As state Rep. Tom Borroughs noted this week at a housing conference here, Kansas is not on the cutting edge of innovative legislation. Its legislature tends to sit back and learn from the successes and failures of legislation implemented in other states before it acts.

But Borroughs and two other members of the Kansas Legislature who attended the conference admitted that now is the time to act to address housing concerns in the state. Two natural disasters that severely impacted Kansas homes this year have brought the issue to the forefront. One of those natural disasters, a tornado four months ago in Greensburg, virtually wiped out an entire town. Now the governor wants to rebuild the town as a environmentally friendly “green” community, according to Borroughs.

“They can do it bigger and they can do it better,” he said.

But it’s not only natural disasters that are impacting the state’s housing situation. The manmade problem of foreclosures is taking a toll on the state’s housing market. Although the state’s foreclosure rate is relatively low compared to the national average, foreclosure activity has been steadily trending upward over the past couple years, according to RealtyTrac. Kelly Edmiston, Senior Economist in the Community Affairs Department of the Federal Reserve Bank of Kansas City, said in a luncheon address at the conference that the state’s housing market never fully recovered from previous foreclosure surges, making it more susceptible to high foreclosure levels now.

“Kansas foreclosures are not at an all-time high, but they’re close,” he said, pointing to a trend chart showing foreclosure activity in the state over the past few decades.

Edmiston attributed the rising foreclosures to three factors: a greater share of nonprime mortgages, which inherently come with higher default rates; payment shock that comes when non-traditional mortgage products reset to higher monthly payments; and the low amount of equity in many homes. Edmiston provided an eye-opening example of how a monthly mortgage payment on a $200,000 so-called nontraditional loan taken out in August 2004 could increase from about $600 to more than $1500 when it resets three years later.

Edmiston said most of the foreclosure problems in Kansas are in the urban areas — Kansas City, Wichita and Topeka. Using data from RealtyTrac he created heat maps showing foreclosure hot spots in those cities. He noted that the foreclosure hot spots tended to appear in low-income neighborhoods. His foreclosure forecast — which he carefully noted was his own personal opinion and not that of the Federal Reserve — was that foreclosure activity will continue to rise in the near future with a decline possible in 2009. But, he added, that could change depending on “what happens to home prices.”

Burroughs addressed what he called the “subprime” problem, noting noting that he believes much of it stems from lack of education among prospective homeowners.

“I truly believe we need to start in our schools with teaching fiscal responsibility,” he said.

Burroughs and his fellow legislators also touched on other housing issues confronting Kansas: that the cost of building a home in some rural areas is more than what the home can sell for on the market; that the state’s low employment rate translates into a shortage of construction workers and a desire for more legal immigrants to fill this shortage; and that funding available for affordable housing cannot begin to meet the demand for that funding.