Cuts made to state affordable housing funds
The Missouri Housing Development Commission cut $140 million in state funds in the form of low-income tax credit.
"The tax credits are used to reduce the debt that a project has when it is completed. And that allows the developer to charge lower rent because they have less debt to service." says Randy McCoy, Director of Housing Programs at The Kitchen.
He says that the housing cut shouldn't effect low-income developments that are already built, but those that may be built in the future.
"It is almost impossible to make those projects have cash flow and be effective." says McCoy.
"We are not going to be able to develop as many propertires because there really is no incentive to create affordable housing units if they can't recoup the cost of that development." says Michelle Garand, Deputy Director of Affordable Housing for Community Partnership of the Ozarks She says that new developers will have no choice, but to create regular priced housing units.
"It will be harder on our developers to create those housing developments without those tax credits without passing that cost on to the people living there." says Garand.
Affordable housing is a large need in the Ozarks.
"We have built 108 units of affordable housing in the last four years and all three of the projects that incorporate those projects are all full and have waiting lists." says McCoy.
And without more affordable living arrangements in Springfield, the concern is that many people won't be able to afford the cost of living.
"Where almost a one fourth of those living in the community are living in poverty, a good number of those are on a fixed income. The creation of affordable housing is imperative." says McCoy.
"We have a lot of people living in poverty who are housed and that may drive the cost of those units up to a point where they lose their housing." says Garand.
McCoy says that it will be tough for The Kitchen to build more affordable housing developments in the future -- because it would be harder to pay off the debt that the tax credits would normally cover.