With little discussion and just a short period after receiving a list of staff recommendations, the Missouri Housing Development Commission on Friday approved 24 low-income housing projects financed by roughly $380 million in state and federal tax credits.
As expected, experienced developers who also make large political donations to statewide officers who serve on the commission received a significant share of the awards. Four of the five top donors submitted projects, and three – JES Holdings, MACO Management Co. and McCormack Baron Salazar – had projects funded on Friday.
The applications from the five top donors represented 9.2% of the requests and 20.6% of the tax credits awarded.
Of the projects approved Friday, 19 will be financed with what is called a 9% tax credit, named for the percentage of project costs eligible for the credit. The other five use a 4% credit, set aside for nonprofits that also use financing from tax-exempt bonds.
Campaign cash continues to flow from Missouri low-income housing tax credit industry
Overall, the commission authorized $173.5 million in federal 9% credits and $121.4 million in state tax credits, with varying maturities stretching over 10 years. Those projects also received $24 million in other funding.
The commission authorized $44 million in 4% federal credits and $37 million in matching state credits, plus $81.4 million in bond financing and $7 million in other funding, for the remaining projects.
When completed, the projects will provide 1,532 new housing units ranging from studio apartments to four-bedroom family homes in communities across the state.
For only the second time in the program’s history, the commission released the scores that determined which applications were funded.
“For every proposal that is not funded, staff pro-actively reaches out to the applicant,” Executive Director Kip Stetzler told commissioners. “We have a meeting and tell them why their proposal did not get funded.”
The score is not the only measure of a project, he added.
“We give great weight to the scores but the staff’s analysis goes beyond the scoring,” Stetzler said.
After the end of the public meeting in Jefferson City, Stetzler declined to answer any questions about the recommendations.
Members of the commission asked no questions about the staff recommendations. Asked after the meeting about the list, Lt. Gov. Mike Kehoe, the commission chairman, said he “just saw them” for the first time during the meeting and that the commission must trust the staff who scored the applications.
The meeting offered time to question the recommendations, he noted, and none of the commissioners spoke.
“The volunteers here want the staff to follow the process,” Kehoe said.
The commission divides its tax credit allocations among four regions of the state, with the share of the total based on population.
The commission funded three of 11 projects using 9% tax credits proposed for the Kansas City area and five of 21 proposed for the St. Louis region.
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The rest of the state is divided between sparsely populated rural counties and regions in close proximity to cities like Springfield, Columbia and Cape Girardeau. The commission awarded credits to seven of 26 applications from the purely rural areas and four of 24 applications for the regions near the state’s smaller cities.
The commission heard an update on previously approved projects, which have been plagued by inflation driving up costs and rising interest rates that diminish the value of the credits. To finance their projects, developers trade the credits for cash, discounting face value because of the lengthy time before redemption.
Of the 25 projects approved in 2021, five have not completed their financing deals, Stetzler said. Of 28 approved last year, only four have closed.
The average in the past was nine months, Stetzler said, adding he is confident that all the projects will secure the financial backing to begin construction.