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Kansas City mayor accused of retaliating against whistleblower who revealed nonprofit spending

7 months ago
The whistleblower who revealed financial transactions he felt were potentially unlawful by a nonprofit that bankrolled travel and entertainment for Kansas City’s mayor says he is now being targeted with defamation and retaliation. Tom Keating has worked on ethics compliance for political campaigns for two decades, including for Lucas’ campaign and for a nonprofit called […]
Allison Kite

Alton Police: Some Major Crime Category Rates Drop In 2024

7 months ago
ALTON - The Alton Police Department has released crime statistics for 2024, providing residents with a transparent look at public safety trends in the community. The eight major crime categories that are reported include murder, sexual assault, arson, robbery, burglary, theft, motor vehicle theft, and assaults. According to the 2024 Alton Police data, crime rates in five of the eight major categories have decreased from the previous year. The categories of murder, criminal sexual assault, arson, motor vehicle theft, and theft are all down from 2023. The Alton Police said notably, motor vehicle thefts decreased significantly from 129 in 2023 to 89 in 2024. Alton Police Crime Stats Comparison - Released By APD Alton Police Released Key Crime Statistics for 2024: Murder rate decreased by 40% Criminal Sexual Assault decreased by 18% Arson decreased by 33% Motor Vehicle Theft decreased by 31% Theft decreased by 2% Stat Comparison 2024 to 2023: Murder/Non-negligent

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Police investigating smash-and-grab theft in north St. Louis County

7 months ago
ST. LOUIS - Police are investigating a smash-and-grab robbery overnight Thursday morning in north St. Louis County. The robbery took place at the St. Louis Tax Pros Office on Natural Bridge in North St. Louis County. A witness told our Nissan Rogue Runner that a pickup truck driver backed into the building and stole an [...]
Nick Gladney

No injuries reported in fire in north St. Louis

7 months ago
ST. LOUIS - A vacant house caught fire overnight Thursday morning in north St. Louis. The fire happened a little after 1 a.m. on Arlington Avenue in north St. Louis' Hamilton Heights neighborhood. According to firefighters, the house was vacant at the time the fire started and no one was left injured.
Nick Gladney

Empowering solutions for Missouri’s child care crisis

7 months ago
Access to affordable, high-quality child care is not just a family issue — it’s an economic imperative. In Missouri, parents, especially women, are forced to make difficult choices between going to work and ensuring their children are safe and taken care of. Gov. Mike Kehoe’s recent commitment to addressing this crisis in his 2025 State […]
Wendy Doyle

Thursday, Feb. 13 - Guilty verdicts for Former IL House Speaker

7 months ago
Federal prosecutors say they won a historic conviction in the case of Michael Madigan yesterday. The Former Illinois House Speaker was found guilty of wire fraud and bribery. Today, a conversation with Illinois politics reporter Dave McKinney, who has covered this trial from start to finish.

A quiet and cold Thursday, Next storm comes with Friday warm-up

7 months ago
ST. LOUIS - The snow has moved out and our skies are beginning to slowly clear Thursday. Breezy and cold out the door Thursday, with temperatures in the teens and wind chills in the single digits. We will see a nice amount of sunshine Thursday afternoon and clear skies into this evening. Highs only in [...]
Angela Hutti

The Housing Loophole That Lets Wealthy Investors Raise Rents on Poor Tenants

7 months ago

ProPublica is a nonprofit newsroom that investigates abuses of power. Sign up to receive our biggest stories as soon as they’re published.

Four and a half years ago, a newly formed corporate entity purchased a low-income housing complex with 264 apartments in Phoenix. The property had received more than $4 million in federal tax credits and, in exchange, was supposed to remain affordable for decades.

The company then used a legal loophole that stripped the affordability protections from the apartments. The maneuver appears to have been lucrative for the company, which bought the property for under $20 million and flipped it two years later for $63 million. Today, advertised rents there have gone up by around 50%.

Similar stories have been playing out across the country for years, as developers and real estate investors take advantage of an obscure section of the tax code known as the “qualified contract” provision. It allows owners of low-income rental properties that have received generous tax credits to raise rents far sooner than the law typically requires.

Some 115,000 apartments in the United States have lost rent restrictions as a result, according to one estimate. Experts say these conversions are exacerbating the nation’s shortage of affordable housing, which has intensified in recent years. One report recently concluded that the country has nearly 5 million fewer housing units than it needs. The problem is most acute for those with low incomes.

The loophole has remained open for decades despite widespread agreement among regulators and advocates about its harm. Congressional efforts to repeal the provision have failed — most recently in 2023 — though state reforms have trimmed its effects. President Donald Trump has pledged to lower housing costs, but some advocates for reform are skeptical that his administration or a Republican-controlled Congress will strike a statute that can be lucrative to the real estate industry. (The White House did not respond to a request for comment.)

“We have an affordable housing crisis just about everywhere in the country,” said Robert Rozen, a former Senate aide who helped draft the provision and now calls for its repeal. “We can’t afford to lose more affordable units, particularly as a result of a loophole in the law.”

The statute is part of the law defining the Low-Income Housing Tax Credit, which has become the primary catalyst for new affordable rental housing in the country. The program offers developers a tax subsidy worth potentially millions of dollars in exchange for keeping units affordable and renting them only to poor and working-class tenants. Typically that’s households making below 60% of the area median income. For a family of three to qualify in Phoenix last year, it would’ve had to make $55,560 or less.

Rent and income restrictions are supposed to last at least 30 years. But, after just 14 years, property owners may ask their states to find buyers. This opt-out clause was meant to offer wary investors an early exit from the program while retaining the affordability protections on the properties. But it included a critical unintended flaw: States can only sell at prices set by a formula that almost always overvalues the properties. As a result, buyers are rarely found. If states can’t find buyers within a year, owners are free to raise rents on vacant units and, a few years later, on existing tenants as well.

“It was obviously a mistake to include this in the law,” said Rozen, now an attorney specializing in affordable housing. “We didn’t know what we were doing when we constructed the buy-out formula.”

The beneficiaries of this maneuver are often shielded from public view. The Arizona property, previously called Sombra Apartments, was flipped by a Delaware limited liability company that incorporated under the name Sombra Apartments LLC shortly before the purchase and has a small online footprint. Through a public records request, ProPublica received the application that triggered the loss of affordability protections, which shows the LLC was controlled by a real estate investment firm in Scottsdale, Arizona, called ReNue Properties. ReNue’s website says the company specializes in “the acquisition and rejuvenation of underperforming multifamily properties” and has generated an average 81% return. Michael Christiansen, whose LinkedIn profile lists him as ReNue’s CEO at the time of the transactions, did not respond to requests for comment. (More than 5,700 low-income units in the state have lost affordability protections through the same opt-out method, according to a 2023 Arizona Republic report.)

Some companies exploiting the loophole appear to have done so with the indirect assistance of Fannie Mae and Freddie Mac. The government-sponsored enterprises support the nation’s housing sector, typically by buying mortgages to inject cash into the mortgage market. Property records show that the enterprises were involved in loans to owners of low-income housing who then stripped the properties of affordability protections or are seeking to do so. The enterprises’ involvement appears at odds with their declared support for affordable housing. Spokespeople for Fannie and Freddie did not respond to requests for comment.

Two industry insiders defended the qualified contract process as a way to fight the shortage of middle-income housing. That’s the position of Charlie Moline, CEO of Moline Investment Management, who said he has used the mechanism to remove affordability protections from around 20 multifamily properties across the Midwest.

Typically, low-income housing tax credit properties are too old and worn to be converted into high-end market-rate units, he said. But, freed of the income and rent limits, the properties can become appealing to middle-income renters after some basic renovations. “No one’s displaced by what we’re doing,” said Moline, who contends that he keeps rent increases moderate. “Our goal is to expand affordable housing to the missing middle.”

That goal would be of little benefit to Lashunda Williams, a resident of a low-income apartment complex in Omaha, Nebraska, that Moline purchased last year and is taking through the opt-out process. Williams, 33, said she makes $17 an hour as a custodian at an Amazon warehouse and pays $899 for a one-bedroom apartment. “I can barely keep up with my rent half the time,” she said. If it increased, “I would have to move.”

Moline’s argument was similarly unpersuasive to Rozen, the former Senate aide. “The bottom line is the owner is increasing his rental income and tenants who the program was intended to serve are losing their affordable rents,” Rozen said. “And the federal government is being taken advantage of.”

Affordable housing proponents have long called for repealing the qualified contract provision. But congressional efforts to do so have fizzled, in part due to lobbying from developers and private equity firms with interests in low-income housing, according to a former congressional staffer involved in the repeal effort.

Advocates have had more success pushing for state-level reforms. A majority of states now incentivize or require applicants for low-income housing tax credits to waive their opt-out rights, according to Moha Thakur of the National Housing Trust. The Department of Housing and Urban Development, the Federal Housing Finance Agency and the Department of Agriculture’s Rural Housing Service have also recently proposed or enacted policies to combat the problem. That includes a 2023 FHFA requirement that Fannie Mae and Freddie Mac no longer invest in low-income housing eligible for early opt-outs. However, Fannie and Freddie can still back loans on such properties, which is more commonly how they are involved, according to Rozen. (Freddie has said it is studying the issue.) And given the Trump administration’s mass-scale attempts to demolish regulations, particularly those adopted under the Biden administration, it’s unclear whether the new policy initiatives will survive.

The state-level changes have had an impact, bringing the number of apartments lost annually through the opt-out from around 10,000 a year to between 6,000 and 7,000. Without congressional action, however, the loophole remains on the books and a threat to poor tenants. “That loophole shouldn’t exist,” said Joy Noll, a tenant of the Arizona property, who lives on modest housing and disability subsidies. If rents rise further, Noll fears she will have to move: “It made it impossible for those of us who are low income to stay.”

by Jesse Coburn

ProPublica Updates Supreme Connections Database With Previously Missing Disclosures

7 months ago

ProPublica is a nonprofit newsroom that investigates abuses of power. Sign up to receive our biggest stories as soon as they’re published.

We updated our Supreme Connections database with new disclosures on Thursday, adding Justice Samuel Alito’s deferred 2023 filing and eight previously missing disclosures from Justice Clarence Thomas dating back to the 1990s.

Supreme Connections is our database that makes it easy for anyone to browse justices’ financial disclosures and to search for connections to people and companies mentioned within them.

This update includes Alito’s 2023 disclosure, which was released in August after he received an extension, as well as eight Thomas filings from the 1990s provided by Documented. Those filings were not previously available in our database. While federal ethics law requires judges to file these disclosures each year, the law requires most filings to be destroyed after six years, making many past disclosures hard to find.

Alito’s disclosure includes $900 in concert tickets from Princess Gloria von Thurn und Taxis, which The New York Times reported were for her annual music festival in Regensburg, Germany. The Bavarian aristocrat once dubbed the “punk princess” has reinvented herself in recent decades, closely aligning with European conservative and Catholic circles.

The newly added Thomas filings, which cover 1992 to 1999, reveal more than 100 gifts or travel-related reimbursements, including more than a dozen private flights, cigars from the late conservative commentator Rush Limbaugh, and a 1997 trip paid for by billionaire Harlan Crow to Bohemian Grove, an all-male retreat in northern California. ProPublica previously reported how Crow has provided Thomas with extensive undisclosed luxury travel, including several other trips to Bohemian Grove. Thomas has argued he did not need to disclose such gifts.

Browse the database to learn more.

Do you have any tips on the Supreme Court? Josh Kaplan can be reached by email at joshua.kaplan@propublica.org and by Signal or WhatsApp at 734-834-9383. Justin Elliott can be reached by email at justin@propublica.org or by Signal or WhatsApp at 774-826-6240.

by Sergio Hernández