Kansas’ Affordable Housing Tax Credit passed with bipartisan support in 2022, but it’s now on the chopping block after lawmakers voted to phase it out.
The program matches federal dollars with state money to incentivize developers to build below-market housing units that wouldn’t otherwise turn a profit.
With help from the credit, over 4,600 new affordable units are in the works as of February, 2025, according to data from the Kansas Housing Resources Corporation.
Despite signs of progress digging the state out of a decades-deep housing hole, however, lawmakers scaled the credit back this year.
Republican Rep. Sean Tarwater wanted to eliminate the tax credit, not just roll it back as the Legislature settled on. The Johnson County lawmaker told colleagues the program was supposed to cost $25 million per year — but so far it had left Kansas on the hook for nearly $1 billion.
“Oopsy daisy, right?” he said during debate on the plan earlier this year.
The credit originally provided up to a $25 million per-year match to state funds, which would repeat annually for 10 years. This session, lawmakers revised that plan to provide only $8.8 million in new awards statewide through 2028 — and then stop issuing new credits completely.
Just like the original plan, this year’s bill to roll it back earned bipartisan support and Democratic Gov. Laura Kelly’s signature.
But the policy change has homelessness researchers and advocates worried that the drought of affordable housing will keep thousands of Kansans from finding steady lodging.
Affordable housing and homelessness
There is no single cause of homelessness.
Access to educational opportunities, well-paying jobs, affordable health care and community support are just some of the factors that influence whether someone can find a place to live on a long-term basis.
But advocates, like Christina Ashie Guidry at United Community Services of Johnson County, say solutions to many of those issues are downstream of one thing: the availability of affordable housing.
“Do some families have additional needs that need to be addressed? Absolutely,” Guidry said.
But she said the biggest obstacle for many families remains finding a place they can afford to live.
“Unless we have enough housing supply, people who are experiencing homelessness now will take much longer on average to get housed and will be more likely again to fall back into homelessness,” she said.
Kansas is short over 100,000 units that are affordable for individuals earning half of the area median income, according to the National Low-Income Housing Coalition.
Meanwhile, rates of homelessness in Kansas appear to be rising, based on data from the point-in-time count. The Kansas Statewide Homeless Coalition said the 2024 tally was over 2,800 people sleeping on the street on a night in January — 7% more than the previous year.
Being unhoused doesn’t just mean someone is sleeping on the street. They might be living in a car, couch surfing with friends and family, or in and out of shelters.
Regardless of the situation, advocates say building more affordable rental units is a key step in reducing the number of people who don’t have a steady place to stay.
“If the (Affordable Housing Tax Credit) is eliminated, we will undoubtedly see a significant spike in homelessness and housing instability,” the Kansas Statewide Homeless Coalition said in written testimony.
Separate issues?
In an interview with the Kansas News Service, Rep. Tarwater cast doubt on the link between affordable housing and homelessness.
“Let's be honest, most people are homeless because of drugs, and nobody wants to talk about that,” he said. “It's not affordable housing.”
Tarwater, who said he lost a brother to a drug overdose, would rather see state funds go toward rehabilitation programs.
While the relationship between substance use disorders and homelessness is hotly debated, many studies show that the prevalence of drug and alcohol abuse is higher among unhoused individuals. Despite widespread stereotypes, however, it is less clear how often substance abuse leads to homelessness versus the other way around.
There’s also research to suggest that housing interventions can be a valuable tool to treat substance use disorders.
Tarwater views the housing shortage as a separate issue. In lieu of giving tax breaks for affordable rental units, he said the state should support the development of single-family residential neighborhoods.
“I really wanted to focus some of those dollars more on home ownership, which is the American dream,” he said.
That way, he said, the state could help pay for properties that Kansans could own, instead of giving tax breaks to rental property developers. Republican Rep. Kristey Williams echoed that skepticism in a February hearing.
“There are some that are going to benefit greatly from this and others that (will) maybe marginally benefit and then the taxpayer of Kansas, they get to pay for all the rest,” she said.
Supporters of Kansas’ Affordable Housing Tax Credit said that single-family homes are less attainable, more difficult to upkeep, and more socially isolating than more population-dense alternatives.
As to the program’s cost, they pointed to a report on a similar credit in Georgia that calculated a 579% return on investment from state income tax dollars spent.
Rep. Tarwater was unconvinced by those arguments. Just before the compromise bill passed, he indicated that he wasn’t done trying to eliminate what was left of the tax credit.
“We took a page out of Ronald Reagan’s book,” Tarwater said on the House floor in April. “We're going to take what we can get today and fight for the rest tomorrow.”
Zane Irwin reports on politics, campaigns and elections for the Kansas News Service. You can email him at zaneirwin@kcur.org.
The Kansas News Service is a collaboration of KCUR, Kansas Public Radio, KMUW and High Plains Public Radio focused on health, the social determinants of health and their connection to public policy.
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