St. Louis Needs Affordable Homes
For those seeking affordable real estate, diverse culture, and an endless supply of toasted ravioli, St. Louis is usually on their radar. However, as low-interest rates fuel demand for property, that’s quickly changing. Like the rest of the country, St. Louis is experiencing a spike in demand and a drop in inventory, pushing home sale prices to new heights. Year-over-year, home prices in the Gateway to the West have increased by 13.5%. That’s great news for real estate professionals and homeowners, especially since demand doesn’t seem to be slowing down anytime soon. However, this situation is making an already prevalent affordable housing crisis even worse.
“[The affordable housing crisis] doesn’t look to be changing. We do not expect to see some big swell of new listings coming, and there’s certainly not enough building taking place to dramatically increase those numbers,” Sam Hall of The Warner Hall Group of Dielmann Sotheby’s International Realty told KSDK News.
St. Louis’s Affordable Housing Challenges
Even before the onset of COVID-19, the city of St. Louis’s most economically burdened residents faced an affordable housing challenge. One 2018 study published by the National Low Income Housing Coalition reported that a St. Louis resident earning minimum wage must work 81 hours per week to afford a modest apartment. What’s more, 25% of Missouri renter households are considered to be extremely low income. A household of four earning a maximum of $25,100 per year or less is deemed extremely low income.
How St. Louis Is Fighting Its Affordable Housing Crisis
In 2018, voters in Missouri chose to gradually raise the state’s minimum wage, helping those who are employed at that level have more pocketable income, higher credit scores, and make their rent payments on time.
The Economic Policy Institute, which has extensively studied the effects of minimum wage increases, noted the following in their testimony before the U.S. House of Representatives Committee on Education and Labor:
“The bulk of recent economic research on the minimum wage, as well as the best scholarship, establishes that prior increases have had little-to-no negative consequences and instead have meaningfully raised the pay of the low-wage workforce.”
Additionally, their testimony revealed that, if the minimum wage had risen with the total economy productivity from 1938-2018, the minimum wage would be around $22.19 per hour by 2024.
Missouri is raising its minimum wage to a more modest $10.30 per hour. However, even that minimal increase doesn’t mean this change won’t pose a challenge to many; business owners operate on tight margins, particularly those who own smaller businesses.
“We’re proud to be part of the advancement of wages, but at the same time, it’s going to take some definite buckling down and making it happen,” Cory Flament, owner of Flamentco’s The Place Pizza in St. Louis told St. Louis Public Radio.
St. Louis Prioritizes Lower-Income Families and Revitalizing Their City
While this wage increase should positively affect approximately 200,000 workers in Missouri, the government has also enacted a policy to offer relief for families trying to find affordable housing. Specifically, the St. Louis County Council approved legislation to establish an Affordable Housing Trust Fund using proceeds from the sale of medical marijuana.
This fund aims to prioritize the needs of households earning less than $35,000, single-parent families with children, older adults, and households experiencing homelessness or at risk of homelessness, particularly if children are involved. By looking to combat the affordable housing crisis on multiple levels, we’re hopeful that the city of St. Louis can strike a balance between its fast-paced demand and providing for all of its residents, regardless of their income level.
Efforts extend beyond the government, too. St. Joseph Housing Initiative, a local non-profit, is actively taking vacant, uninhabitable homes and renovating them into habitable entry-level properties that will help revitalize areas of the city.
“Our mission is twofold, to stabilize neighborhoods and to stabilize families with homeownership. We are focused on vacant properties, long vacant properties,” Marueen McCuen, the executive director of St. Joseph Housing Initiative told KMOV news.
Combined, these efforts should help stabilize property values in the St. Louis area, as well as help economically disadvantaged households become potential home buyers — now that’s good news for an already growth-oriented market!
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