Senator Jack Reed (D-R.I.) plans to introduce a bill this fall to establish a national housing trust fund that would set aside federal funds to help close the growing gap between the demand for affordable housing and available units.
The new proposal, whose details are still being worked out, would come on the heels of two attempts that were held up last year, one in the House of Representatives and one in the Senate. Both proposals, H.R. 1102 and S. 1411, received widespread bi-partisan support, including 200 co-sponsors on the House bill.
One of the top agenda items for housing advocates, the national trust fund, like local trust funds, would be used for affordable housing development. The money could be used for a variety of development activities, including real property acquisition, site development, new construction, and rehabilitation of dilapidated buildings.
The funds could also be used to leverage additional public and private dollars. For every dollar allocated, an additional $5 to $10 can be gained from public and private sources, according to the Coalition for Nonprofit Housing and Economic Development.
Because they are funded from a dedicated source of public revenue, advocates promote trust funds as one of the most stable and reliable tools for community development.
They are funded from a district, ongoing form of public revenue, which can vary from fund to fund. Unlike some other public sources of housing dollars, they can avoid budget cuts stemming from annual shortfalls or political pressure.
In effect, they are “untouchable” unless a change is made to the original legislation establishing them.
It is difficult to trace the push, for a national housing trust fund to a signal event. However, according to a recent article in the Journal for Affordable Housing, one of the driving forces was a 1991 Department of Housing and Urban Development (HUD) study that concluded many low-income households were forced to pay an extremely high percentage of their income on housing costs.
Soon after the HUD study, the first proposal for a national housing trust fund was introduced, calling for $25 billion per year. The Federal Housing trust Fund acts of 1994 and 1995 followed soon after, although they received little support.
By the late 1990s, hope for a national housing trust fund was dwindling, as housing advocates found more immediate issues to focus on.
It was not until Senator John Kerry (D-Mass.) introduced his national Affordable Housing Trust Fund Act of 2000 that the push for a national housing trust fund regained momentum.
Since that time, the campaign has achieved a great deal of support and attention. Currently, the National Low Income Housing Coalition is leading efforts to establish a national housing trust fund with the goal building and preserving 1.5 million units of rental housing for low-income families over the next decade. But while the struggle for a national housing trust fund is getting welcome new attention, challenges remain for the 280 city, county, and state housing trust funds that now exist throughout the United States—notably the local housing trust fund here in Washington D.C.
Anyone who pays rent in D.C. understands the city’s shortage of affordable housing. According to Robert Pohlman, executive director of the Coalition for Nonprofit Housing and Economic Development, “55,000 households pay more than 35 percent of their income on housing…that’s over 100,000 people.”
As an initial step to help remedy this situation, D.C.’s Housing Production Trust Fund (HPTF), which is administered through the Department of Housing and Community Development, provides “a flexible source of money that the city can direct towards its housing needs,” said Pohlman.
The HPTF receives its revenue from 15% of deed recordation and transfer tax revenues. It adds up quickly: total funding for fiscal year 2004 was $21.5 million.
However, D.C.’s Housing Production Trust Fund has not been without controversy. The trust fund was created in 1989, but did not receive a dedicated funding source until Mayor Anthony Williams signed the Housing Act of 2002.
And despite its passage, the HPTF has been threatened numerous times. “Last year the mayor proposed $12 million when [funding] should have been $21.5 million,” said Pohlman.
The proposed reduction, made possibly by temporarily amending the Housing Act of 2002, failed after numerous community members and several city council members cried foul.
The Coalition for Nonprofit housing and Economic Development is working to ensure Mayor Williams does not cut HPTF funding in the future.
