JEFFERSON CITY • Missouri Treasurer Clint Zweifel wants the beleaguered Missouri Housing Development Commission to do a better job of accomplishing what he says is its core mission: providing housing for those who need it the most.

So Zweifel, who is on the MHDC board, is proposing that the commission start spending a third of its state and federal funding to provide housing for the homeless and mentally ill.

Calling his proposal "transformational" and a "moral imperative," Zweifel urged the MHDC to approve his proposal at the commission's meeting Friday in the capital city. The concept would dedicate about $127 million in yearly tax credits — some federal, some state — to development projects that provide housing and services to the homeless and mentally ill.

"It would address a problem that doesn't get near enough attention," Zweifel said at a news conference in his office.

At the Friday meeting, the MHDC is slated to approve a host of projects that have been delayed for months as Gov. Jay Nixon has clamped down on the approval of tax credits because of the state's budget crisis.

One of those projects, a north St. Louis proposal put together by the nonprofit group Places for People, is the same type of project Zweifel said the commission needs to focus more attention on in the future.

That project would remodel a 100-year-old building in the 5200 block of Page Boulevard into a home providing shelter and services for people with mental illness.

Francie Broderick, executive director of Places for People, said she was "thrilled" that the MHDC would finally be voting on the tax credits for the project. Without the tax credits from the state, the financing for the project — and others like it — would be difficult to obtain, she said.

But beyond her own project, Broderick said she was excited that a state official was getting behind the types of projects that fill a growing need of providing services to the mentally ill population in St. Louis and the state.

"Mental health advocates have looked for a champion for sometime now, for someone who really understands and cares about the critical and urgent needs of people with serious mental illness," Broderick said. "I think we have found our champion."

Under Zweifel's proposal, developers would work with the MHDC just as they do now on other low-income and senior housing projects, but there would be new requirements for such projects to also be tied into mental health providers — either nonprofits or government agencies.

Jackie Lukitsch, executive director of the National Alliance on Mental Illness in St. Louis, said she believed there were developers ready to support such projects that had been turned down for state tax credits in the past.

"Wherever government puts the money, people will follow," Lukitsch said.

She and other mental health advocates who flanked Zweifel for his announcement said there has been an increase in homelessness in St. Louis, especially among returning veterans from the wars in Iraq and Afghanistan, many who are also in need of mental health services.

The awarding of state tax credits in a variety of state programs is a popular economic development tool in Missouri's urban areas. Developers often combine low-income tax credits with historic preservation tax credits to help finance redevelopment of old buildings in the city.

But those tax credits — which can be redeemed dollar for dollar against taxes owed to the state — reduce the amount of revenue available for basic state services. And as Nixon has been forced to cut about $1 billion from the budget in the last two years, he has slowed down the issuance of tax credits after failing to get the Legislature to put a cap on them.

Last month, Nixon appointed a commission headed by St. Louis developer Steve Stogel to study the state's various tax credit programs and make recommendations on which ones were bringing the best return on investment.