Need more affordable housing? Fund housing trust funds, expert says

Need more affordable housing? Fund housing trust funds, expert says

(Ravell Call, Deseret News, File)


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SALT LAKE CITY — Need more affordable housing? There's a solution for that.

That solution is housing trusts with dedicated revenue streams, Michael Anderson of the national nonprofit Center for Community Change said in a meeting with Utah advocates and government officials Wednesday.

Anderson, director of the center's National Housing Trust Fund Project, said states and municipalities are using a wide variety of funding mechanisms to establish and and strengthen housing trusts that dedicate public money to creating or preserving affordable housing for people with the lowest incomes.

Some states bond for this purpose. Indiana imposes a tax on smokeless tobacco. Fourteen states and the District of Columbia levy a real estate transfer tax, while seven states collect a document filing fee.

Utah is among about a dozen states that fund their respective state housing trusts through state general fund appropriations, a funding stream that can fluctuate with economic conditions and political whim, advocates say.

"I think the challenge for the Olene Walker Housing Trust Fund is, where the state has stepped up periodically to make allocations, it hasn't been consistent. It hasn't been something you can literally bank on, I mean that for the developers," he said.

Agreements to develop affordable housing are complex and often multi-year deals, Anderson said.

"The advantage that you have when you're sitting down putting together those deals, when you can say, 'We know this gap financing is going to be here in 2 ½ years when we put our whole deal together and come on line' is huge.

"The states that have housing trust funds you best believe are in pole position to compete for federal tax credits, for other federal programs, for private philanthropy and other private resources. There's no question that when we look at what states report as leveraging, what they bring in, for every state dollar they bring in four other dollars into the state to develop affordable housing," he said.

Some of the most consistent funding streams for housing trusts are tied to real estate transfer taxes or document filing fees, Anderson said.

In Oregon, a document filing fee was established to fund the state's housing trust. A $5 increase to the fee, specifically to address veterans homelessness, passed the Oregon Legislature with overwhelming bipartisan support, Anderson said.

But those approaches are unlikely to be utilized in Utah because the real estate industry would likely oppose new fees attached to transactions, said Jonathan Hardy, director of the Division of Housing and Community Development.

Anderson acknowledged the political challenges of establishing funding streams but said, "You're not alone at all."

In some states, such as Maine, voters passed a $15 million bond for the construction of new homes and renovations of existing homes for low-income seniors.

Often times the public is more empathetic to the challenges of average families than elected leaders, Anderson said.

That's not surprising considering a national public opinion poll commissioned by the McArthur Foundation found that 55 percent of respondents made at least one sacrifice to cover their housing costs, which included taking a second job, deferring retirement savings, amassing credit card debt or moving to a neighborhood that is less safe or has inferior schools, he said.

"The public gets this issue more than elected officials," he said.

Funding housing trusts "isn't rocket science," according to Anderson.

"This is, 'We have a problem. If we want to solve it, it costs money.' There are plenty of solutions that have been demonstrated and proven to work. It’s getting off the dime and putting public money into what we know needs to be done."

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