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Low-income housing tax credits

Richardson Ridge Villas, a senior living project off St. John Church Road in Arnold that won low-income housing tax credits in 2013, is shown under construction on Thursday, Feb. 27, 2014. Photo by Stephanie S. Cordle, scordle@post-dispatch.com

JEFFERSON CITY • More than a year after former Gov. Eric Greitens torpedoed state funding for low-income housing tax credits, Missouri lawmakers are taking steps to resuscitate the program.

With Gov. Mike Parson urging the Legislature to reform the oft-criticized program, a Senate panel heard testimony Tuesday on a plan to cap state funding for the program at about $70 million annually, down from an estimated $150 million.

The sponsor, Sen. Dan Hegeman, R-Cosby, tried a similar approach last year with an unsuccessful measure that would have capped state funds at about $90 million.

Hegeman, who chairs the Senate’s budget-writing committee, wants to reduce the amount of credits available to a level that is 50 percent of the federal credits Missouri receives.

The proposal, however, remains a work in progress as lawmakers end their first month of the legislative session. Like others, Sam Licklider of the Missouri Association of Realtors said the cap being sought by Hegeman is too low. “This is a good start,” Licklider said, adding, “We need to solve this problem.”

Parson remains hopeful a deal can be struck, but did not offer specifics Tuesday.

“The governor has been consistent on this calling for tax credit reforms that address housing needs, while ensuring greater accountability and an increased return on the investment of taxpayer dollars. We are confident in the legislature’s ability to develop these necessary reforms,” his office said in a written statement.

Greitens moved to end the program by stacking the Missouri Housing Development Authority in 2017 with members favorable to his views. The board then voted to stop funding the tax credits.

Greitens said then that reforms haven’t been made over the years because “a lot of politicians fear the insiders in this industry.”

The credits have long been criticized as favoring developers. State Auditor Nicole Galloway, a Democrat, found about $150 million in low-income state credits are redeemed a year. Long term, about $1.3 billion are outstanding and obligated to developers, meaning they will be redeemed in future years.

The credits help developers offset the cost of building housing for the working poor and older residents. Defenders of relaunching the program say it helps transform neighborhoods at a reasonable cost and creates construction jobs.

The legislation is Senate Bill 28.

Kurt Erickson is a reporter for the St. Louis Post-Dispatch

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