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Housing trust funds

What is it?

Housing trust funds (HTFs) are funds established by cities, counties, or states to provide dedicated, ongoing public revenue to support affordable housing. They provide an important source of financing for affordable housing preservation and development, which may not otherwise be reliably funded in a city’s budget. Decent affordable housing is essential to family well-being and community stability — yet most city neighborhoods remain deeply segregated, and people of color face significant barriers to securing safe, quality, affordable homes because of housing discrimination and systematic disinvestment in communities of color.

The goal of safe and affordable homes for all is a complex challenge that will require a range of different approaches and policy tools. HTFs can play a role in comprehensive equitable housing solutions by focusing on projects that provide for long-term affordability and serve very low-income households, people of color, and other historically disadvantaged communities, including those in danger of displacement. Housing affordability is an issue not only in “hot” markets experiencing strong economic growth or those at risk of gentrification, but also in economically distressed communities struggling with high unemployment rates and low wages. HTFs can be leveraged in a variety of contexts, allowing local jurisdictions to maximize the impact of other housing development funds; create new jobs related to housing development; and generate local economic benefits through increased sales taxes, income taxes, and property taxes.

In addition to the PolicyLink resources listed on the right, see the Housing Trust Fund Project at the Center for Community Change and the Housing Development Consortium for more resources on housing trust funds.

Who implements it?

  • Community leaders usually spark the creation of HTFs by demanding that government address critical housing needs. Successful public campaigns often engage a wide range of community members and organizations, including faith-based groups, developers, banks, service providers, unions, and others with an interest in securing more affordable housing.
  • Elected and appointment officials can help develop the framework for an HTF and champion the implementation of local and regional HTFs. These funds are typically administered by a public agency.

Key considerations

An HTF should have clearly stated objectives, a straightforward application process, committed and effective staff, and meaningful public accountability processes.

  • Community priorities: Because HTFs are created using public funds, they should address priority issues for the community, which may change over time. For example, a fund might initially focus on fixing up vacant homes for homeownership opportunities, and later shift to address other needs.
  • Revenue sources: An HTF plan should identify a specific amount of annual dedicated revenue, based on measurable criteria including existing housing needs. Trust funds are often financed by taxes and/or fee increases, and sometimes reduce budget flexibility for elected officials. While HTFs are usually created by legislation or ordinance, some funding sources require a public ballot. Advocates must present a strong case and consider a range of potential funding sources.
  • Target populations: Affordable housing development efforts can be targeted to a number of different groups, for example, low- or very-low-income households, families at risk of homelessness, or moderate-income families with children. Many HTFs encourage mixed-income and mixed-use developments.
  • Building a strong coalition: Advocates should create broad-based coalitions that bring together residents and community-based organizations, policymakers, developers, and other stakeholders to design an HTF plan customized to the opportunities and needs in their city.
  • Administration and oversight: HTFs are usually administered by a lead government agency, with an oversight board that represents a broad range of housing interests within the community. The board should reflect community priorities in establishing trust fund policies, regulations, and funding goals, as well as monitoring and evaluation.
  • Determining eligible uses: Most HTFs provide for a range of uses, such as the acquisition of existing housing stock, new construction, rehabilitation, emergency repairs, housing-related services, adaptive re-use, accessibility modifications, and more. In some cases they may also make dollars available for rental assistance (including emergency assistance), foreclosure prevention, and other pressing needs.

Where is it working?

Across the nation, 552 city HTFs generate more than $385 million annually, along with 57 county HTFs that generate more than $100 million each year.

  • In King County, Washington, the county government collaborated with Bellevue, Kirkland, Redmond, and other cities in King County to create a regional HTF to address a growing housing affordability crisis driven by strong regional economic growth and widening wealth and income gaps. Each participating jurisdiction contributes funds to the HTF and all members receive an equitable distribution of HTF resources. The partnership draws on a range of financing mechanisms and revenue sources, include general funds, federal Community Development Block Grant funds, payments by developers, loan repayments, earned interest, fee waivers, infrastructure improvements, and contributions of land. Since 1993, member cities have  committed more than $42 million to the creation or maintenance of 3,000 units of affordable housing.
  • In 2007, Workforce Housing Trust Funds were established in Albuquerque, New Mexico to provide dedicated funds for the preservation and production of affordable housing. Eligible developments must set aside 30 percent of units for low-income households. In its first four years of operation, the fund supported the development of 11 affordable housing projects that added 402 units to the city’s affordable housing inventory. The Workforce Housing Trust Fund is funded by bonds approved by Albuquerque voters; as of 2015, it had received more than $32 million over four approved bond cycles.