Affordable Housing

[DaveKCMO]

Rental prices are going to dramatically increase in Kansas City and it’s not really going to be a supply and demand issue. The dramatic increase in property tax values will be passed through to renters if there isn’t an adjustment in the tax rate. So, it’s really a government caused issue.

The assessments are based on market value. That is literally supply and demand driven. That fact that renters don't see the bill is irrelevant. Government plays a role here through restrictive zoning and requiring taxing authorities to match up with market values but that isn't the only cause.

[langosta]

So home owners underplayed before and now are catching up with reality (true market value)?

[beautyfromashes]

The assessments are based on market value. That is literally supply and demand driven. That fact that renters don't see the bill is irrelevant. Government plays a role here through restrictive zoning and requiring taxing authorities to match up with market values but that isn't the only cause.

The assessment system has dramatically changed causing a wholesale recalculation in the amount of taxes paid. This increase (along with new taxes added like the streetcar) will dramatically increase rents. In many ways, this is a positive. It will bring new money to the city budget to, hopefully, make good improvement to citizens lives. But, it will directly drive up rents, I believe moreso than the consistently slow increase in demand that we’ve seen. When people respond to complaints about affordability they usually claim, “Well, we just have more people wanting to live DT!” implying that’s the reason for increased in costs. But, in this case, it was taxes.

[herrfrank]

^Very true -- several friends are landlords in core KC, and they intend to pass on the increase in property taxes. In many cases, the taxes doubled (like from 2000 to 4000, which still seems low for a half-million-dollar house). Also rents tend to track just below 1% of FMV. Have you seen what you get for 400k in JoCo? A plain jane 1950s ranch with 1.5 bathrooms. Those are 3000/ month to rent. Million-dollar teardowns are happening throughout fancy JC Nichols neighborhoods (but those won't be rentals). Even Ruskin is nearing 200k for a slab-on-grade 2/1.

Cheap places will rent somewhere around $1500/ month, and the nicer neighborhoods or bigger apartments around $3000/ month. Buy while you can still afford it, I believe this is the inflection point to a "new normal" in housing prices in this metro.

KC was cheap for a long time, but with all of the underlying cost increases (sales tax is approaching 12% in many neighborhoods; doubling of property taxes; car insurance and gasoline) the city will be returning to the mean of peer metros like Minneapolis or Denver or Dallas.

[TheUrbanRoo]

KC isn't very cheap & affordable anymore. Especially in terms of the *the metro* median costs.

According to WalletHub, median 2-bed price is around $1410 in the KC metro.

For perspective, it's $960 in the STL metro. $930 in Wichita & Des Moines. Even in Columbus, which is growing, it's $1190.

[langosta]

Let’s make it easier and cheaper to build

[herrfrank]

The housing market in KC is transitioning from a demand-side condition into a supply-side condition, to put it in economic terms. STL, Wichita and other "cheap" metros have demand lower than their built environments. Detroit would be similar. There are more houses than people at the moderate price points, so prices remain low.

Healthy metros have a supply problem. More demand than available housing. This motivates construction, which KC is now seeing. But if the demand outpaces supply, you see price increases.

These features of capitalism are never in perfect balance. The market works them out. And governments sometimes encourage or inhibit market balancing. Property taxes are part of that. So are parking minimums, zoning, restrictive covenants (no longer legal), NIMBYs, Rent Controls, etc.

[FangKC]

On-site stick-built houses are expensive to build. We need to move to manufacturing house parts off-site and assembling them in pieces very quickly. It's harder to do this in older parts of the city where you might be doing in-fill on just one lot. But if you have larger pieces of land, this is probably how to more cheaply build houses. It cuts down on man hours and time spent building. Instead of months, weeks.

3-D printing houses is also a technology that is up-and-coming and might be a game-changer for affordable dwellings.

[Cratedigger]

There’s actually a KC company doing 3D printed houses in Austin right now. 3strands is the name and they just went up for sale:

https://www.youtube.com/watch?v=RDOSDWKHYxY



https://www.iconbuild.com/media-galler ... -in-austin

[FangKC]

https://gablok.be/en/

[dukuboy1]

On-site stick-built houses are expensive to build. We need to move to manufacturing house parts off-site and assembling them in pieces very quickly. It's harder to do this in older parts of the city where you might be doing in-fill on just one lot. But if you have larger pieces of land, this is probably how to more cheaply build houses. It cuts down on man hours and time spent building. Instead of months, weeks.

3-D printing houses is also a technology that is up-and-coming and might be a game-changer for affordable dwellings.

Agree with you, however issue is getting banks to lend on properties that tend to be manufactured or pre-fab. There is a very small window to thread where you can, modular homes for instance with pre-fab components of the home shipped onsite & assembled. But if the home basic comes if 2-3 fully fabricated pieces that get attached together on-site to form the finished property, regardless if it is fixed to a foundation, is considered manufactured by the banks (as if it was a mobile home). So need to find some banks willing to lend or government backing to reduce risk & cover banks in some way to encourage lending

[FangKC]

There will need to be legislation from the Federal Government prohibiting banks from not issuing loans on manufactured homes.

[beautyfromashes]

It’s the system components that increase the cost of housing: electrical, plumbing, HVAC. I think those are the areas, if upgraded with new technology, could rapidly decrease the cost of housing. Self-sustaining lights that power with microwave or water generated by humidity collection. HVAC that also produces drinking water. Efficient water reuse. Running this massive web of supplies through a building is not efficient.

[FangKC]

Labor costs are a large part of creating housing. If one can streamline the assembly and cut the time creating the structure from three months to one month or less, that saves thousands of man-hours. Reducing lot size is another. Many house lots are large enough to accommodate two or more houses.

[FangKC]

Labor costs are a large part of creating housing. If one can streamline the assembly and cut the time creating the structure from three months to one month or less, that saves thousands of man-hours. Reducing lot size is another. Many house lots are large enough to accommodate two or more houses.

---

Only Zoning Reform Can Solve America’s Housing Crisis

By making it impossible to build enough homes in places where people want to live, local governments hurt the economy and democracy

...
Ordinances routinely ban the construction of multifamily housing and require homes to be built on very large lots, artificially boosting the price of shelter—the single biggest expense for most Americans.
...
Homes in those areas could be made much more affordable, however, if localities made it possible to build more units on the available land.
...
Reformers aren’t calling for high-rise apartment buildings in the middle of quiet residential neighborhoods; they typically aim to legalize “missing middle” housing, such as duplexes, triplexes and “accessory dwelling units” (ADUs), or granny flats. Once California required cities to make it easier to build ADUs, Los Angeles saw an explosion of backyard and garage units. In 2022, the city issued 7,160 ADU permits, compared with just 1,287 permits for single-family homes.
...

https://archive.ph/2023.06.26-221351/ht ... s-b5869860

[FangKC]

Is affordable not affordable?

Advocates say KC's new policies use the wrong numbers, which sets the median family income bar too high — and means housing remains unattainable for many

...
Paula Henry had little trouble finding a place to live 12 years ago, when she first moved into her apartment complex near Kansas City’s Beacon Hill neighborhood.

Rents were lower, and some landlords even offered unique specials, such as deposits based on the day’s temperature, rather than first and last month’s rent, she recalled.

Nowadays, local housing is an “entirely different ballgame” for Henry and her neighbors. Although the city has rolled out programs in recent years meant to spur new affordable residences, Henry said the rent levels they entail are anything but affordable, leaving her unable to move despite what she said were issues in her current unit.

“It’s entirely out of balance,” said Henry, a traveling auto mechanic and single mother of three. “If I had to pay (the city’s defined affordable rent) ... I would never see my children. I would never even enjoy the quality of life that the unit would provide because I would never (expletive) be there except when I’m sleeping, trying to go out the next day, hustle and bustle and do it all over again so I can afford a place to lay my head down.”

Henry joined advocacy group KC Tenants after the local right-to-counsel program it spearheaded saved her from eviction earlier this year. Her case was dismissed after a free attorney found a clerical error with her Section 8 housing voucher, she said.

Since its 2019 inception, KC Tenants has emerged as a municipal powerhouse. It mobilized to center historically sidelined residents like Henry in city housing discussions, rather than developers and other profit-driven interests. Those builders, in turn, argue that the group’s policy demands could chill new construction and drive rents still higher.

But KC Tenants has guaranteed itself an even more prominent seat at the table. Four of the six City Council candidates it endorsed in the June 20 election, including group leader Johnathan Duncan, won their races.

The successes ensure that as some of the city’s most ambitious new residential plans surface, so too will a stronger push for affordable housing — and on tenants’ terms.

“Win or lose, this election isn’t about one or two people,” KC Tenants leader DaJanae Moreland said a week before the election. “It’s about changing the political landscape in Kansas City.”
Defining “true” affordability

KC Tenants has put a critical spotlight on how Kansas City defines affordability in the context of individual projects and as broader policy changes.

That’s because the current federal calculation accounts for both renter and homeowner incomes throughout the 14-county metro, including its most affluent areas.

Kansas City determines affordable rent levels using median family income (MFI), as updated each year by the U.S. Department of Housing and Urban Development. In fiscal 2023, HUD set its figure at $104,600 for a local four-person household, up from $97,700 in 2022.

That amounts to $1,569 in monthly rent for a three-bedroom apartment, or $1,255 for a one-bedroom unit, using the city’s 60% MFI ceiling for affordability. Those 2023 rents represent increases from last year’s figures of $1,466 and $1,172, respectively. The math assumes that households will not spend more than 30% of income on rent.

City officials have stood by MFI as the metric long used for most income-based federal programs, such as Section 8 vouchers and Community Development Block Grants.

KC Tenants argues that HUD’s metrowide MFI produces rent levels far exceeding what many in the urban core can pay. Members have campaigned for the city to base the levels strictly on what Kansas City renters earn.

“According to Census data, the area’s median income of renters in Kansas City is $38,383,” Moreland said. “The campaign was based on the idea that what is affordable for Kansas City should not be based on what a homeowner who lives in Johnson County could afford to live in.”

Under the status quo, tenants groups have advocated for housing they call “truly” affordable, at the 30% MFI level. The city last year identified a 17,303-unit deficit for metro rental households at that level — or a 27,563-unit gap, accounting for those already occupied.

Affordable housing set-asides Kansas City enacted in 2021 initially required developers to set aside 10% of units at 30% MFI and 10% at 70% MFI in apartment projects that receive incentives.

The City Council later loosened that requirement to 20% of units at a flat 60% MFI, over fierce opposition from KC Tenants, citing a desire for more middle-class housing.
...

https://www.bizjournals.com/kansascity ... 2023-06-30

[beautyfromashes]

^ So, the city of Kansas City has rents much cheaper than the rest of the metro, yet it’s really the only place KC Tenants seems to operate? If they truly want to bring down rents, why not attack the places in the metro where they are the highest and totally segregated from the poor and middle class?

[FangKC]

Kansas City neighborhoods are suing to take control of housing a Denver company neglected

https://www.kcur.org/housing-developmen ... -neglected

[Highlander]

Kansas City neighborhoods are suing to take control of housing a Denver company neglected

https://www.kcur.org/housing-developmen ... -neglected

Why would a company buy properties and neglect them to the point that they no longer generate revenue? Can't get my head around that one. They still have to pay property tax and likely interest on any loans to buy the property. If they have a short-fall of cash to fix them, even selling them would be advantageous than having a negative cash flow from the properties.

[FangKC]

I looked at three properties they own that have been emptied of residents and are boarded up. My guess is that they are planning gut renovations of the buildings so that they can charge higher rents on the apartments.

The 49th Street apartment complex is next to a bunch of parcels that are getting redeveloped now on MLK Blvd.

https://www.google.com/maps/@39.044549, ... ?entry=ttu