Housing trust fund
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Housing trust funds are established sources of funding for affordable housing construction and other related purposes created by governments in the United States (U.S.). Housing Trust Funds (HTF) began as a way of funding affordable housing in the late 1970s. Since then, elected government officials from all levels of government (national, state, county and local) in the U.S. have established housing trust funds to support the construction, acquisition, and preservation of affordable housing and related services to meet the housing needs of low-income households. Ideally, HTFs are funded through dedicated revenues like real estate transfer taxes or document recording fees to ensure a steady stream of funding rather than being dependent on regular budget processes. As of 2016, 400 state, local and county trust funds existed across the U.S.[2]
Funding
Trust Funds are typically funded with a dedicated source of revenue, though they can be funded through general budget allocations. They may also be funded through capital dollars backed by
Sources of funding for State Housing Trust Funds include:
- Unclaimed Property or Lottery Funds
- Interest on Broker, Title or other Real Estate Escrow Accounts
- Document Recording Fees (fees placed on documents recorded with government agencies)
- General Funds
- Government General Obligation (GO) BondRevenues
- Real Estate Conveyance or Transfer Taxes
- State Income Taxes
- Unspent Temporary Assistance for Needy Families Reserves
- Section 8 Reserves
- Fees from Mobile Home Park Owners
- Interest from Budget Stabilization or Surplus Funds
- Interest from Tenant Security Deposits
- Eviction Court Fees
- Penalties On Late Real Estate Excise Taxes (taxes on the purchase price of real estate)
- Origination Fees
Sources of funding for County Housing Trust Funds include:
- Impact Fees
- Inclusionary Zoning In-Lieu Fees (fees paid in-lieu of providing affordable housing in a development)
- General Funds
- Private or FoundationContributions
- Restaurant Taxes
- Government General Obligation (GO) BondRevenues
- Real Estate Transfer Taxes
- Condominium Conversion Fees
- Sales Of County Surplus Land (land purchased by the county that is no longer needed)
- Document Recording Fees
- Sales Taxes
- Developer Proffers (fees paid to make a development more appealing for government approval)
Sources of funding for Local Housing Trust Funds include:
- General Funds
- Capital Improvement Project Funds
- Tax Increment Financing(TIF) Funds
- Impact Fees
- Tobacco Settlement Funds
- Hotel Occupancy Taxes
- Public Benefit Funds
- Government General Obligation (GO) BondRevenues
- Condominium Conversion Fees
- Real Estate Transfer Taxes
- Sales Taxes
- Property Taxes, including dedicated levies
- Housing Excise Taxes
- Inclusionary Zoning In-Lieu Fees
- Disposal Waste Fees
- State Funding Allocations
- Sales of City Surplus Land (land purchased by the city that is no longer needed)
- Parking Garage Proceeds (revenue from city-owned parking garage operation)
- Developer Proffers (fees paid to make a development more appealing for government approval)
- PermitFees
Funding Priorities
Each trust fund has different objectives and goals based on the needs of the local population and
Administration or Governance
Administration or governance rules are established by the authorizing legislation for the trust fund. Typically, they are administered by government agencies often with the oversight of a Board of directors consisting of membership by any of the following: lenders, community members, housing developers, low-income housing advocates, labor unions, or affordable housing residents. The oversight board may have true governing responsibilities or act purely as advisers. The governance strategy is primarily important for determining which projects get funding from the Trust Fund, particularly in a highly competitive jurisdiction.[7] Administering agencies vary for each jurisdiction.[8]
Administering agencies include:
- Housing Authorities
- State, County, or City Executive's Offices
- State Departments of Housing, Community Development, Community Services, Economic Development, or Commerce
- City Departments of Housing, Planning, Human Services, Neighborhood, Community Services, or Economic Development
- County Housing and Community Development Departments
- State Housing Finance Agencies, Corporations, Authorities, or Commissions
- Community Development Corporations
- County or City Housing Commissions
- State Boards of Housing and/or Conservation
- City Housing Resources Boards
- City Housing and Redevelopment Agencies
- City Offices of Housing
- Community Foundations
Types of Housing Trust Funds in the United States
National Housing Trust Fund
In 2008, Congress authorized a National Housing Trust Fund as part of the
On March 27, 2014,
The U.S. Housing and Urban Development (HUD) Department is responsible for administering the National Housing Trust Fund. When funded, states or their designated entities (for example, Housing Finance Commissions) are eligible to receive funding through formula grants based on population and need. States will then distribute funding to project applicants through grants and/or loans. All funded units must maintain affordability for 30 years.[14]
Activities eligible for funding include:
- Property Acquisition
- New Construction
- Reconstruction
- Rehabilitation
- Relocation Expenses
- Financing Expenses
- Operating Expenses (up to 20% of yearly funding)
State Housing Trust Funds
Statewide Housing Trust Funds are a significant source of financing for affordable housing nationwide, with 20% receiving more than $25 million per year in funding and some reaching more than $100 million. Currently, 47 of 50 states in the U.S. have at least one Housing Trust Fund. The most common revenue source is the real estate transfer tax, although many other options exist depending on state laws and political restrictions.[15] That said, five states currently receive no funding even though trust funds exist in statute; Alabama, Arkansas, California, Idaho, and Rhode Island. On average, state trust funds leverage $7.00 in external public and private funding for every dollar of funding.[16] The following are examples of State Housing Trust Funds:
California State Housing Trust Fund
In 1985,
In response, California voters passed Proposition 1C in 2006, the Emergency Shelter Trust Fund Act of 2006. This initiative authorized the state to sell an additional $2.85 billion in capital bonds to fund several types of housing-related programs, including: local infrastructure like sewers, parks, and transportation, homeownership assistance for downpayment support and low-interest loans or grants, low-interest loans for multifamily housing construction or rehabilitation, and loans and grants for homeless shelters and farmworker housing.[18]
Delaware State Housing Development Fund
Established in 1986,
Vermont State Housing & Conservation Trust Fund
Created in 1987,
Washington State Housing Trust Fund
Washington's Housing Trust Fund was established in 1987 by RCW 43.185.030.[21] RCW 43.185.050 authorizes the Trust to fund proposals for new construction, acquisition, and rehabilitation as well as rent or mortgage subsidies, down payment or closing cost assistance for first-time home buyers, or mortgage insurance matching funds, social services for housing residents with special needs, technical assistance, shelters for homeless individuals, and projects making housing more accessible for households with disabilities.[22] More detailed priorities for funding are developed by the Department of Commerce with the assistance of the Affordable Housing Advisory Board, consisting of 22 members primarily appointed by the Governor.[23] Funding targets households earning below 80% of the county's median income and households with special needs, such as physical disabilities or developmental disabilities, and households served by the Departments of Health and Social and Health Services.[24]
By law, the Fund can receive revenue from general revenue appropriated by the Legislature, private contributions, loan repayments, or other sources that the Legislature could establish by law. Currently, the Trust Fund receives revenue earned from the interest on
County Housing Trust Funds in the United States
As of 2009, 131 county housing trust funds existed across the U.S. In thirteen states, 41 county trust funds existed. In addition, 51 county trust funds are in place in Pennsylvania, and 39 county trust funds exist in the state of Washington. These 90 funds were established by state enabling legislation. In 2007, these county trust funds together received approximately $138 million per year in revenues. That year, these Funds leveraged $10.46 in external public and private contributions for every $1 of funding.[28] Most commonly, the revenue for these funds stems from document recording fees.[29]
Napa County, California Affordable Housing Fund
Dade County, Florida Housing Assistance Loan Trust Fund
Dade County established its Housing Trust Fund in 1984 to fund construction and rehabilitation of affordable housing for low-income households (defined by county law as below 80% of median income) and moderate-income households (80-140% of median income). The Trust is funded through a document tax at a rate of $0.45 for every $100.00 connected to the document.[34] Florida law Sections 201.02 and 201.031 authorizes counties to levy the surtax on documents that transfer interest on real property, with an exemption for single-family residences. Since the program's inception, the Trust has assisted more than 7,000 first-time homeowners with low-interest second mortgages, helped construct 15,000 units of affordable rental housing.[35] The Trust funds programs for first or second mortgages, property acquisition for affordable housing cooperatives, or new construction. However, new construction cannot comprise more than 50% of each year's funding allocations. At least 50% of funding must benefit low-income families rather than moderate-income.[36] Since the program's inception, the Trust has assisted more than 7,000 first-time homeowners with low-interest second mortgages, helped construct 15,000 units of affordable rental housing.[37]
Dade County, Florida Homeless Trust Fund
The
Local Government Housing Trust Funds in the United States
The most common source of funding for local housing trust funds come from fees charged for private construction. This includes local
Boston, Massachusetts Housing Trust Fund
In 1983,
Seattle, Washington Housing Trust Fund
Seattle's Housing Fund began in 1981 with voter-approved bond revenues. Since then, Seattle voters have approved and renewed a property tax levy every seven years, four times in total. The latest renewal was approved by Seattle voters in 2009 and authorized a dedicated levy of $145 million over 7 years, or more than $20 million per year. It authorized five programs: capital grants for new construction and preservation of rental housing units, funding for operations & maintenance of existing housing, rental subsidies, assistance for homebuyers, and a loan fund for acquisitions and other related opportunities.[43] More than half of the funding for new construction and preservation is dedicated to serving households that earn less than 30% of the area median income ($18,000 per year for an individual in 2010). The homebuyers program gives low-interest loans for downpayments for first-time homebuyers earning less than 80% of the area median income ($45,100 per year for an individual in 2010). For every $1 invested by the Seattle Levy, approximately $4 is leveraged from external public and private funding.[44]
Regional Housing Trust Funds in the United States
Multi-jurisdictional, or regional, trust funds help cities work together to meet the housing needs of an entire region. This can create peer pressure among jurisdictions to do their "fair share."[45] One regional trust fund, A Regional Coalition for Housing (ARCH) in east King County, Washington, leverages $9 of external public and private funding for every dollar spent. Funding for ARCH is allocated by individual member jurisdictions. Resources may come from Community Development Block Grant (CDBG) dollars, developer fees, or basic General Funds.[46] A Regional Housing Trust Fund also exists for Ohio's Columbus and Franklin Counties and for Sacramento County and City in California. Ohio's Regional Trust also receives funding from General Funds as well as from Hotel/Motel Taxes. Sacramento's Fund is supported by impact fees assessed by the regional redevelopment authority that administers the fund.[47]
Jurisdiction | Administering Agency | Sources of Funding |
---|---|---|
East King County, WA | ARCH (A Regional Coalition for Housing) | CDBG Funds, General Funds, Developer Fees, Loan Repayments |
Columbus/Franklin County, OH | Columbus Housing Trust Corporation | Hotel/Motel Taxes, General Funds |
Sacramento County/City, CA | Sacramento Housing and Redevelopment Agency | Linkage Impact Fees |
References
- ^ Brooks, Mary E. "Housing Trust Fund Project Report 2007" (PDF). Housing Trust Fund Project. Center for Community Change. Retrieved December 15, 2011.
- ^ "Housing Trust Funds" (PDF). AARP Public Policy Institute. February 2017. Retrieved April 4, 2017.
- ^ Schwartz, Alex F. (2010). Housing Policy in the United States (2nd ed.). T & F Books. pp. 220–224.
- ^ United States Department of Housing and Urban Development. "Housing Trust Fund Websites" (PDF). Retrieved December 3, 2011.
- ^ Schwartz, Alex F. (2010). Housing Policy in the United States (2nd ed.). T & F Books. pp. 220–224.
- ^ Center for Community Change. "HTF: Housing Trust Fund Programs". The Housing Trust Fund Project. Archived from the original on April 25, 2012. Retrieved November 19, 2011.
- ^ Schwartz, Alex F. (2010). Housing Policy in the United States (2nd ed.). T & F Books. pp. 220–224.
- ^ United States Department of Housing and Urban Development. "Housing Trust Fund Websites" (PDF). Retrieved December 3, 2011.
- ^ "HUD MAKES $174 MILLION AVAILABLE THROUGH NEW HOUSING TRUST FUND". The Department of Housing and Urban Development. HUD.
- ^ Schwartz, Alex F. (2010). Housing Policy in the United States (2nd ed.). T & F Books. pp. 220–224.
- ^ National Low Income Housing Coalition. "Most Recent Update on the National Housing Trust Fund". National Housing Trust Fund. Archived from the original on December 12, 2006. Retrieved November 19, 2011.
- ^ Siegel, Robert M.; Jeremy C. Sahn; Bilzin Sumberg Baena Price & Axelrod LLP (April 9, 2014). "Recently Unveiled "HOME Forward" Housing Act May Signal the End of Fannie and Freddie". The National Law Review. Retrieved April 16, 2014.
- ^ "H.R Bill _______ 113th Congress 2D Session [Discussion Draft] "Housing Opportunities Move the Economy Forward Act 5 of 2014 or the HOME Forward Act of 2014"" (PDF). Government Printing Office, 2014. Retrieved April 16, 2014.
- ^ U.S. Housing and Urban Development Department (December 2, 2010). "Housing Trust Fund". Archived from the original on October 23, 2011. Retrieved December 3, 2011.
- ^ Schwartz, Alex F. (2010). Housing Policy in the United States (2nd ed.). T & F Books. pp. 220–224.
- ^ Center for Community Change. "HTF: State Housing Trust Funds". The Housing Trust Fund Project. Archived from the original on April 25, 2012. Retrieved November 19, 2011.
- ^ Reid, Carolina (September 2005). "State Housing Trust Funds: Meeting Local Affordable Housing Needs" (PDF). Retrieved November 20, 2011.
- ^ California State Legislative Analyst's Office (November 2006). "Proposition 1C: Housing and Emergency Shelter Trust Fund Act of 2006". Retrieved November 20, 2011.
- ^ Center for Community Change (Summer 2011). "Vermont Supports Housing and Conservation Trust Fund Despite State Budget Gap" (PDF). Housing Trust Fund Project News. Archived from the original (PDF) on April 5, 2012. Retrieved December 5, 2011.
- ^ Center for Community Change (Summer 2011). "Vermont Supports Housing and Conservation Trust Fund Despite State Budget Gap" (PDF). Housing Trust Fund Project News. Archived from the original (PDF) on April 5, 2012. Retrieved December 5, 2011.
- ^ "RCW 43.185.030". Revised Code of Washington.
- ^ "RCW 43.185.050". Revised Code of Washington.
- ^ Washington State Department of Commerce. "Affordable Housing Advisory Board". Housing Boards and Councils. Archived from the original on November 30, 2011.
- ^ Washington State Department of Commerce. "Washington State Housing Trust Fund". Archived from the original on November 21, 2012. Retrieved November 20, 2011.
- ^ "RCW 18.85.285". Revised Code of Washington.
- ^ Washington State Department of Commerce. "Housing Trust Fund Statutory Criteria". HTF Guidelines and Procedures Handbook. Archived from the original on April 24, 2012.
- ^ Washington State Department of Commerce. "HTF Application and Award Information". Archived from the original on March 9, 2012. Retrieved November 20, 2011.
- ^ Center for Community Change. "HTF: County Housing Trust Funds". The Housing Trust Fund Project. Archived from the original on April 25, 2012. Retrieved November 19, 2011.
- ^ Schwartz, Alex F. (2010). Housing Policy in the United States (2nd ed.). T & F Books. pp. 220–224.
- ^ Napa County. "Affordable Housing Fund". Retrieved December 6, 2011.
- ^ Center for Community Change (Winter 2005). "Napa County, California Models City/County Participation in Housing Trust Fund" (PDF). Housing Trust Fund Project News. pp. 8–9. Retrieved December 6, 2011.
- ^ Napa County. "Affordable Housing Fund". Retrieved December 6, 2011.
- ^ Center for Community Change (Winter 2005). "Napa County, California Models City/County Participation in Housing Trust Fund" (PDF). Housing Trust Fund Project News. pp. 8–9. Retrieved December 6, 2011.
- ^ Miami-Dade County. "Section 29-7 Documentary Surtax". Miami-Dade County Code. Retrieved December 6, 2011.
- ^ Miami-Dade County Public Housing and Community Development (August 8, 2011). "Affordable Housing Surtax Program". Archived from the original on August 11, 2011. Retrieved December 6, 2011.
- ^ Miami-Dade County. "Section 29-7 Documentary Surtax". Miami-Dade County Code. Retrieved December 6, 2011.
- ^ Miami-Dade County Public Housing and Community Development (August 8, 2011). "Affordable Housing Surtax Program". Archived from the original on August 11, 2011. Retrieved December 6, 2011.
- ^ Brooks, Mary E. "Housing Trust Funds". Center for Community Change. Retrieved December 6, 2011.
- ^ Miami-Dade County. "Miami-Dade County - Homeless Trust - Accomplishments". Archived from the original on September 27, 2013. Retrieved September 23, 2013.
- ^ Schwartz, Alex F. (2010). Housing Policy in the United States (2nd ed.). T & F Books. pp. 220–224.
- ^ Center for Community Change. "HTF: State Housing Trust Funds". The Housing Trust Fund Project. Archived from the original on April 25, 2012. Retrieved November 19, 2011.
- ^ Neighborhood Housing Trust. "Neighborhood Housing Trust" (PDF). Retrieved December 6, 2011.
- ^ Seattle Office of Housing. "Seattle Housing Levy". Retrieved November 20, 2011.
- ^ City of Seattle Office of Housing (March 2011). "Housing Levy Impact: 2010 Report of Accomplishments" (PDF). Archived from the original (PDF) on November 24, 2011. Retrieved November 19, 2011.
- ^ Center for Community Change. "HTF: State Housing Trust Funds". The Housing Trust Fund Project. Archived from the original on April 25, 2012. Retrieved November 19, 2011.
- ^ A Regional Coalition for Housing. "Other Funding Options". Retrieved November 19, 2011.
- ^ United States Department of Housing and Urban Development. "Housing Trust Fund Websites" (PDF). Retrieved December 3, 2011.