March Policy Newsletter
The long-term challenges facing St. Louis and how we can address them together
A Shrinking City with Increasing Demand
St. Louis city has been losing population for decades. When I took office two years ago, the trend had not changed. In 2025, there are 287,000 people who call St. Louis city home, down from a peak of over 850,000 in the 1950s.
To live in St. Louis city today is to witness the consequences of poor past decisions and the realities of the post-industrial era. Infrastructure built to serve a much bigger population falls behind on maintenance, from streets and sidewalks to water pipes and mains. City services like trash pickup, filling potholes, park maintenance, tree trimming, and more are struggling as a result of a diminished tax base.
However, the city continues to spark with energy from the arts and food scenes to the myriad uses people continue to find for our historic brick buildings. If we make the right decisions, we can reverse our city’s decline and see it grow again. There are even signs that some of these decades-long trends might be reversing.
St. Louis city has fewer housing units today than it did 30 years ago. Through demolitions and deconversions, St. Louis is losing housing faster than we are building it. With a population that is still declining, some people might be unconcerned by this, but when we talk about housing, we need to talk about households. The term “household” describes a house and its occupants counted as a unit. It is a much better measure for housing demand because multiple people can live in a single unit. In the 2020 Census, the number of households in St. Louis city increased, bucking a nearly 70 year trend of decline.
People live differently than we did even 10 years ago. The family unit is smaller, and people are not having as many kids. Working from home is far more commonplace than it was 5 years ago. It’s safe to say that people are looking for different things in a home than they used to. The city’s ability to grow depends on what we have to offer: A big part of that is the structures people choose to call home - our housing.
Meeting Demand
New housing construction in St. Louis has slowed significantly as of late. Some small scale builds are happening, but many larger projects are stalled. Recent proposals for the AT&T Tower and the former Millennium Hotel site are exciting, but remain pictures on a page until they break ground. Other projects like the Albion tower in the Central West End have been delayed for years due to rising costs. According to the St. Louis Business Journal, building permits are down by 24% since 2021.
This is unsurprising in 2025. The pandemic had its part to play. Just as it created havoc in our personal lives, it also upended labor markets and supply chains around the world. The interest rate for a 30-year fixed mortgage nearly tripled from record lows of 2.6% in 2020 to around 7.5% in 2023, making it more expensive to borrow money, and construction materials have followed the same trend, increasing nearly 40%. These drastic changes have created volatility in the housing market, making it difficult to calculate risk and slowing down new construction significantly.
Much of this volatility is macroeconomic — out of our control as a city. But we can still make progress despite headwinds with effective local policies. To grow St. Louis city, we must build more housing of all types. The city does not have a development arm that actually builds, so it depends on developers to build all housing, whether it is single-family, multi-family, affordable or market-rate. If the city wants to create housing, and every development is a math equation, that means we have to figure out a way to make the equation work.
The city has tools that it can use to help make housing creation possible, but from lengthy city review processes to incentive reform that is not being followed, the city is dangerously out of sync with the moment we find ourselves in, and the numbers bear that out. With a lack of supply that meets demand, rental prices are rising. If we want to talk about affordability, we have to talk about supply.
Housing is not the only fix that St. Louis needs to succeed, but it is one of the most important areas where St. Louis can improve. Housing justice is economic and environmental justice. It is key to addressing climate change, wealth inequality, and racial inequity. Housing is about people, and if we want our city to be somewhere that LGBTQIA+ people, Disabled people, immigrants, and Black and Brown people call home, then we owe it to them and our city to examine our policies to make sure everyone has a quality home to live in. Housing is a human right, but it must be built and maintained.
Room to Grow
Anyone seeking to build housing in the city today must go through a gauntlet of processes, including neighborhood engagement that differs from neighborhood to neighborhood. If, like many buildings, the project needs a variance from a part of our zoning code, they need to go to the Board of Adjustment. If the project involves tearing down a building in certain parts of the city, the Cultural Resources Office and the Preservation Board are involved. For projects that need incentives, the process includes the Land Clearance for Redevelopment Authority (LCRA), the St. Louis Development Corporation (SLDC), the Tax Increment Financing (TIF) Commission, the Mayor, the President of the Board of Aldermen, and the Board of Aldermen itself. If you’re counting, that’s more than seven different bodies, all made up of people with different ideologies and different levels of knowledge. The involvement of so many political bodies makes our processes unpredictable and very difficult to navigate.
With so many factors suppressing new construction, St. Louis city’s ability to grow is severely threatened. We can make our permit review faster, our processes more predictable, and we can help create quality housing by working with the people who build it. Housing markets are complicated, but the costs are quite calculable. To create more housing, the costs of construction must be able to be justified by the sale or rental price. The average rent and home prices in St. Louis is less than other cities, and yet it costs just as much to build here as it does in New York or Chicago. The city needs more quality housing, and if it wants it, then it must play a role in making projects possible, including the use of tax incentives so that the cost of building more housing is justified in our market.
In 2016, SLDC commissioned a report to gain a better understanding of past and present use of incentives. The report recommended a comprehensive citywide strategy for development, citing that the “involvement of the…individual Aldermen in economic development activities is notable… it is difficult to shape a coherent, comprehensive citywide plan for development from…28 individual approaches to development.” Indeed, St. Louis is quite unique in the way we handle development, even amongst neighboring municipalities, and in the long-run, the Board should work to remove ourselves from this process entirely, as many other cities do. Today, the same problem persists with the Board’s involvement, leaving our city’s ability to grow at the mercy of political whims that can be untethered from current realities. This is where we would expect our city’s reformed process for tax incentives would come into play.
Building on the recommendations from the 2016 report, the Board of Aldermen passed incentive reform in 2022. Ordinance 71620 attempted to outline a predictable and transparent process around the granting of tax incentives. As part of that extensive process, SLDC created a developer portal, standardized a “but-for” test that determines if the project can occur without incentives, and adopted the use of a community benefits scorecard to provide potential developers with a rubric to understand their eligibility for incentives and ensure alignment with our city’s priorities.
Unfortunately, we are not following that process. Even when a project meets the "but-for" test and aligns with the stated priorities on the scorecard, new housing is being held up by additional demands by politicians.
Last year, the Board of Aldermen passed seven bills that provided tax subsidies, an 88% decrease from five years ago when the Board passed over fifty bills in the 2019-2020 session. Some of that decrease should be celebrated. In the past, the city has seen abuses of these tools and people are right to demand transparency and accountability in their usage. However, we will not have the housing our city needs if we cannot make the numbers work, and city leadership needs to understand this.
I have been in meetings with city leaders where I have heard them tell developers that “the scorecard is just a draft” that needs to be updated to “fit this Board’s beliefs.” It is impossible to estimate the feasibility of constructing more housing when the goalposts are moved again and again behind closed doors. Many builders are passing on St. Louis city completely, citing the hostile attitudes in government and the difficulty of navigating our processes. This leaves our city without room to grow, and condemns some neighborhoods to ever-increasing prices.
Adding housing anywhere in the city helps the entire city if it meets demand and activates a vacant piece of property. New housing stabilizes prices in neighborhoods where scarcity of affordable options can force people out, like a cruel game of musical chairs. Additional housing has the ability to increase our population overall, but if we do not have the kind of housing that people are looking for, they might land elsewhere like the county or St. Charles.
Another argument often raised against the incentivization of housing is the impact on our public schools. The claim is that subsidies like tax abatements and TIF’s do damage to our students by giving away tax dollars on which the public schools depend. But this is something that even the school district rejects, writing in their Annual Comprehensive Financial Report, “The District’s participation in future economic growth is dependent on development activity, assessed values, tax rates, tax abatement and tax-increment financing (TIF) projects.”
Thanks to the work of past alderpeople and activists who advocated for reform, the city no longer issues 100% tax abatements. Any incentivized project that gets off the ground is taxed at some percentage (usually between 10% and 25%) of the increased assessed value, resulting in new money for the city and the school district. This new revenue is a huge benefit to our residents on day one.
St. Louis city has plenty of vacant land. When empty land remains undeveloped, it is taxed as an unimproved piece of land, netting the city and the schools $0 in additional revenue. But when improvements are made, the value of the land increases. If tax incentives are used to make those improvements possible, then taxes are partially abated for a set period of time (usually between 5 and 15 years). It is a win-win situation for the city, the schools, and all of the taxing districts. The city gets added housing, and both the city and the school district get additional revenue.
The use of tax incentives also comes with other built-in benefits for our communities. Currently, projects that are granted incentives require the use of minority and women owned businesses, and they must pay prevailing wage to their workers. Past Boards added these requirements, expanding them in 2020 and again in 2025. Publicly subsidized projects should have a public benefit, and while these requirements may increase the costs of projects, a pro-labor, pro-equity approach makes our city stronger.
The Board of Aldermen might be tempted to add more requirements for incentives, forgetting that the purpose of them is to close the gap in financing and make projects possible. If the burden of these extra requirements gets to the point where it outweighs the value of the incentives, then we will have made it even more difficult to create new housing. We get NO benefits when we do not build, settling for abandoned parking lots and empty non-profit buildings instead of places where people could live and be a part of our city. The schools will get nothing, workers will not get jobs, people will not get housing, and land will remain unproductive for anything other than growing weeds.
A Job Never Finished
I continue to work on the Board to make St. Louis a place that people want to call home, and I am joined by many in this effort. If we work on the connectivity of our city and create walkable, bikeable environments where people do not have to own a car, it can be one of the most equitable things we can do for our residents. That is why I spearheaded the effort to create our City’s first Department of Transportation, and why I continue to advocate for transit-oriented development, better public transit, improved infrastructure, and other policies that improve the lives of St. Louis residents. Because a strong tax base is necessary to deliver city services and fund our schools, I will almost always be in favor of tax incentives that create more housing in our city.
There is more that the city can do to help create more housing, including improvements to the city's overly complicated processes that are on the horizon. An update to our zoning code is in its early stages now that the city has formally adopted the new Strategic Land Use Plan just last month. But we should not be fooled into thinking that just upzoning or changing parking minimums is going to fix the problem. It must be a comprehensive solution. We can build more affordable and market-rate housing, strengthen our Building Division, speed up our permit review, fund our right to counsel and impacted tenant programs, fund home repair and tax assistance programs that keep people in their homes, incentivize Section 8 participation for landlords, create repair funds for affordable housing, and more.
We also find that cities who place an emphasis on diversity and connectivity foster a more welcoming environment. There will be a day when the shadow over our country passes. Immigration is the future, regardless of the xenophobic moment we find ourselves in right now. If we make St. Louis a haven for immigrants, people of color, LGBTQIA+ folks and everyone that wants to call our city home, it will help us find the growth we have been looking for. We can hold that door open by focusing our work on the aspects of city living that make St. Louis a place that people want to call home. But before we can welcome new St. Louisans with open arms, we have to make sure that their future homes are built in the first place.
