Addressing the Affordable Housing Crisis with the Housing Trust Fund

Missouri has a severe affordable housing shortage. Our partners at the National Low Income Housing Coalition show 72% of very low income households in Missouri overpay for their housing, and are housing cost burdened. Cost burden occurs when a household pays more than 30% of their income towards housing costs alone, leaving very little for medical care, food, childcare, and other expenses. There is nothing left for these families to save for an emergency, and we should consider that they are all one emergency away from homelessness. 

This situation cannot be solved by the family, because Missouri is also nearly 120,000 units short of meeting the housing needs for low income families. 120,000 Missouri households cannot secure housing which is affordable to them because it simply does not exist. On top of the existing housing shortage, the last few years have brought unprecedented rent, mortgage rate and construction cost increases, leaving tenants, prospective homebuyers, and homeowners needing to make necessary repairs deeply anxious about what that means for them and their families. There is no county in our state where a full time minimum wage worker can be housing secure. Missouri’s minimum wage recently increased to $12 an hour, but these gains have been outstripped by the larger increases in housing costs and other necessities. Working families are stressed out about being able to feed their kids, worried about where their next meal is coming from, and facing choices between keeping the lights on and putting food on the table. 

Lack of safe, affordable housing is having an enormous impact on the health and prosperity of Missouri families and our communities. Without more financial resources, the affordable housing crisis will only continue to worsen. Expanding policies that make housing more affordable can help reduce the number of housing insecure families.

Missouri’s Housing Trust Fund (HTF) was created by the State Legislature in 1994 to help meet the housing needs of very low income families and individuals. Empower Missouri helped to pass that legislation, knowing what a benefit a state HTF would be for low income families. The Trust Fund is currently supported by a $3 recording fee on all deed transfer documents filed in the State of Missouri, collecting an estimated $3,400,000 FY 2023. The annual funding level depends upon the level of real estate activity. The HTF is one of the most flexible pots of money we have to address affordable housing in Missouri, and the only state funds at our disposal (all other funding comes from federal resources, even though Missouri controls the distribution). The Missouri Housing Development Commission (MHDC) administers the HTF, which provides funding for a variety of housing needs, including: 

  • homelessness prevention, 
  • rehab or new construction of rental housing, 
  • rental assistance and,
  • home repair. 

The HTF often receives requests for funding which are significantly above the amount of resources available. This year not-for-profit organizations across Missouri requested over 10 million dollars in grants from the HTF. Many of these funding requests focus on rural South and Central parts of our state, which are often neglected by federal programs. The HTF often ends up funding vouchers and emergency assistance. Increasing the funding level could allow the HTF to focus more on the development of new housing targeted to households with low incomes, a long term solution to reducing homelessness in our state.

SB 284, filed earlier this month, seeks to raise the $3 fee to $9. If passed, SB 284 would:

  • Allow Missouri households with a combined adjusted gross income equal to or less than 50% of the median family income to be eligible for financial assistance for housing.
  • Provide financial assistance for certain residential occupancy projects to households with a combined adjusted gross income equal to or less than 30% of the median family income.
  • Allocate 50% of the money collected by MHDC for the HTF to rental support projects.

Having access to safe, affordable housing is a cornerstone of family security, stability and prosperity. Missouri’s HTF has already made substantial positive impacts on local economies and has successfully increased affordable housing options for low and moderate-income families. Increasing funding to the HTF is a wise investment strategy. While raising the fee from $3 to $9 won’t solve the affordability crisis on its own, dedicating more funding will provide local communities with the flexible, dependable source of income they need to create more affordable housing opportunities.

Expanding the Housing Trust Fund is a priority for our Affordable Housing Coalition this year. If you’d like to get involved, you can learn more about the AHC and sign up here.

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