Housing Trust Funds

1
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
• Presented November 9th, 2006 at Marriott Hotel
• Indianapolis, Indiana

2
Housing Trust Funds advancing how we fund
affordable housing

• Securing dedicated sources of public revenue.

• Committing that revenue to support critical
  housing needs.

3
Today there are more than 400 Housing Trust
Funds
4
There are 38 states with housing trust funds
5
States with Enabling Legislation
6
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
7
Administration

• Virtually all housing trust funds are
  administered by staff of a public agency or
  department.

• Most housing trust funds have some kind of
  oversight board.
• They may be either decision-making or advisory
  boards.
• These boards are appointed and have broad
  representation from the affordable housing
  community.

• Administrative costs can be paid from trust
  fund revenues or other public funds.

8
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
9
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.

10
States CommitPublic Revenue Sources
Real estate transfer tax Florida, Hawaii,
Illinois, Maine, Nebraska, Nevada, New Jersey,
South Carolina, Vermont Interest from escrow
accounts Connecticut, Maryland, Minnesota,
Washington, Wisconsin Document recording
fees Delaware, Illinois, Kentucky, Missouri,
Ohio, Washington Lottery earnings Oregon

Interest from Unclaimed, Unnamed Property
Fund Arizona Bond and fee revenues Kansas,
Nevada, New Hampshire Capital budget
funds Washington

11
Dedicated Public Revenues

• 1. Identify a goal--10 million annually for the
  Housing Trust Fund.
• 2. Get an attitude! The revenue is
  theredetermine what is necessary to dedicate it.
  Anyone involved should be 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.

12
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.

13
Florida Passes the William E. Sadowski Act

• Raised the state documentary stamp tax
  (transfer tax on deeds) by ten cents per 100 and
  transferred another ten cents from existing tax.
• State housing trust fund receives 30 of
  revenues local government housing trust fund
  receives 70 SHIP Program.
• Created powerful coalition of all housing
  industry interests in the state.
• Annual revenue 800,000,000
• Leverage 17

Florida housing
14
Ohio Housing Trust Fundis a Work of Dedication

• Twelve year campaign, lead by COHHIO, secures
  recordation fee for states trust fund.
• 50 million annual revenue.
• A majority of the funds serve those earning no
  more than 50 of the area median income.
• In FY2005 home repair of 1,972 units
  supportive services with housing for 5,632
  persons down payment assistance for 289
  households and construction of 977 homes.

15
Illinois Affordable Housing Trust Fund

• Created in 1989 and receives 50 of the states
  real estate transfer tax revenues providing as
  much as 60 million annually.

• Funds new construction and rehabilitation down
  payment/closing cost program owner-occupied
  rehab program and multi-family projects.

16
Missouri Housing Trust Fund

• Created in 1994. Receives document recording
  fee revenue of approximately 4 million each
  year.
• Uses a consolidated application form for the
  Housing Trust Fund, HOME funds, and other MHDC
  fund balances.

• Addresses housing needs of those earning no more
  than 50 of area median income with half of the
  funds serving 25 of ami.
• In FY2004, assisted 121 housing programs.

17
Arizona Housing Trust Fund

• Created in 1988 with revenues from the 35 of the
  states unnamed, unclaimed property fund.
• Since 1998, the Fund has received 55 of the fund
  contingent on the additional funds being
  dedicated to rural areas of the state.

The Fund receives about 20 million annually in
dedicated revenues.
18
California and Iowa Fund Local Housing Trust
Funds

• California voters approve bond initiative that
  includes 25 million for local housing trust
  funds.

Iowa passes legislation committing 800,000 to
local housing trust funds.
Affordable housing in California
19
PennsylvaniaAct 137

• Enables county
• commissioners to double
• recording fees for deeds
• and mortgages.
• At least 85 must be set
• aside in a separate account.
• Funds must be used to support affordable housing
  efforts in the county.
• 15 may be used for administrative costs
  associated with affordable housing.

20
Washington Enables Local Housing Trust Funds

• Washington HB2060 authorizes an increase in the
  document recording fee charged by counties.

• 60 of the funds stay with counties and 40 goes
  into state fund for operating and maintenance
  costs of housing serving very low income persons.
  
• 27 counties have responded

21
Homeless Trust Funds
Homeless trust funds have been created in
Washington, Nebraska, New Jersey, Georgia,
Wisconsin, and counties in Missouri.

• Other housing trust funds commit some resources
  to address the needs of the homeless population.
• Ten year plans to end homelessness are connecting
  to housing trust funds.

22
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.

23
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.
24
Economic Benefits of aColorado Housing Trust Fund

• An investment of 26.5 million would produce
• More than 3,200 new jobs each year.
• More than 334 million of economic activity each
  year.
• Formerly rent-burdened households will have an
  average of 2,460 of annual income per household
  to spend.
• New economic activity will generate more than
  26 million of annual tax revenues.

25
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.

26
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.