This is the first post in a series highlighting the true cost of putting proceeds from the proposed use tax increase towards building an MLS stadium, rather than provide funds for public services.
The following are ideas that could directly benefit city residents should the proposed ½ cent sales tax go into effect. This does not advocate for or against the passage of the increased sales tax.
Backstory: On February 1, the Board of Aldermen approved the financial plan for a new professional soccer stadium that will be put to a city-wide vote. Included in this plan is a projected $4 million annually in public funding through a 1/2 cent use tax increase (combined with other public money). Normally, the use tax — a citizen-led tax increase to fund public services — raises money for three programs: the Health Care Trust Fund (HCTF), and the Affordable Housing Trust Fund (AHTF), public safety, and demolishing dilapidated buildings. The proposed stadium plan would divert money from these trust funds and budgetary areas to help finance the city’s portion of the stadium bill.
When it comes to improving housing equity, a properly funded AHTF is essential. Per the most recent use tax legislation, the city is required to dedicated at least $5 million of the revenue raised by the use tax to the AHTF (this already being a major cut to the original allocation approved by voters). It currently receives $4.5 million per year, meaning the city is failing to meet that requirement. Should the use tax bill pass, that money could almost double the AHTF’s annual budget to a total of $8.5 million. Instead of using the higher use tax revenue to pay for a soccer stadium, here are 3 ways that extra money could help the AHTF build enough capital to fill some of the gaps in St. Louis’ housing safety net.
Increase available home repair assistance money for low income families. One thing that gives a lot of bang for the buck is home repair funding. It keeps houses that would be abandoned or condemned off of the Land Reutilization Authority’s (LRA) rolls and is often one of the cheapest ways to retain affordable housing and stop the intergenerational destruction of wealth in lower income families. While a program already exists to serve this purpose, it is often underfunded and has a years-long wait list for those qualify for assistance. A sustained boost from increased new use revenue from its traditional $150k-$250k/yr average (with notable, but sporadic, spikes) would allow St. Louisans to continue enjoying our city’s historic architecture while also enabling families to remain in their homes. Oftentimes beneficiaries are older adults living on fixed incomes meaning that they’re able to age in place. It also means that the next generation inherits a home that has value, rather than a building with so many deferred maintenance issues that, when combined with property values destroyed by generations of redlining, make it impossible to get a loan for repairs. These are issues disproportionately faced by residents in predominantly African American and low-to-moderate income wards who make up the majority of people on the home repair program’s waitlist.
Establish a “Greenlining” fund. The single family home buying markets in two of St. Louis City’s largest African American areas — north St. Louis and southeastern neighborhoods like Gravois Park and Dutchtown — are struggling. Homeowners and potential homeowners in these areas face the dual issues of lack of access to credit and depreciated home values due to historic and present-day redlining, exacerbated by the lingering effects of the Great Recession on Black communities. Decades of redlining have destroyed values by pushing the market primarily into cash transactions, thus limiting the selling price for people’s houses. Repeated thousands of times, it makes it so that the entire market in these neighborhoods is driven by cash or commercial lending purchases (often bought by landlords investing in cheap, high-return rental properties). Even with the lower selling prices, many neighborhood residents can’t afford to buy a house outright. This is where the lack of credit access is crucial. A lot of people are currently trapped in perpetual renting because they can’t afford a cash home purchase. Added to this burden is the fact that, per a 2016 report, banks routinely discriminate against African American and low-income neighborhoods when it comes to approving home loans. Many people are stopped from homeownership and reinvesting in their neighborhoods, not because of their income, but because of barriers to credit access. And, as mentioned before, even if someone is able to get a loan to buy a house, the cost of materials makes it virtually impossible for families to buy a “fixer upper” and get a loan for the rehab. Why? Unlike whiter neighborhoods, the post-rehab cost won’t appraise for a high enough amount to meet the bank’s standards for lending due to depreciated home values in the neighborhood.
Greenlining, the practice of proactively bringing resources and investments to communities harmed by redlining and other discriminatory policies, is one way the city can work to combat these conditions. Increased AHTF money could allow the city to work with area nonprofits and banks to fund greenlining practices like establishing a Homeowner’s loan program similar to one currently underway in Detroit. Families could qualify for the program based on agreed upon income requirements, not the post-rehab or appraised value of their home. It would also allow families take out mortgages worth up to 150% of their house’s appraised value. This program would occur in conjunction with anti-redlining measures such as enforcing fair housing and lending laws as well as the Community Reinvestment Act.
Increase funding for “rapid re-housing,” social services, and other programs to combat homelessness. Rather than depend on large project-based grants to “cure chronic homelessness,” the city should instead focus on providing long term financing that can be budgeted for continuous programming. This is extremely important for the “wrap around” services that are necessary to successfully transition many folks into long-term, stable housing situations. Funding for these services is vitally important for any policies or programs to succeed, and can be bolstered by steady income from increased use tax revenue. Money could also be used to decentralize the city’s current homelessness strategy. In other cities, governments and nonprofits are building shelters and service centers dispersed throughout various neighborhoods. This is in contrast with the dominant model of funneling a diverse population into large and geographically concentrated facilities. This also has the added advantage of allowing people to live close to their places of employment (or potential employment opportunities).
The city’s notoriously long Section 8 waiting list could also be improved by using local funding to increase the amount of city housing vouchers. This could benefit many of our area’s lower income families by helping shelters and nonprofits find private housing for homeless families and individuals who would otherwise be unable to afford private sector housing.
These are just a few of the ways that a higher use tax revenue could be used to increase the quality of life for our city’s most marginalized residents. Look out for more posts on how increased revenue can be used to improve other program areas funded by the use tax.