St. Louis multifamily investment guide

Across most of what we have researched, local government reaches an owner through property tax, through land use, and through landlord and tenant regulation. In St. Louis it reaches the tenant’s paycheck directly, as it does in Louisville, and here the mechanism has an expiry date attached that Louisville’s does not.

The City of St. Louis levies an earnings tax. The Collector of Revenue describes it as "the one percent earnings tax," collected from "Residents of the City of St. Louis, regardless of the location of their employer" and from "Employees of businesses located or performing work/services within the City of St. Louis, regardless of where they live."

Read that carefully, because the two limbs do different work. Live in the city and you pay one percent on your earnings no matter where your employer sits. Work in the city and you pay one percent even if you live in the county. The only way a household avoids it entirely is to live and work outside the city line.

Missouri has since closed the door on any other city doing this. Section 92.111.1 of the Revised Statutes provides that "[a]fter December 31, 2011, no city, including any constitutional charter city, shall impose or levy an earnings tax, except a constitutional charter city that imposed or levied an earnings tax on November 2, 2010, may continue to impose the earnings tax." The tax is frozen to the cities that already had it on that date. It cannot spread, and a city that loses it cannot get it back.

And it has to be renewed. Section 92.115.1 requires such a city to submit to its voters, "once every five years," whether to continue the tax. The statute then prescribes the ballot wording exactly: "Shall the earnings tax of ______ %, imposed by the City of ______, be continued for a period of five (5) years commencing January 1 immediately following the date of this election?" If a majority does not approve it, Section 92.111.1 provides the city "shall no longer be authorized to impose or levy such earnings tax except to reduce such tax."

For an investor this is a genuinely unusual risk to have to price, and it cuts both ways. A repeal would remove a large share of the City’s general revenue, which would show up in services, policing and street maintenance long before it showed up in anything an owner controls. Continuation preserves the tax boundary that gives a household a measurable reason to sign a lease on the county side of the line. Either way it is a scheduled event with a known date rather than a diffuse political risk, and we would want to know when the next vote falls before committing to a hold inside the city.

The Missouri assessment rules that also govern this market, the 19 percent residential and 32 percent commercial ratios and the use-based definition that puts an apartment building in the residential class, are set out in our Kansas City guide and apply here without modification.

• One percent, on city residents wherever they work and on non-residents who work in the city.
• Frozen by statute to cities that levied it on November 2, 2010. No new ones.
• Voters must renew it every five years, in ballot language the statute dictates.
• A failed vote removes the tax permanently, subject only to reduction.

The only way a household escapes this tax is to live and work outside the city line. That is a measurable reason to sign a lease on the county side.

The employment data contains the sharpest version of a pattern this series keeps finding, and it is the reason we would not underwrite rent growth here.

Total nonfarm employment across the metro reached 1,430,900 in July 2026, up 0.5 percent over twelve months, on a civilian labor force of 1,509,800. Unemployment held at 3.8 percent.¹

Mining, logging and construction employment grew 14.0 percent, to 92,700. That is the largest single-sector growth we have measured in any market in this coverage, ahead of Columbus at 13.6 percent, which previously held it.¹

So the builders are hiring at fourteen percent into a metro adding half a percent of jobs and losing population in both of its principal counties. We described this in Columbus and Indianapolis as the two blades of a pair of scissors. This is the widest they have been open.

The rest of the composition is soft rather than alarming. Education and health services, the largest sector at 278,900, grew 0.1 percent and trade, transportation and utilities fell 0.1, both effectively flat on large bases. Leisure and hospitality grew 2.1 percent and professional and business services 1.0. On the other side, financial activities fell 5.1 percent on 92,400 jobs, other services 3.8 percent, manufacturing 1.2 and government 0.7.¹

A five percent fall in financial activities is worth noting in a city with a substantial banking and insurance presence, and it is the kind of decline that shows up in downtown office occupancy before it shows up in a rent roll.

• Total nonfarm employment up 0.5 percent.¹
• Construction employment up 14.0 percent, the largest sector growth in our coverage.¹
• Financial activities down 5.1 percent on 92,400 jobs.¹
• Both principal counties are losing population.