For my final presentation I leaned heavily on the design of policy rather than focusing more on the design of the built environment. The policy I designed is called the Housing & Economic Development Authority.
The Housing & Economic Development Authority (HEDA) is a proposed municipal agency for Kansas City, Missouri that would function as the City’s in-house real estate developer, property manager, and public construction authority. Authorized under Missouri Revised Statutes Chapter 99, HEDA combines acquisition, development, and management of affordable housing with economic development under a single governance structure.
HEDA operates three coordinated revenue and development streams. Stream 1 is acquisition and rental: Section 108 seed financing capitalizes the purchase of existing occupied multifamily properties from the private market, generating day-one rental income that flows to the City through a structured reverse payment in lieu of taxes (PILOT). Stream 2 is new construction, demonstrated at scale by the proof-of-concept Valentine neighborhood redevelopment master plan and phased over the long term as authority capacity matures. Stream 3 is construction services: HEDA’s in-house construction division performs fee-for-service work for other public bodies, mission-aligned nonprofits (including affordable homeownership partners such as Habitat for Humanity Kansas City and the Kansas City Community Land Trust), and qualifying private clients, recycling margin to the general fund.
HEDA’s financial model is revenue-positive from Year 1. Capital costs are funded through a sequenced strategy: a $42.5 million HUD Section 108 loan deployed Years 1–3 (secured by CDBG allocations at zero net cost to the general fund), followed by a master drawdown revenue bond facility issued against demonstrated debt service coverage, the Underutilization & Vacancy (UV) Tax revenue stream, and portfolio rental income beginning Year 4. Acceptance of Housing Choice Vouchers at projected ~50% penetration in acquired buildings closes the gap between deeply affordable rents and authority operating costs by routing existing federal subsidy through HEDA rather than private landlords. Revenue generated by HEDA is constantly reinvested: HEDA’s 90% Operational Capacity Rule ensures that no more than 90% of total authority inputs are consumed by total authority outputs in any year, guaranteeing a minimum 10% net contribution to the general fund at all times while maximizing portfolio expansion.
Maximum rents are capped at the higher of fifty percent of comparable private-market rent or a tiered minimum wage floor (15% of full-time minimum wage gross income for studios, increasing 18% per additional bedroom). Under current market conditions the 50%-of-market formula governs all unit types, producing a weighted average of approximately $615 per month with no annual escalation. Mixed-use developments include ground-floor commercial space leased at below-market rates to locally owned small businesses through a scored application process. At disciplined acquisition pace of 250 units per year plus phased new construction, HEDA reaches approximately 5,263 units by Year 20 and 6,513 units by Year 25, generating a cumulative general fund contribution of $623.5 million over 25 years.