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Housing a Critical Component of Economic Development

Mar 31, 2023

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Kansas’ record-setting pace in economic development means significant job growth, with the state creating or retaining almost 56,000 jobs since Governor Laura Kelly took office in 2019.

That has the Kelly administration aggressively tackling a pressing challenge that comes with rapid job creation — making sure there’s enough affordable housing for a fast-growing workforce.

Economic development is highly dependent on available and adequate housing. In 2020, Governor Kelly called for the state’s first comprehensive assessment of residential housing needs in nearly 30 years. Results of the Statewide Housing Study outline current opportunities, goals and potential strategies to increase affordable housing, and particularly in rural Kansas where housing inventory is most strained.

Results of the study showed Kansas’ aging housing stock presents a major challenge because the cost of renovation or new construction is higher than the market value. In response, the Kelly administration has collaborated with state lawmakers and community partners to jumpstart numerous sensible housing initiatives.

For one, Governor Kelly’s 2022 budget amendments included a new, $50 million housing trust fund that’s already producing results. For example, the City of Russell is preserving its history and benefiting future generations by redeveloping the former Holland Hotel into as many as 11 loft-style apartments — a project made possible by one-time funding for housing and economic development projects in the bipartisan 2022 budget bill.

Other funding coordinated by the Kansas Department of Commerce includes the American Rescue Plan Act Building Opportunities for the Disabled and Elderly (ABODE) grant program, which is distributing $10 million for new construction projects and renovation of affordable multi-dwelling housing units for the elderly and disabled.

Commerce also coordinated the Startup Housing Opportunity Venture Loan (SHOVL) program to help developers with expenses before the closing of permanent financing for housing developments. SHOVL was designed to assist with construction of housing in communities with populations of 10,000 or less by providing no-interest loans of up to $25,000 to private developers, non-profit organizations and local governments, with a 20% match.

An annual funding opportunity comes from Community Development Block Grants (CDBG), which includes funds for rural communities to support housing rehabilitation and neighborhood development projects. Demolition of unsafe and blighted housing is also an allowable use of these funds. CDBG housing projects must directly benefit low- to moderate-income individuals.

CDBG also makes vital investments in quality-of-life improvements such as parks, libraries, community centers and non-profit childcare facilities. Communities in Kansas have received $75.7 million through the CDBG program in Kansas since Governor Kelly took office, including almost $5 million for housing rehabilitation/demolition or neighborhood development projects. Learn about available CDBG programs and check your community’s eligibility by clicking here.

The state’s housing toolkit also is making a difference in smaller communities. For example, the new Rural Housing Incentive District (RHID) Upper Story Housing Program is producing results. In 2021, the state adjusted the program, which assists in financing for housing construction projects in rural towns, to include upper-story development.

It’s been a game-changer in places such as Emporia, where an upper-story project on Commercial Street is breathing new life into an aging building by creating 10 loft apartments, three first-floor storefronts and climate-controlled storage in the basement.

Still another good tool is available in the Housing Resources Developer Database, which identifies developer skills and preferences so they can be matched with housing needs in Kansas. Also, the Housing Assessment Tool (HAT) is a self-assessment guide for communities to gather and analyze data on their housing inventory, partner with relevant stakeholders and develop priorities for local housing investment — a good first step for communities addressing housing.

The State of Kansas’ thoughtful, multifaceted approach to developing more affordable housing statewide will help attract and retain the workers Kansas needs to continue its record-breaking economic success — and allow communities to grow and provide the quality of life every Kansan deserves, regardless of their zip code.

For more information on any of the tools and funding opportunities available to encourage affordable housing, please check out the Kansas Department of Commerce website’s Housing Resources in Kansas at, or the Kansas Housing Resources Corporation at

To learn more about Kansas’ award-winning economic development programs, please visit the Kansas Department of Commerce website at