City plans new grant program to spur rental rehab and development
ST. JOSEPH, Mo. (News-Press NOW) -- St. Joseph is opening new doors in an effort to boost the development of middle to high-income rental properties, a growing need in the community.
City officials are proposing a new grant program that would make federal funds available as early as July for developers to either rehab existing structures into rental properties or create new ones, with a focus on accommodating moderate- to high-income households.
St. Joseph Planning and Community Development Director Clint Thompson said the program will encourage development in St. Joseph's older neighborhoods, particularly with vacant/blighted structures or lots in the Downtown and Midtown areas.
"That will be key, not only to provide that additional opportunity for housing, but also for the revitalization of our own neighborhoods," he said. "So "We're looking forward to the opportunity to use some of these older structures that may been originally a single family use be converted into duplex or fourplex potential."
Thompson said the plan is to re-allocate a portion of federal funds from the city's underutilized Community Development Block Program to create the new rental rehab program, which offers a new avenue for affordable rental development with existing programs geared toward homeownership and exterior improvements only.
Grants agreements are designed to not only spur development of rental properties but ensure that rents are in line with market-rate or moderate-income rental costs, a key condition to ensure compliance.
"The cost itself of rehabbing these structures will be borne by the developer," Thompson said. "These funds are utilized on a reimbursement basis."
A 2024 infill housing studied identified a critical shortage of rental units affordable for moderate- and above-moderate income households. The city has just 348 rental units to accommodate nearly 17,000 households in St. Joseph that cite affordable rents costs as being between $1,100 and $1,700 for middle income, or $1,700 and higher for high income.
Dani Coats is one of many individuals who works in St. Joseph but chooses not to live here due to challenges finding options that are both decent and affordable.
"It is very hard," said Coats, who works Downtown. "I feel if people have the stability to pay the money, you know, some of the criteria needs to be brought down a little bit."
Thompson said the program will allow for a wide range of rental re-development, from duplexes and fourplexes to larger complexes with 20 rental units.
"We think that's a key ingredient with housing costs increasing over the past number of years, interest rates, the ability for individuals coming into the workforce, whether they're out of college or just starting out where it's difficult to to qualify for a loan for homeownership," he said.
A budget for the initial round of grant funding will be determined when the city's budgets are finalized in the coming weeks. Roughly $1.5 million dollars in CDBG funds were allocated for fiscal year 2023-2024.
“We'll start off with the initial amount, you know, see how the program success is … If the project program is successful, we have the ability to add to that," Thompson said.
