Last year, Vee Sanchez, Affordable Housing Policy Manager, provided an excellent overview of land banks and how they can be a part of the solution to address our affordable housing crisis. As the affordable housing shortage grows in Missouri, we need to take serious steps in addressing how we view the causes of homelessness, lack of affordable housing, and the solutions needed to address these issues. This is not only about the lack of affordable housing, but also the very real impact this issue has on communities in Missouri.
In 2023, the National Low Income Housing Coalition’s (NLIHC) Gap Report showed a shortage of 114,609 units for low-income households in Missouri; in 2024, we are short 120,102 units. At the same time, 2020 Census data shows that Missouri has 370,165 vacant homes. Meanwhile, the maximum income for an extremely low income family of four is $26,500, but it requires an income of at least $38,553 to afford a fair market rate two bedroom unit in Missouri. We need better solutions to address this growing issue as more and more households are facing housing insecurity and threats of homelessness due to being unable to afford rent.
So why are we still continuing to see sharp increases in our shortage of affordable housing? One reason is the rising cost of rent. Missouri has experienced the largest increase in rent of anywhere in the United States, a 13% increase with a median rent of $1,209. In Kansas City, out-of-state housing developers are buying up properties and turning them into rental properties, driving up rent prices and making it difficult for local Kansas Citians to become homeowners.
Another issue is the increase in “affordable but not available” housing, caused by higher wage earners renting units that would be affordable to lower wage earners, making them unavailable. As rental prices increase, more people are seeking affordable options, which leads to demand not keeping up with supply. This pushes lower income households to rent units that are unaffordable, often paying more than 50% of their income in rent, leading to severe cost burden.
The lack of affordable housing and rising rent costs doesn’t only impact current renters or prospective homebuyers, but also our neighbors who are homeless. Missouri saw an 11.7% increase in homelessness between 2022 and 2023. Lack of affordable housing is the most prominent risk factor for homelessness and the rate of homelessness increases quicker in locations where residents pay 32% or more of their income in rent.
So, how are land banks a solution to addressing the lack of affordable housing and rising homelessness in Missouri? Land banks provide the opportunity to turn blighted and abandoned properties into affordable housing while also increasing property values and creating jobs in our communities.
Seems easy enough, so why aren’t we seeing this happen? These properties come with legal and financial barriers that discourage prospective buyers from purchasing them, which leads to the properties remaining vacant and continuing to deteriorate, while providing no benefit to the communities. This can lead to developers buying the properties and removing them from the market as an option for affordable housing.
Two bills, SB 750 y HB 2065, would expand where land banks can be established, while also removing barriers to purchasing a land bank property by providing that all taxes, special taxes, fines, and fees on real estate shall be deemed satisfied by transfer to a land bank agency. When you remove these barriers, you allow these vacant, unused properties to become a new supply of affordable housing. This assists with keeping land bank properties accessible to those who want to increase the supply of affordable housing in their communities.
We cannot continue to overlook the impact that rising rents, increasing home prices, and lack of affordable housing have on our communities while so many properties sit vacant and unused. Empower Missouri advocates for land banks as one of the solutions to addressing the affordable housing crisis in Missouri.
It seems like an easy choice to me!
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Saint Louis City has a land bank, the LRA, which has been problematic for years. Those in charge of selling the properties in the land bank are reluctant to let them go and lose control of what happens to them. Offers to buy at the land banks asking price are often rejected, though everyone would be better served if the properties were sold and the new owners paying taxes on them. If other cities and areas should definitely consider land banks, but use the LRA as a cautionary tale. There should be a mechanism for reducing the number of properties held by the land bank after a set number of years, even if just by granting it to an interested neighboring property owner if no buyer can be found.