The Story of RHID in Topeka: A Tool Meant for Housing, Wrapped in Local Red Tape
At its heart, the Reinvestment Housing Incentive District (RHID) program is a straightforward state-created mechanism under Kansas law (K.S.A. 12-5241 et seq.). It lets cities and counties designate special districts where the incremental increase in property taxes — the extra revenue generated by new or renovated housing above a pre-project baseline — can be captured for up to 25 years. That money reimburses developers for eligible public infrastructure costs: streets, sewers, sidewalks, utilities, and related improvements. No new general taxes are raised; it's pay-as-you-grow financing using only the future growth the project itself creates. The statute requires a housing needs analysis, a redevelopment plan with a comprehensive feasibility study (often developer-supplied with data), public hearings, specific findings by the governing body, and approval by the Kansas Secretary of Commerce. That's the baseline.
Originally called the Rural Housing Incentive District, it targeted smaller communities facing housing shortages where private development struggled with high upfront infrastructure costs. In 2023, Governor Laura Kelly signed Senate Bill 17 (SB 17), effective July 1, 2023. This bipartisan law renamed it "Reinvestment" and expanded eligibility statewide, including to larger cities like Topeka (population ~125,000). The shift recognized that Kansas faced housing shortages everywhere — not just in rural areas — due to post-COVID economics, construction cost inflation, aging stock, and demand for missing-middle and infill housing. For bigger cities, some limits apply (e.g., unit caps per year/project and average size restrictions in certain cases), but the core tool became available for downtown revitalization, workforce housing, and equitable distribution across neighborhoods.
Topeka quickly began using the updated RHID. Yet instead of sticking to the statutory minimum, the city layered on its own stricter local policies through resolutions (e.g., earlier ones like 9379/9452 and updates in 2025 like Resolution 9695 and 9627). These include:
- An explicit "but-for" test: Developers must prove the project would not proceed (or would not meet city housing goals) without the RHID incentive. This involves detailed financial gap analysis, pro formas, internal rate of return (IRR) modeling, and evidence submitted in applications.
- Review by a city RHID committee, often involving outside experts.
- Capitalization rate (cap rate) criteria (added July 2025): The city applies market-derived rates (e.g., ~7.5% for single-family, ~6.5% for multifamily) in modeling to assess project value and needed incentive. Staff can recommend higher cap rates for priority projects (downtown redevelopment, workforce/affordable units, equitable distribution, attached/missing-middle housing) — which can justify larger or longer incentives. The city also reserves some increment for public infrastructure and maintains flexibility to adjust the incentive amount or duration (up to 25 years, but often shorter).
- A non-refundable application fee and potential additional costs borne by developers.
To handle the complex modeling, bond structuring (if used), compliance, and due diligence, Topeka contracts with Columbia Capital Management, specifically Jeff White as a key principal. Columbia serves as the city's longstanding municipal financial advisor for bonds, incentives, and related financings. This adds a professional layer — standard in many municipalities for risk management — but also consultant fees and another step in the process.
Why the Extra Layers? And How Does Topeka Compare?
Topeka frames these additions as prudent: RHID is treated as a need-based program to protect taxpayers, ensure incentives deliver actual new housing (not subsidize what the market would build anyway), align with the city's Housing Needs Analysis/Study (showing thousands of units short, with targets for affordable, workforce, senior, and downtown housing), and manage impacts on other taxing entities like schools and the county. The but-for test, cap rate adjustments, and flexibility are tools to "dial" support for high-priority projects while being conservative elsewhere. Resolution language emphasizes evidence for the but-for principle and public benefits.
Many other Kansas jurisdictions — especially smaller or rural ones handling projects via simple resolutions — stick closer to the statutory minimum. Developers submit feasibility data; the body reviews, makes required findings, and approves without a formalized local but-for policy or mandatory independent gap analysis. Examples include Gardner, Emporia, Hays, Columbus, Eldorado, Lansing (which emphasizes unit-size/rent/duration criteria), and various rural counties/towns for subdivision infrastructure. Larger or high-activity places like Overland Park, Derby, Ottawa, and some counties add but-for or similar guardrails.
No centralized statewide count or tracking exists for who uses what policy variation among Kansas's 105 counties and 627 cities. Comprehensive statistical correlation is impossible due to incomplete data and confounding factors.
Population and prosperity data (U.S. Census 2010–2024 estimates) show no clear link between adopting a strict local but-for test (or extra layers like cap rates/consultants) and better outcomes:
- Fast-growing places like Overland Park (~173k in 2010 to ~203k) and Derby have but-for elements — but so does stagnant or declining Topeka (~127k to ~125k).
- Gardner (lighter process) has boomed explosively as a Johnson County suburb.
- Emporia, Hays, and others with minimal review show flat or modest trends.
- Growth overwhelmingly tracks location: Johnson County/KC metro suburbs thrive due to jobs, proximity, and migration; non-metro areas often struggle regardless of RHID policy nuance. Broader drivers — employment centers, universities, economic trends — dominate over any single administrative choice.
In short, the but-for test and added layers (including Columbia Capital review and 7.5% cap rate baselines with adjustments) function as local governance preferences for accountability, not proven drivers of city-wide success. They add bureaucracy, costs, and delays that some argue discourage development in a city already short on housing supply.
The One Thing That Puts It All Together
Local choice is the thread that binds every piece of this story. State law gives cities wide discretion to implement RHID — from the minimal statutory path (feasibility study + findings) used successfully elsewhere in Kansas, to Topeka's more prescriptive but-for test, cap rate modeling, incentive tweaks, and consultant oversight. The 2023 expansion under Governor Kelly opened the door for urban reinvestment, yet Topeka chose to walk through it with extra guardrails framed as protection but functioning as hurdles.
This isn't defiance of state law; it's an exercise of local power on top of it. The result? A tool designed to unlock housing through incremental tax capture becomes slower, costlier, and more conditional in Topeka than in many peer communities — even as the underlying need (thousands of units short) remains urgent.
The conversation ultimately circles back to a simple question for Topeka's leaders: If other Kansas cities can trust the statute's framework to spur responsible development without the full suite of local overlays, why can't we? Stripping away the non-mandatory but-for test, rigid return modeling, and extra consultant mandates wouldn't eliminate oversight — it would refocus on the core feasibility study, public hearings, and statutory findings. It could accelerate housing delivery, reduce barriers for developers, lower indirect costs, and better match the "reinvestment" spirit of the updated law.
Whether viewed as prudent stewardship or unnecessary bureaucracy, the extra layers remain a policy decision the City Council can revisit and simplify. Residents pushing for change — through public comment, resolutions, or updated guidelines — can remind leaders that growth in Kansas has never hinged on one more analytical test. It hinges on making it easier to build homes where people want to live.
MCRE, LLC
3625 SW 29th Street
Topeka KS 66614
785.383.9994
