The federal government incentivizes the private sector to build and rehabilitate more public housing through the low income housing tax credit, which has existed since the Reagan administration.
The credit gives developers tax breaks in exchange for building or renovating low-income housing.
More than three million affordable housing units have been financed through the program, according to the Department of Housing and Urban Development, which calls it “the most important resource for creating affordable housing in the United States today.”
Developers who build in “difficult development” areas, which include St. Louis, are rewarded with a reduction in federal tax liability via tax credits spread over 10 years.
Missouri had a state-based low-income housing tax credit that matched $140 million in federal low-income housing tax credits, but former Gov. Eric Greitens, R, and the Missouri Housing Development Commission voted last year to discontinue using state money to do so — leaving housing advocates concerned that production of affordable housing projects would decline.
Current Gov. Mike Parson, R, opposed that decision, but hasn’t yet moved to change it.