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Center for Community Change

Center for Community Change. Housing Trust Funds. 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@communitychange.org www.communitychange.org.

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Center for Community Change

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  1. Center for Community Change Housing Trust Funds 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@communitychange.org www.communitychange.org

  2. Securing dedicated sources of public revenue. Committing that revenue to support critical housing needs. Housing Trust Funds:… advancing how we fund affordable housing

  3. Today … there are some 700 housing trust funds

  4. States with housing trust funds

  5. Recent HTFund Advances • Pennsylvania established a HTF in 2010, secured ongoing funding in 2012. • North Dakota established a Housing Incentive Fund in 2011, raising $7.6 million. • Virginia used $7 million in National Mortgage Settlement funds to initiate a state housing trust fund. • Alabama established a HTFund in 2012 without funding. • Colorado established a HTFund in 2012 with $13.2 million from the National Mortgage Settlement. 5 states establish housing trust funds

  6. State Housing Trust Fund Impacts • Virtually every housing trust fund can account for economic impacts. • A recent study in Ohio, concluded that between 2006 and 2009, the Ohio Housing Trust Fund fueled Ohio’s economy by an estimated $2.6 billion with associated earnings of more than $829 million for almost 32,000 workers • Tennessee estimates that its $4 million investment in affordable housing has been a magnate for $56.5 million in economic impact throughout the state.

  7. An Indiana study concluded that $20 million invested by the state fund has leveraged more than $90 million in other funds, generated 1,600 new jobs, resulting in $52 million in new wages, and has created nearly $83 million in income for other industries. • Colorado estimates that 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. An Investment in Colorado’s Future

  8. What it Means to Leverage Funds From our 2007 survey of housing trust funds: State housing trust funds $1.00 : $7.00 additional funds City housing trust funds $1.00 : $6.50 County housing trust funds $1.00 : $10.50 An example from Nebraska: NDED HTFund Grant $185,000 NDED CDBG Grant $315,000 Loan Pool $325,000 NeighborWorks $287,655 NED, Inc. $100,000 City of Columbus $60,100 NIFA $11,000 Lot Sales $832,500 Total $2,166,005

  9. 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

  10. 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. • These boards are appointed and have broad representation from the affordable housing community. • They may be either decision- making or advisory boards. • Administrative costs can be paid from trust fund revenues or other public funds.

  11. 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.

  12. 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.

  13. States CommitPublic Revenue Sources • Real estate transfer tax • Florida, Hawaii, Illinois, Iowa, Maine, Nebraska, Nevada, New Jersey, South Carolina, Vermont • Interest from escrow accounts • Connecticut, Maryland, Minnesota, Washington, Wisconsin • Document recording fees • Connecticut, Delaware, Illinois, Kentucky, Missouri, Ohio, Oregon, Washington • Tobacco tax • Indiana • Interest from Unclaimed, Unnamed Property Fund • Arizona • Bond and fee revenues • Kansas, Nevada, • New Hampshire • Capital budget funds • Washington

  14. Why Dedicate Public Revenues to Affordable Housing • Affordable housing is fundamental to the health of any jurisdiction. • The private market cannot respond to homes that require subsidies. No source of private funding—foundation or corporation—will sustain investment in the production and preservation of affordable housing. • Affordable housing is part of our communities—we will always be planning and providing for those in need and keeping our neighborhoods vibrant and stable. • Investing in affordable housing is good fiscal policy.

  15. Kentucky Affordable Housing Trust Fund • The Fund has provided more than $65 million since 1994. • Administered by the KY Housing Corporation. • Created 8,273 units of affordable housing—rental and homeownership. • Average per-unit subsidy of $7,974. • Leveraged more than $234 million in other funds. • Kentuckians have been served in almost every county in the state. Funds are dedicated from an increase in fees on new mortgages, recorded deeds, and 21 additional instruments recorded by County clerks.

  16. Nebraska Affordable Housing Trust Fund Both Funds receive documentary stamp tax revenues. The AHTFund is administered by the Department of Economic Development. • Nebraska has an Affordable Housing Trust Fund and a Homeless Assistance Trust Fund. • Since the NAHTF began in 1998, it has: • Awarded $87,943,511 • Leveraged $300,486,047 • Created 4,765 housing units • Created 6,301 jobs

  17. Illinois Affordable Housing Trust Fund • Created in 1989 and receives 50% of the state’s real estate transfer tax revenues providing as much as $60 million annually. • The Fund is administered by the Illinois Housing Development Authority and distributed to regions by a formula. • Funds new construction and rehabilitation; down payment/closing cost program; owner-occupied rehab and multi-family projects.

  18. Ohio Housing Trust Fund Dedicates the recordation fee for state’s trust fund, capped at $50 million annual revenue. A majority of the funds serve those earning no more than 50% of the area median income. In Fiscal Year 2010, the Ohio Housing Trust Fund awarded nearly $29.5 million with these key accomplishments: • Supportive services provided to 1,363 households; • Down payment assistance and homebuyer counseling for 60 households; • Construction, rehabilitation and repair of 1,217 rental and 832 owner homes; • Homeless prevention provided to 1,122 households; • Business assistance provided to 56 businesses; • Training and technical assistance given to 8,553 households; and • Senior service coordination provided to 924 persons.

  19. Iowa Housing Trust Fund • State dedicates real estate transfer tax revenues to the fund. • Local Housing Trust Fund Account receives 60% of the funds. • Project Based Housing Account may use 40% of the funds in areas where no local housing trust fund exists. • Administered by the Iowa Finance Authority. In 2011 the Housing Trust Fund Program had nearly $6 million available. 24 local housing trust funds have been created throughout the state.

  20. Housing Trust Fund Disaster Relief Biloxi, Mississippi • Texas Housing Trust Fund: Disaster Recovery Homeowner Repair Gap Financing Program: up to $10,000 per household. • Nebraska Affordable Housing Trust Fund: up to $7,500 for individual home repairs. In addition, organizations were supported for providing assistance in selected counties. • Florida Housing Trust Fund: enables set-aside of funds to provide funding where a state of emergency has been declared.

  21. Moving the Process Forward Options others have taken: • Initial capitalization: • National Mortgage Settlement dollars • Other options. • Long term dedicated funding: • Conduct your own study. • Work with Housing Mississippi. • Build a compelling program: • Demands immediate funding. • Has a dramatic impact right away.

  22. The National Housing Trust Fund • The National Housing Trust Fund was created as part of the Housing and Economic Recovery Act of 2008. • It will be administered by HUD and funds will go, by formula, to a designated state agency. • A bill will be introduced this spring to modify MID, creating a tax credit, and generating dedicated revenue for the NHTFund.

  23. The Housing Trust Fund Project Sign up for our Quarterly Newsletter: www.housingtrustfundproject.org Contact: Mary Brooks mbrooks@communitychange.org

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