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St. Louis is losing multifamily units. Some aldermen want to charge a conversion fee

Homes line the streets of the Shaw neighborhood in south St. Louis, an area that has experienced some of the highest conversions by developers flipping multi-unit buildings into single family homes over the last five years.
Corinne Ruff
St. Louis Public Radio
Homes line the streets of the Shaw neighborhood in south St. Louis, an area that has experienced some of the highest conversions over the past five years by rehabbers flipping multi-unit buildings into single-family homes.

Over the past five years, St. Louis has lost nearly 400 housing units, as developers rehab multi-unit buildings and resell them as single-family homes. The impact is concentrated in south city neighborhoods around Tower Grove and Benton parks, which are becoming less affordable.

That’s according to data from the city assessor’s office and the census, which Cecilia Boyers, a graduate student at Washington University’s Brown School, analyzed to study the connection between multi-unit conversions and displacement.

She’s working with progressive St. Louis aldermen, who are drafting a bill that aims to keep residents from getting priced out of quickly developing neighborhoods.

Boyers said the problem in St. Louis is that affordability is fragmented across the city.

“There are some neighborhoods that are seeing really naturally strong markets, and you know, everybody wants to move there, everybody wants to develop there,” she said. “And then next door you have a neighborhood that is experiencing severe disinvestment and high rates of poverty.”

Multi-unit conversions, from two-family or four-family to single-family homes, are one sign that a neighborhood is seeing investment and rising property values, said Boyers, adding that it can be a good thing for neighborhoods. But she said the problem is that conversions result in fewer available rental units in an area, which leads to increased rent prices.

She also found that in most cases conversions were tied to indicators of displacement.

“It was very clear that the neighborhoods with the most conversions were definitely also seeing signs of lower-income families moving out and Black families moving out, and higher-income families moving in and white families moving in,” she said.

Where are the most single-family home conversions happening?

St. Louis has lost 341 housing units over the past five years as two-unit buildings have been converted into single-family homes, according to data from the St. Louis Assessor’s Office. About two-thirds of them have occurred in just eight of the city’s 79 neighborhoods:

1. Tower Grove South: 45

2. Tower Grove East: 38

3. Shaw: 32

4. Benton Park West: 29

5. Fox Park: 25

6. Benton Park: 24

7. Dutchtown: 22

8. Gravois Park: 13

All other neighborhoods (total): 113

Source: St. Louis Assessor’s Office

The vast majority of St. Louis neighborhoods are seeing hardly any conversions, Boyers found. Meanwhile, several neighborhoods have conversions in the double digits. The highest number of conversions since 2016 has taken place in Tower Grove South, with 45. However, because the city doesn’t regularly track and update such data, Boyers said that number is likely higher.

Alderwoman Megan Green, who represents the Tower Grove South neighborhood within her 15th Ward, has been hearing more and more from residents who are worried about rising rent prices.

She’s drafting a bill mirroring one passed in Chicago earlier this year that would impose a fee on developers for reducing the number of units when rehabbing a building. Green is still working out the specifics of the bill, but in Chicago, the fee is $5,000 per lost unit.

“I think that fee ends up becoming negligible. I don't expect that this will end up deterring conversions,” she said. “But what it will do is generate needed revenue for affordable housing to support the preservation of naturally affordable housing that is left in these neighborhoods.”

Green said the goal is to funnel that money into a program, potentially the city’s Affordable Housing Trust Fund, that would create more affordable housing for longtime residents in neighborhoods experiencing the most conversions.

Green is still working out the legal aspects of the bill with other progressives who are also seeing high conversions in their wards, including Alderwoman Annie Rice, Ward 8; Alderman Dan Guenther, Ward 9; and Alderwoman Christine Ingrassia, Ward 6.

The aldermen anticipate the bill will need to go to a public vote, which they’re targeting by next summer. Green said they plan to introduce the bill later this legislative session.

Follow Corinne on Twitter: @corinnesusan

Corinne is the economic development reporter at St. Louis Public Radio.