Housing Trust Funds

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Housing Trust Funds

• Mary E. Brooks
• Housing Trust Fund Project
• Center for Community Change
• 1113 Cougar Court
• Frazier Park, CA 93225
• 661-245-0318
• mbrooks_at_communitychange.org

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Housing Trust Funds advancing how we fund
affordable housing

• Securing dedicated sources of public revenue.

• Committing that revenue to support critical
  housing needs.

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Today there are more than 400 Housing Trust
Funds
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State housing trust funds
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States with Enabling Legislation
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Local housing trust funds
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1
1
4
75
1
41
17
161
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3
1
2
2
5
29
4
4
2
2
1
1
1
2
2
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How Housing Trust Funds Work
Legislation or Ordinance
Establishes the Housing Trust Fund
Administration Agency or Department Oversight
Board
Dedicated Revenue Sources Taxes or Fees Program
Generated Revenue Interest Earned Other Revenues
Programs Distribution of Funds Program
Requirements Eligible Applicants Eligible Uses
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Administration

• Virtually all housing trust funds are
  administered by staff of a public agency or
  department.
• Staff are responsible for day to day
  operations of the fund assisting the Board
  preparation of program materials technical
  assistance to potential applicants initial
  review of applications monitoring project
  compliance etc.
• Administrative costs are paid for either from
  housing trust fund revenues or other departmental
  funds.

• Most housing trust funds have some kind of
  oversight board.
• They may be either decision-making or advisory
  boards.
• They develop program guidelines manage funds
  approve funding awards and conduct annual
  evaluation reports.
• These boards are appointed and have broad
  representation from the affordable housing
  community.

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Programs

• Funds are awarded either through a request for
  proposal process a notification of funding
  availability or direct funding of specific
  programs.
• Funds are available either as grants or loans
  and/or other sources of financing.
• The application process may be combined with
  other available sources of affordable housing
  funds, such as HOME, CDBG, etc.

We Need the People Who Need Affordable Housing
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Program Requirements

• Eligible Applicants nonprofit developers,
  for-profit developers, housing authorities,
  governments, Native American tribes, etc.
• Eligible Uses acquisition, new construction,
  rehabilitation, predevelopment costs, housing
  related services, operating costs, capacity
  building, rental assistance, foreclosure
  assistance, etc.

• Application Requirements income targeting to
  control who benefits, long term affordability,
  accessibility, leveraging, etc.

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Dedicated Public Revenues

• 1. Identify a goal--10 million annually for the
  Metro Louisville Housing Trust Fund.
• 2. Get an attitude! The revenue is
  theredetermine what is necessary to dedicate it.
  No one should be on the Task Force who is not
  willing to explore every source.
• Identify all possibilities. Check out what
  others have done.
• Consider different approaches increasing a
  revenue source dedicating existing revenues or
  committing the growth in revenues
• Select your best options.

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Why Dedicate Public Revenues to Affordable Housing

• Affordable housing is fundamental to the health
  of any city.
• The private market cannot respond to homes that
  require subsidies.
• Affordable housing needs are constant as long as
  wages continue to lag behind.
• Affordable housing requires long-term planning
  and investment.

• Affordable housing cannot be dependent on budget
  surpluses.

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Cities and Counties CommitPublic Revenue Sources
County Deed Tax (real estate transfer tax)
Dade County, Florida Howard County,
Maryland Aspen, Colorado Washington,
D.C. Building Permit Fees Bainbridge
Island, Washington Motor Vehicle Rental Usage
Tax Tax Increment Financing Berkeley,
California Los Angeles, California
Portland, Oregon Condominium Conversion Fee
Long Beach, California Los Angeles,
California Montgomery County,
Maryland Dilapidated Housing Fee Hotel/Motel Tax
Long Beach, California Los Angeles,
California Delinquent Property Taxes Occupancy
Tax and Business Tax
Impact Fee Common in California
Cambridge, Massachusetts Boston,
Massachusetts Alexandria, Virginia
Fairfax County, Virginia Property Tax
Boulder, Colorado Greensboro, North
Carolina Burlington, Vermont Seattle,
Washington
Sales Tax St. Paul, Minnesota Sale of City
Owned Land Montgomery County, Maryland
Ramsey County, Minnesota Boulder,
Colorado
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Milwaukee Task Force Report

• Available to the City
• Tax Increment District funds
• Citys Bonding Authority
• Fee or Surcharge on Downtown Parking Spaces
• Proceeds from the Sale of City Land
• Portion of Bingo Casino Revenues
• Revenues from Franchise Agreements on Fiber
  Networks (unlikely)
• Revenues from City leased land

Available to the City with State Legislation
Developer Impact Fees Real Estate Transfer
Tax Surcharge on Tickets for Entertainment
Events Hotel/Motel Tax Income Tax
Credit for Contributions
The City found 70 million to fix their house
Now what about our houses?
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Chicago Creates Low Income Housing Trust Fund

• All funding supports households earning 30 of
  area median income or less.

A majority of the funds provide rental assistance.
Funds also support homeless initiatives and
essential services.
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Chicago Low-Income Housing Trust Fund

• The Fund supports four programs
• Rental Subsidy Programannual subsidies to reduce
  rents for some units in a building.
• Families First Initiativewrap-around social
  services and permanent housing leading to
  self-sufficiency.
• Affordable Rents for Chicagointerest-free
  forgivable loan to replace private funding used
  to reduce rents of very low income tenants.
• Supportive Housing Program for the Continuum of
  Carerental assistance and package of supportive
  services for homeless.

• In 2004, the Fund provided more than 10 million
  to assist 2,000 low-income households.

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Chicago Low Income Housing Trust Fund

• 15 member Board of Directors is appointed by the
  Mayor. Represents city government, nonprofit
  organizations, private corporations, and city
  residents. The Board manages the Fund.
• Staffed through the Department of Housing.

• Awards approximately 10 million a year from
  city corporate funds and other sources.

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St. Louis Voters Approve Affordable Housing Trust
Fund

• 58 of the voters approved use tax for housing
  trust fund and a health trust fund.
• The Commission provides grants and loans to
  non-profit agencies and developers that provide
  housing related services or construction/rehab
  housing for city residents.

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St. Louis Affordable Housing Trust Fund

• The mission is "To promote City living and
  neighborhood stabilization through the
  preservation of affordable, accessible housing
  and support services that enhance the quality of
  life for those in need."
• The staff an executive director, senior housing
  analyst, administrative assistant, and accounting
  clerk.
• The Commission 11 members appointed by the
  Mayor.

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St. Louis Affordable Housing Trust Fund
40 of the funds must serve households earning no
more than 20 of the area median income.

• Awards 4-5 million each year. In 2005
• Accessibility modifications 160,000
• Education/Training 260,000
• Rent/Mortgage/Utility aid 471,000
• Home Repair 628,000
• Homeless Prevention/shelter 1,270,000
• Rehab/renovations/lead abatement 143,000
• Rent/mortgage/utility subsidy 638,000
• Transitional housing 1,006,000

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Seattle Advocates Win Housing Levy for 4th Time

• 54 of Seattle voters approved continuation of
  property tax support for affordable housing.
• The new 2002 levy will produce 2,000 affordable
  homes.
• Provides 86 million over the next seven years.

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Seattle 2002 Housing Levy

• Rental Preservation Production
• 56.1 m 1522 units
• Homeownership
• 7.8 m 326 units
• Neighborhood Housing Opportunity Program
• 7.2 m 196 units
• Rental Assistance
• 2.8 m 500 households
• Operation Maintenance
• 7.8 m
• Administration
• 4.5 m
• TOTAL 86.0 m 2,044 units

The Levy costs the average homeowner about 49 a
year.
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Seattle Housing Levy Program

• Administered by the Seattle Office of Housing.
• Levy Oversight Committee is appointed by City
  Council with representation from civic leaders
  and concerned citizens.
• Citizens Advisory Committee is formed by the
  Office of Housing, with advice from key
  stakeholders such as housing advocates and
  neighborhood groups.

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Philadelphia Housing Trust Fund

• State legislation enabled the city/county to
  increase its document recording fee.
• 15 million annually expected.
• One half of the funds are committed to those that
  earn no more than 30 of the area median income.
• Specific targets are established for
  accessibility and visitability.
• 65 of the funds are to support new construction
  30 to preservation and 5 to homeless
  prevention.

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Philadelphia Housing Trust Fund

• 6 million was awarded in its first round of
  funding supporting 465 units of affordable
  housing.

• The Trust Fund Oversight Board has eight
  appointmentsfour are community representatives.
• A report by Econsult Corporation identified 85
  million of economic impact on Philadelphia each
  year from the Housing Trust Fund.

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Indianapolis Housing Trust Fund

• State authorized housing trust fund in 2000.
• In 2004, Mayor Bart Peterson promised 2 million.
• In 2006, fees from electronic filing of property
  sales disclosure forms were committed to the
  fund.
• Mayor Peterson calls this a first step.

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Indianapolis Housing Trust Fund

• An 11-member housing trust fund advisory
  committee, appointed by the Mayor, oversees
  operation of the trust fund.
• The Fund is staffed by the Department of
  Metropolitan Development.

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Indianapolis Housing Trust Fund

• The Fund provides financial assistance to rent or
  purchase a home for the development or
  rehabilitation of housing administrative costs
  of the fund and technical assistance to
  nonprofits.
• The Committee makes recommendations on funding,
  approved by the Metropolitan Development
  Commission and Council.

At least half of the funds must serve those
earning no more than 50 of the area median
income.
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Indianapolis Housing Trust Fund

• In 2005, the Fund awarded 300,000 in grants to
  three local organizations. Each received a
  matching grant from the Central Indiana Community
  Foundation.
• These funds will assist more than 100 families in
  housing crisis.

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Columbus/Franklin CountyAffordable Housing Trust

• Created in 2001 with a commitment of hotel/motel
  tax from the City. A year later, the County
  added funds. In 2005, the County increased its
  real estate transfer tax and committed the
  increase to the fund.
• The Fund is established as a nonprofit
  corporation with an 11-member Board of Trustees.

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Columbus/Franklin County Affordable Housing Trust
The Fund has committed more than 14.5 million,
helping to provide some 1,550 homes.
For each housing trust dollar committed, another
11.50 is leveraged in other public and private
dollars. The Fund anticipates receiving 4
million each year from City and County revenues.
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Housing trust funds give affordable housing a new
face

• Recognize that the most critical housing needs
  must be addressed.
• Incorporate sustainable housing principles
  accessibility, long-term affordability, green
  housing.

• Leverage funding (15-10) bringing in
  additional resources to Louisville.

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Housing is good for the Economy

• The argument shifts

Lee County, Florida documented that the need for
more affordable housing costs the County more
than 249 million annually!

• The economic impact of Philadelphias trust fund
  is expected to reach
• Nearly 2,600 jobs statewide each year.
• 80 million in wages every year.
• Increased city and state taxes.

NAHB documents 1,000 multi-family homes generates
1,000 full time jobs, 33.5 million in wages,
and 17.8 million in tax revenues and fees.
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Housing is Good for Communities

• Education
• Higher school-mobility rates affect the entire
  system and cause the most harm to children whose
  families have low incomes.
• Housing instability can have a direct impact on
  a childs education.
• Frequent moves can have a negative effect on
  school achievement.

• Health
• Pest infestation is known to cause asthma.
• Substandard electrical problems are a danger to
  children.
• Lead poisoning leads to a decrease in IQs.
• Children living in inadequate housing have
  increased hospitalizations and respiratory
  infections.

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Housing is Essential to Businesses

• Businesses locate where housing is available for
  employees.
• Families want to live near where they work.
• Neighborhood revitalization follows housing
  improvements.
• City and essential service employees need
  affordable housing.

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The Sustainability of Housing Trust Funds

• An on-going government commitment of public
  funds.
• A community-based process to create and sustain
  the fund.
• A component of housing policy that drives
  innovation and cooperation.
• A flexible model that can adapt to changing
  market conditions.