possible. Now the Affordable Housing Commission’s funding has “become more important than ever,” said Karl Guenther, a community development specialist at University of Missouri St. Louis.
“The Affordable Housing Trust Fund is a tool the city has to improve neighborhoods, households and the families that reside in them,” Guenther said.
In 2002, city voters approved a proposition to allocate tax revenue generated from a local use tax – or business tax – to affordable housing, public health, public safety and neighborhood preservation. The Board of Aldermen established that $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.
Advocates say that this April election will be critical for the future of affordable housing. On April 4, voters will decide whether or not they want to use $60 million in taxpayer dollars to build a 20,000-seat Major League soccer stadium just west of Union Station – a $155 million project. Part of the stadium’s funding source dips from the same tax revenue used to fund the Affordable Housing Trust Fund.
Advocates say that if the stadium initiative passes, there is no chance that the funding for affordable housing will increase – or ever be funded at its minimum level.
“When you look at the special use tax, even before this proposition of the soccer stadium, we aren’t fully funding the Affordable Housing Trust Fund,” said Molly Metzger, assistant professor at the Brown School of Social Work at Washington University. “We already have a problem.”
Proponents say that funding for the stadium will come from an estimated $4 million that’s generated annually from an increase in the local use tax. This increase would only be available if voters also approve a 0.5 percent retail-sales tax increase meant to fund public safety cameras, neighborhood development and MetroLink expansion. The use tax automatically increases when the sales tax does. And if the sales tax is not approved, then the public funding for the stadium is automatically dead.
Proponents also tout that it will create 428 permanent jobs from team and stadium operations and fill 21 acres of vacant land.
About 24 percent of African Americans spend more than half of their monthly income on rent and utilities, according to the Equal Housing and Opportunity Council. The waiting list for Section 8 housing in St. Louis is years long. And for every 100 extremely low-income families, there are only 21 housing units that are in their price range in St. Louis city, according to the Forward Through Ferguson report. This means that these families can easily become homeless at any time.
Even if the trust fund had been receiving the full $5 million per year since 2011, it still wouldn’t be enough to transform the city’s problems with affordable housing, Metzger said.
“But it’s enough to transform the lives of many families,” Metzger said. “We can’t have strong communities without affordable housing.”
If the sales tax proposition passes and the stadium fails, then there is a chance that affordable housing could receive more funding, advocates believe.
So where does the money from the Affordable Housing Trust Fund go?
In 2016, the trust fund received $4.4 million, according to the comptroller’s financial annual report. About $1.2 million went to homeless prevention and shelters, and another $790,000 went to transitional housing.
About $1.3 million went to new building developments for affordable housing. And the remainder went to home repairs, rent and utility assistance and other programs to keep people from foreclosing on their homes.
Mayoral candidates and stadium
On February 4, the Board of Aldermen passed a board bill establishing that taxpayers will pay for $60 million of the soccer stadium’s construction if they approve the proposition on April 4. The St. Louis Development Corporation will issue $50 million in bonds, which will be paid for with the use tax revenue. And remaining $10 million of the city’s investment will come from sales taxes at the stadium.
Four of the candidates running for mayor this spring are aldermen. Alderwoman Lyda Krewson of the 28th Ward and Board of Aldermen President Lewis Reed voted in favor for the bill.
Krewson did not return The St. Louis American’s request for comment regarding her vote.
Reed said that if voters approve the stadium proposal, it doesn’t mean affordable housing funding is at a loss – that is, if they elect him mayor.
“Affordable housing is a department under the mayor’s office, and it is up to the mayor, not the Board of Aldermen, to instruct the budget director to include the full $5 million (not $4.5 million) for affordable housing at the very beginning of the budget process,” Reed said. “When I become mayor, I will direct the budget director to do just that.”
Alderman Antonio French of the 21st Ward, who is also running for mayor, voted against the bill.
French said, “The soccer stadium would use funds that would otherwise go towards funding the Affordable Housing Trust Fund, demolition of unsafe vacant buildings and funding the police department. That’s why I opposed this bill and will urge voters to vote ‘no’ in April.”
Tishaura Jones, currently St. Louis treasurer and also a mayoral candidate, said she opposes the proposition for the soccer stadium.
“Funding a new soccer stadium with money intended by voters to pay for affordable housing in city neighborhoods is the last cynical gasp of an administration that has spent 16 years robbing Peter to pay Paul and, sometimes, Paul’s rich friends,” Jones said. “It is why I cannot support the scheme as it appears on the April ballot.”
This is the language that will appear on the April 4 ballot in the city.
Shall the use tax paid by businesses on out-of-state purchases and derived from the one half of one percent increased use tax, which corresponds to approval and levy of an Economic Development Sales Tax in the City of St. Louis, be used for the purposes of minority job training and business development programs, and a portion of construction costs, but not construction cost overruns, of a multipurpose stadium for soccer, local amateur sports, concerts and community events? A use tax is the equivalent of a sales tax on purchases from out-of-state sellers by in-state buyers and on certain taxable business transactions for which a sales tax is not levied. No taxpayer is subject to a sales tax and a use tax on the same transaction. The City shall be required to make available to the public an audited comprehensive financial report detailing the management and use of the portion of the funds each year.
