Create or Expand Dedicated Housing Trust Funds
Goal: Increase the Availability of Affordable Homes
Role: Generate Capital
Policy: Create or Expand Dedicated Housing Trust Funds
What are Housing Trust Funds?
Housing trust funds are separate funds established by states or localities to provide a stable source of revenue reserved solely for affordable homes. Because they are created at the state or local level, program activities and eligibility requirements vary from place to place in response to local needs and priorities.
Housing trust funds can be funded in a variety of different ways. Those associated with a dedicated funding source - i.e., a stable source of revenue that will continue to provide resources on an ongoing basis without the need for annual appropriations are known as dedicated housing trust funds. Such funds represent a stable and effective way of ensuring consistent long term financing for affordable housing needs in a community. However, even these funds are subject to instability as many are tied to real estate taxes, fees and revenues from other economic activity. An economic downturn may reduce these revenues and thus the funding of the dedicated housing trust funds. The funds may also be subject to having their funds diverted for non-housing purposes through the political process.
Housing trust funds can also be funded through direct appropriations or other sources of revenue that are not dedicated on an ongoing basis. These funds are obviously less stable than dedicated housing trust funds and are often subject to the annual appropriations process, which is affected by the overall economic conditions of the community. While these programs do not benefit from the reliable funding conferred by a dedicated source, they still play an important role in addressing local housing needs.
A benefit of housing trust funds is that they can be a reliable funding mechanism to meet community affordable housing needs when other sources of public funding for affordable housing may be limited, such as during an economic downturn. A survey of state housing trust funds reported that between 2009-2010, at least 24 percent of states maintained stable funding for their trust fund and 25 percent of states with trust funds experienced consistent or increased funding revenues [1]. For example, the State of Oregon passed the Housing Opportunity Bill in 2009 to establish a dedicated funding source for their housing trust fund which was achieved by increasing the document recording fee on real estate related documents by $15. [2]
The impetus for housing trust funds varies. In many communities, the creation of housing trust funds result from persistent advocacy campaigns by low-income housing advocates and practitioners who seek to target funds to the lowest income families with the most severe housing cost burdens. In other communities, such as the state of Florida, housing trust funds are advanced by a broader coalition of interest groups, including low-income advocates, realtors and homebuilders.
Communities interested in developing comprehensive and effective housing strategies should consider how a housing trust fund fits into the overall array of housing programs and policies available in the community.
[1] 2010 Survey: State Housing Trust Funds. [PDF]. Mary Brooks. Washington, DC: Center for Community Change, 2010.
[2] 2009-2010 Assets & Oppportunity Score Card. Resource Guide: Housing Trust Funds. Washington, DC: CFED
The Center for Housing Policy gratefully acknowledges the input and feedback provided for this policy section by the follwing reviewers: Danielle Arigoni, U.S. Environmental Protection Agency; Mary Brooks, Center for Community Change; Isaac Salazar, Enterprise Community Partners. Please note, however, that the views and opinions expressed on HousingPolicy.org are those of the Center for Housing Policy alone.
Role: Generate Capital
Policy: Create or Expand Dedicated Housing Trust Funds
What are Housing Trust Funds?
Housing trust funds are separate funds established by states or localities to provide a stable source of revenue reserved solely for affordable homes. Because they are created at the state or local level, program activities and eligibility requirements vary from place to place in response to local needs and priorities.
Housing trust funds can be funded in a variety of different ways. Those associated with a dedicated funding source - i.e., a stable source of revenue that will continue to provide resources on an ongoing basis without the need for annual appropriations are known as dedicated housing trust funds. Such funds represent a stable and effective way of ensuring consistent long term financing for affordable housing needs in a community. However, even these funds are subject to instability as many are tied to real estate taxes, fees and revenues from other economic activity. An economic downturn may reduce these revenues and thus the funding of the dedicated housing trust funds. The funds may also be subject to having their funds diverted for non-housing purposes through the political process.
Housing trust funds can also be funded through direct appropriations or other sources of revenue that are not dedicated on an ongoing basis. These funds are obviously less stable than dedicated housing trust funds and are often subject to the annual appropriations process, which is affected by the overall economic conditions of the community. While these programs do not benefit from the reliable funding conferred by a dedicated source, they still play an important role in addressing local housing needs.
| What problems do housing trust funds solve? Housing trust funds help solve three major problems. First, they provide a dependable source of revenue for the production, preservation, or rehabilitation of rental and owned homes, as well as related support services and infrastructure needs. Second, they come without federal restrictions and can be tailored to efficiently meet particular local needs, some of which may be ineligible for funding through other programs or in need of additional resources. Third, they can be used to leverage other funds to help close the gap between the cost of production and available funds to support affordable housing. Where are these policies most applicable? Housing trust funds can be used successfully in more or less any community because states or localities can control exactly how the funds are spent and they do not come with federal restrictions. Housing trust funds are most productive when funding sources are tailored to reflect local conditions. Areas with an active real estate market, for example, may consider funding a housing trust fund through real estate transfer taxes or a modest document recording fee that generates a small amount of income with each home sale. Areas with weaker housing markets but robust tourism may consider hotel/motel taxes as a revenue source. During an economic downturn, funding sources tied to economic activity or real estate development may generate less revenue. In response, many communities have turned to alternative sources like document recording fees collected from birth certificates, deeds of trust, and marriage licenses, general obligation bonds, or public purpose charges linked to utility fees to support housing trust funds. (These small amounts can add up!) | Solutions in Action |
 Photo credit: Greig Cranna, courtesy of MassHousing Treehouse at Easthampton Meadow, in Easthampton, Massachusetts, was financed in part by a $1 million award from the Massachusetts Affordable Housing Trust Fund. This 46-acre development provides a unique intergenerational environment for both seniors and families with children. Visit the Gallery to learn more about Treehouse at Easthampton Meadow and other developments made possible through housing trust funds. |
A benefit of housing trust funds is that they can be a reliable funding mechanism to meet community affordable housing needs when other sources of public funding for affordable housing may be limited, such as during an economic downturn. A survey of state housing trust funds reported that between 2009-2010, at least 24 percent of states maintained stable funding for their trust fund and 25 percent of states with trust funds experienced consistent or increased funding revenues [1]. For example, the State of Oregon passed the Housing Opportunity Bill in 2009 to establish a dedicated funding source for their housing trust fund which was achieved by increasing the document recording fee on real estate related documents by $15. [2]
The impetus for housing trust funds varies. In many communities, the creation of housing trust funds result from persistent advocacy campaigns by low-income housing advocates and practitioners who seek to target funds to the lowest income families with the most severe housing cost burdens. In other communities, such as the state of Florida, housing trust funds are advanced by a broader coalition of interest groups, including low-income advocates, realtors and homebuilders.
Communities interested in developing comprehensive and effective housing strategies should consider how a housing trust fund fits into the overall array of housing programs and policies available in the community.
 Learn more about dedicated housing trust funds Go back to learn about other policies that help generate capital |
[1] 2010 Survey: State Housing Trust Funds. [PDF]. Mary Brooks. Washington, DC: Center for Community Change, 2010.
[2] 2009-2010 Assets & Oppportunity Score Card. Resource Guide: Housing Trust Funds. Washington, DC: CFED
The Center for Housing Policy gratefully acknowledges the input and feedback provided for this policy section by the follwing reviewers: Danielle Arigoni, U.S. Environmental Protection Agency; Mary Brooks, Center for Community Change; Isaac Salazar, Enterprise Community Partners. Please note, however, that the views and opinions expressed on HousingPolicy.org are those of the Center for Housing Policy alone.
Goal: Increase the Availability of Affordable Homes
Role: Generate Capital
Policy: Create or Expand Dedicated Housing Trust Funds
How do trust funds work?
Housing trust funds allow state and local governments to establish a specific source of state or locally-raised funding that can only be used for affordable homes. As of December 2009, there were nearly 600 housing trust funds in the United States, administered at the city, county, regional, and statewide levels. [1] Revenue sources and eligible uses vary widely from place to place, but all share the goal of increasing the availability of affordable homes.
[1] 2009-2010 Assets & Oppportunity Score Card. Resource Guide: Housing Trust Funds. Washington, DC: CFED
Role: Generate Capital
Policy: Create or Expand Dedicated Housing Trust Funds
How do trust funds work?
Housing trust funds allow state and local governments to establish a specific source of state or locally-raised funding that can only be used for affordable homes. As of December 2009, there were nearly 600 housing trust funds in the United States, administered at the city, county, regional, and statewide levels. [1] Revenue sources and eligible uses vary widely from place to place, but all share the goal of increasing the availability of affordable homes.
Click on the links below to learn more about housing trust funds: Revenue sources for housing trust fundsState and local housing trust funds rely on a variety of different funding sources. Establishing a dedicated source of revenue assures a secure funding stream for the development, preservation, or operation of affordable homes.  How housing trust fund dollars are usedFree from the spending limitations associated with federal programs, administrators of housing trust funds enjoy a great deal of flexibility in determining how trust fund revenues can best be used to benefit the community. Click here to view other resources on housing trust funds. |
[1] 2009-2010 Assets & Oppportunity Score Card. Resource Guide: Housing Trust Funds. Washington, DC: CFED
Goal: Increase the Availability of Affordable Homes
Role: Generate Capital
Policy: Create or Expand Dedicated Housing Trust Funds
Revenue Sources for Housing Trust Funds
When choosing the revenue source (or sources) that will be used to support a housing trust fund, it is important to look for funding streams that best match local resources to local housing needs. In some of the more stable housing markets that still lack affordable homes for renters and owners, communities may be able to use a document recording fee or real estate transfer tax to capture some of the revenue generated by real estate sales and re-direct it to bridge the existing affordability gap. In areas with less real estate activity, a funding source that is not linked to the real estate market may be more effective, such as a small public purpose charge appended to utility bills. Whatever the local conditions, housing trust funds will yield the most value and have the greatest potential for adoption when funding streams are tailored to respond to local revenue potential and address local needs.
In many cases, advocacy efforts have prevented housing trust fund dollars from being redirected to non-housing purposes. During the June 2009 budget session, for example, the Ohio State Senate made several attempts to reduce the state housing trust fund cap to $40 million, down from $53 million to free up funds for non-housing purposes. In the fall of 2009, further legislative action was taken to try to eliminate $30 million from the housing trust fund over a two-year period to balance the state budget. Through a successful campaign organized by a broad coalition of housing advocates in Ohio, in partnership with allies in the state legislature, HTF revenues will remain dedicated to meet the state's affordable housing goals for the time being. [2]
Using Non-Dedicated Revenues to Pave the Way for a Housing Trust Fund
To address this volatility and assure the Trust Fund would have stable funding to keep up with the increasing need for affordable housing in DC, the DC City Council passed the Housing Trust Fund Stabilization Amendment Act of 2008 with the support of several housing and community organizations. The Act changes the allocated amount of funding from a percentage of deed recordation and taxes to a dedication of the first $70 million of deed recordation and transfer taxes to the Trust Fund for fiscal year 2010. The dedicated amount increases to $80 million in FY2011 and this amount will be adjusted by the rate of inflation, as determined by the consumer price index, for all subsequent years. These amounts are, however, subject to appropriation and an ability of the District to balance its budget. [4]
Other housing trust funds use non-dedicated funding streams to augment the funds generated through a dedicated source. Chicago's Low Income Housing Trust Fund, for example, receives a combination of dedicated and appropriated funds from local, state and federal sources. Learn more about Chicago's Low Income Housing Trust Fund.
[1] Personal communication, Mary Brooks, September 21, 2009.
[2] OH Advocates Defeat Multiple Assaults against State Housing Trust Fund. Memo to Members, October 2, 2009. Washington, DC: National Low Income Housing Coalition.
[3] "Washington DC Housing Production Trust Fund Stabilization Act Passes". Housing Trust Fund Project. Center for Community Change, Winter 2009.
[4] Ibid.
Role: Generate Capital
Policy: Create or Expand Dedicated Housing Trust Funds
Revenue Sources for Housing Trust Funds
When choosing the revenue source (or sources) that will be used to support a housing trust fund, it is important to look for funding streams that best match local resources to local housing needs. In some of the more stable housing markets that still lack affordable homes for renters and owners, communities may be able to use a document recording fee or real estate transfer tax to capture some of the revenue generated by real estate sales and re-direct it to bridge the existing affordability gap. In areas with less real estate activity, a funding source that is not linked to the real estate market may be more effective, such as a small public purpose charge appended to utility bills. Whatever the local conditions, housing trust funds will yield the most value and have the greatest potential for adoption when funding streams are tailored to respond to local revenue potential and address local needs.
| While there is no "one-size-fits-all" source of revenue, according to the Housing Trust Fund Project of the Center for Community Change real estate transfer taxes (also called documentary stamp taxes) are the most popular source of revenue for housing trust funds administered at the state level. County housing trust funds are most likely to be funded with revenue from document recording fees, while cities tend to use developer fees such as inclusionary zoning in-lieu fees (optional payments to exempt new developments from affordability requirements) and linkage ordinances (fees paid by new businesses to help the community keep pace with increases in housing needs related to increased economic activity). By definition, housing trust funds with dedicated funding sources are not subject to the annual appropriations process, but there is no guarantee that housing trust fund revenues are protected from diversion for non-housing purposes. For example, in 2009, portions of the Florida, Arizona, and Illinois state housing trust fund revenues- all raised from dedicated sources- were redirected to non-housing purposes as a way to relieve state funding shortfalls. The Florida state housing trust fund (previously one of the largest trust funds in the nation) experienced a significant decline in revenues in 2009 because the state legislature diverted almost $531 million from the housing trust fund to general revenue. [1] | From the Forum... "Housing trust funds that have a dedicated revenue source, such as the documentary stamp tax (transfer tax) that is collected in accordance with state statute, are certainly preferable to trust funds without a dedicated revenue source. But changes in political climate and budget deficits can result in legislative raids on trust funds that are subject to legislative appropriation. Does anyone know of a trust fund with a dedicated revenue source that is NOT subject to appropriation? " See what other people said and sign in to add your response. The HousingPolicy.org Forum is a place to pose questions, exchange ideas, and learn from the experience and expertise of others. This section of the site features interactive forums organized around policy areas. |
In many cases, advocacy efforts have prevented housing trust fund dollars from being redirected to non-housing purposes. During the June 2009 budget session, for example, the Ohio State Senate made several attempts to reduce the state housing trust fund cap to $40 million, down from $53 million to free up funds for non-housing purposes. In the fall of 2009, further legislative action was taken to try to eliminate $30 million from the housing trust fund over a two-year period to balance the state budget. Through a successful campaign organized by a broad coalition of housing advocates in Ohio, in partnership with allies in the state legislature, HTF revenues will remain dedicated to meet the state's affordable housing goals for the time being. [2]
 Photo Credit: Rick Keating, courtesy of King County Housing Authority | Click on the links below to learn more about common dedicated revenue sources for housing trust funds: State housing trust funds County housing trust funds City housing trust funds |
Using Non-Dedicated Revenues to Pave the Way for a Housing Trust Fund
| The real innovation of housing trust funds is the matching of a dedicated and reliable funding source with specific housing needs in the community. In some communities, policymakers and advocates may face significant opposition to dedicating a certain revenue stream for affordable housing, particularly in the face of competing priorities. While identifying a dedicated funding stream is clearly more desirable, some communities have found that initial awards of discretionary appropriations or general obligation bondscan be useful as a starting point for capitalizing a housing trust fund and building momentum for the eventual transfer to a dedicated funding source. Washington DC's Housing Production Trust Fund, for example, was created without dedicated funding in the late 1980s, and received little revenue until a $25 million one-time contribution was made in 2001, following the sale of a parcel of land owned by the City. In 2002, the City Council established a dedicated revenue source, allocating 15 percent of deed recordation and real estate transfer tax revenue to the Trust Fund. By fiscal year 2007, revenues dedicated to the Trust Fund amounted to $59 million, due in part to tax rate increases and increased real estate development in the city. By fiscal year 2008 and 2009, however, these funding sources declined due to the downturn in the housing market. [3] The Trust Fund's dedicated revenues for FY 2009 were $29 million, highlighting the possible volatility of tying trust funding to real estate development activity. | National Housing Trust Fund In July 2008, the National Housing Trust Fund (NHTF) was signed into law to preserve and expand the availability of affordable homes for low- and very low- income renters and owners. Ninety percent of NHTF dollars will be used to expand, preserve, and operate rental housing; up to 10 percent will be used to support first-time homebuyer activities. Three-quarters of all funds must serve extremely low-income households. NHTF dollars will be administered by the U.S. Department of Housing and Urban Development (HUD) to states through block grants, which can be distributed to qualifying public, private, and non-profit entities. The NHTF is first new federal rental housing production program targeted to low income households since 1974. As of December 2009, the NHTF was not operational due to lack of funding. The fiscal year 2010 federal budget commits $1 billion to capitalize the NHTF but the source of funds has not yet been determined. One legislative proposal would transfer $1 billion from the Troubled Assets Relief Program (TARP) to the NHTF. Click here to leave this site and learn more about the National Housing Trust Fund. |
To address this volatility and assure the Trust Fund would have stable funding to keep up with the increasing need for affordable housing in DC, the DC City Council passed the Housing Trust Fund Stabilization Amendment Act of 2008 with the support of several housing and community organizations. The Act changes the allocated amount of funding from a percentage of deed recordation and taxes to a dedication of the first $70 million of deed recordation and transfer taxes to the Trust Fund for fiscal year 2010. The dedicated amount increases to $80 million in FY2011 and this amount will be adjusted by the rate of inflation, as determined by the consumer price index, for all subsequent years. These amounts are, however, subject to appropriation and an ability of the District to balance its budget. [4]
Other housing trust funds use non-dedicated funding streams to augment the funds generated through a dedicated source. Chicago's Low Income Housing Trust Fund, for example, receives a combination of dedicated and appropriated funds from local, state and federal sources. Learn more about Chicago's Low Income Housing Trust Fund.
| You are currently reading: Revenue sources for housing trust funds State and local housing trust funds rely on a variety of different funding sources. Establishing a dedicated source of revenue assures a secure funding stream for the development, preservation, or operation of affordable homes. Other pages in this section: How housing trust fund dollars are usedFree from the spending limitations associated with federal programs, administrators of housing trust funds enjoy a great deal of flexibility in determining how trust fund revenues can best be used to benefit the community. Click here to view other resources on housing trust funds. |
[1] Personal communication, Mary Brooks, September 21, 2009.
[2] OH Advocates Defeat Multiple Assaults against State Housing Trust Fund. Memo to Members, October 2, 2009. Washington, DC: National Low Income Housing Coalition.
[3] "Washington DC Housing Production Trust Fund Stabilization Act Passes". Housing Trust Fund Project. Center for Community Change, Winter 2009.
[4] Ibid.
Goal: Increase the Availability of Affordable Homes
Role: Generate Capital
Policy: Create or Expand Dedicated Housing Trust Funds
Common Revenue Sources for Housing Trust Funds
Common revenue sources for housing trust funds at the state, county, and city levels include real estate transfer taxes, document recording fees, and developer fees.
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County housing trust funds
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City housing trust funds
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[1] Initially 66 of 67 counties were authorized to increase document recording fees under Act 137; Philadelphia County, whose boundaries are coterminous with the City of Philadelphia, was not allowed to participate. In the summer of 2005 the City Council and State Senate voted to amend Act 137 and allow Philadelphia to create its own housing trust fund; the Philadelphia Housing Trust Fund was established shortly thereafter.
Role: Generate Capital
Policy: Create or Expand Dedicated Housing Trust Funds
Common Revenue Sources for Housing Trust Funds
Common revenue sources for housing trust funds at the state, county, and city levels include real estate transfer taxes, document recording fees, and developer fees.
Photo Credit: Rick Keating, courtesy of King County Housing Authority | Click on the links below to learn more about common dedicated revenue sources for housing trust funds: State housing trust funds County housing trust funds City housing trust funds |
State housing trust funds
|  Photo credit: Hispanic Housing Corporation |
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County housing trust funds
| State Enabling Legislation One of the biggest challenges involved in creating city and county housing trust funds is finding a significant and reliable source of funding, especially in states that place restrictions on the use of potential funding sources. As a legal matter, states generally have considerable flexibility in selecting revenue sources for housing trust funds. [1] Many localities also have broad authority to establish dedicated funding streams, though in some states, localities are constrained by state regulation of local taxing and bonding authority and by other limitations on the ability to tap and use specific revenue streams. Some states have made it easier for cities and counties to create their own trust funds by passing "enabling legislation" that provides authority for localities to use new avenues of funding. For instance, in 1993, the Washington State Legislature passed a law allowing cities and counties to exceed state-mandated limits on property taxes for the purpose of creating affordable housing. Similarly, Act 137 in Pennsylvania, passed in 1992, allowed every county except Philadelphia to increase deed and mortgage recording fees in order fund affordable housing. Act 137 has since been amended to include Philadelphia, facilitating the creation of its housing trust fund. Well over half of Pennsylvania's 67 counties now have affordable housing trust funds. [1] A minority of states are prohibited by state law from establishing a dedicated funding stream or using a particular type of dedicated funding source. Georgia's Constitution, for example, specifies that "All money collected from taxes, fees and assessments for State purposes...shall be paid into the General Fund of the State Treasury and shall be appropriated therefrom," prohibiting the state from dedicating public revenue for any purpose. |
City housing trust funds
- Developer fees, including linkage fees, demolition fees and inclusionary zoning in-lieu fees. Some cities collect fees from developers to ensure new construction (residential or otherwise) does not compromise the availability of affordable housing. Revenue from these fees can be deposited into a city trust fund to increase the supply of homes for working families. Developer fees are even more dependent on a healthy economy than real estate transfer taxes, because they usually (but not always) rely on new residential and commercial development, while transfer taxes can be collected on the sale of existing properties. The recent economic downturn, which severely curtailed new development, also significantly reduced these fees and highlighted the volatility of developer fees as a dedicated funding source.
Cambridge, MA's Incentive Zoning Ordinance requires certain non-residential developers to pay a linkage fee of $4.25 per square foot of new construction; proceeds go into the city's trust fund for the development of affordable homes. By tying the fee to commercial development, they can separate trust fund revenues from the health of the housing market. Residential and commercial real estate markets do not always move in tandem, one can be up while the other is down and vice versa. When combined with other funding options, this could reduce the volatility of using these fees as a funding source.
- Tax increment financing -- The Salt Lake City Housing Trust Fund is funded through Tax Increment Financing (TIF) proceeds. Administrators must apply for a portion of TIF revenues on an annual basis, and typically receive between $360,000 and $1 million each year. The TIF district is set to expire in 2025.
- Document recording fee -- A per-page surcharge on all documents added to the public record, such as birth certificates, deeds of trust, and marriage licenses. The Philadelphia Housing Trust Fund, established in 2005, is expected to generate $10 million each year through a surcharge on document recording fees that range from $57 to $72 depending on the document type.
- Hotel/ motel taxes -- Most major cities generate significant revenue through hotel/ motel taxes due to tourism and convention business. Hotels and motels generate a significant amount of lower-paying jobs and many cities lack housing that is affordable or acceptable to these workers. Using hotel taxes to fund a city housing trust fund might be an appropriate solution in these cities.
- Property taxes can be dedicated from residential or commercial development as a way to generate revenue for housing trust funds. In Boulder, Colorado, a portion of the Community Housing Assistance Program (CHAP) funding comes from a portion of property taxes, equivalent to approximately $19 per year on a $300,000 home, which helps produce affordable homes for renters and owners.
| What is a linkage fee? The creation of new jobs in a community also stimulates new local housing needs. Some communities assess "linkage fees" on the developers of new commercial, industrial or retail properties to help offset local housing impacts and make sure that the development of affordable homes keeps pace with local economic development and job growth. These fees are usually charged on a per-square-foot basis and deposited into a housing trust fund, from which funding awards are made according to local preferences and priorities. By establishing a direct connection between new jobs and the need for new homes, linkage fees help to make it possible for families to live in the communities where they work. Visit PolicyLink's Equitable Development Toolkit to learn more about linkage fees. |
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| You are currently reading: Revenue sources for housing trust funds State and local housing trust funds rely on a variety of different funding sources. Establishing a dedicated source of revenue assures a secure funding stream for the development, preservation, or operation of affordable homes. Other pages in this section: How housing trust fund dollars are usedFree from the spending limitations associated with federal programs, administrators of housing trust funds enjoy a great deal of flexibility in determining how trust fund revenues can best be used to benefit the community. Click here to view other resources on housing trust funds. |
[1] Initially 66 of 67 counties were authorized to increase document recording fees under Act 137; Philadelphia County, whose boundaries are coterminous with the City of Philadelphia, was not allowed to participate. In the summer of 2005 the City Council and State Senate voted to amend Act 137 and allow Philadelphia to create its own housing trust fund; the Philadelphia Housing Trust Fund was established shortly thereafter.
Goal: Increase the Availability of Affordable Homes
Role: Generate Capital
Policy: Create or Expand Dedicated Housing Trust Funds
How Housing Trust Fund Dollars Are Used
Housing trust funds can be used for nearly any purpose related to increasing housing affordability, quality, or stability. While every trust fund is different from the next, one common theme is a focus on the housing needs of very low-income families, in part because such families tend to have the most severe housing affordability challenges and in part because this tends to be a priority of the coalitions that are formed to advocate for the adoption of a housing trust fund.
However, in some cases, such as the state of Florida, the trust fund is used to address the housing needs of a broader range of the income spectrum, likely reflecting the very broad coalition of interests supporting the fund, which includes realtors and homebuilders, as well as low-income housing advocates. When designing a housing trust, many decisions need to be made, including decisions regarding:
Role: Generate Capital
Policy: Create or Expand Dedicated Housing Trust Funds
How Housing Trust Fund Dollars Are Used
Housing trust funds can be used for nearly any purpose related to increasing housing affordability, quality, or stability. While every trust fund is different from the next, one common theme is a focus on the housing needs of very low-income families, in part because such families tend to have the most severe housing affordability challenges and in part because this tends to be a priority of the coalitions that are formed to advocate for the adoption of a housing trust fund.
However, in some cases, such as the state of Florida, the trust fund is used to address the housing needs of a broader range of the income spectrum, likely reflecting the very broad coalition of interests supporting the fund, which includes realtors and homebuilders, as well as low-income housing advocates. When designing a housing trust, many decisions need to be made, including decisions regarding:
- Eligible applicants and activities
- Requirements related to income eligibility and long-term affordability
- Whether awards are issued as grants, loans, or both
- Whether a portion of the fund is set aside to achieve special purposes, such as providing housing in targeted areas or serving the lowest-income households
| You are currently reading: How housing trust fund dollars are used Free from the spending limitations associated with federal programs, administrators of housing trust funds enjoy a great deal of flexibility in determining how trust fund revenues can best be used to benefit the community. Other pages in this section: Revenue sources for housing trust fundsState and local housing trust funds rely on a variety of different funding sources. Establishing a dedicated source of revenue assures a secure funding stream for the development, preservation, or operation of affordable homes. Click here to view other resources on housing trust funds. |
Goal: Increase the Availability of Affordable Homes
Role: Generate Capital
Policy: Create or Expand Dedicated Housing Trust Funds
Key Resources
The following is a list of key resources on topics related to housing trust funds. If you're aware of other resources that should be added, please contact us.
Websites
Housing Trust Fund Project of the Center for Community Change
The most comprehensive source of information on state and local housing trust funds, the Housing Trust Fund Project offers an array of resources ranging from a Workbook for Creating a Housing Trust Fund to case studies of trust funds throughout the country. The Housing Trust Fund Progress Report 2009 provides a look at the state of the art at the city, county and state levels; the Trust Fund Project also produces a quarterly newsletter addressing current housing trust fund events and activities.
PolicyLink's Equitable Development Toolkit
This online resource provides information on an array of strategies, including Housing Trust Funds, and is intended to provide guidance to advocates interested in advancing social and economic equity.
2009-2010 Assets & Opportunity Scorecard: Housing Trust Funds
The Corporation for Enterprise Development (CFED) produces this annual online scorecard to rank state housing trust funds based on funding and stewardship criteria. The scorecard is accompanied by a resource guide.
HousingPolicy.org Forum
The HousingPolicy.org Forum is a place to pose questions, exchange ideas, and learn from the experience and expertise of others. This section of the site features interactive forums organized around policy areas, including shared equity homeownership, rental housing preservation, inclusionary zoning, neighborhood stabilization, and foreclosure prevention.
Articles & Reports
2010 Survey: State Housing Trust Funds. [PDF] By Mary Brooks. 2010. Frazier Park, CA: Center for Community Change.
This brief report describes the findings of a biennial survey on the status of state housing trust funds.
Housing Trust Fund Resource Guide: 2009-2010 Assets & Opportunity Scorecard [PDF] 2009. Washington, DC: The Corporation for Enterprise Development (CFED).
This report accompanies the Corporation for Enterprise Development (CFED) 2009-20110 Assets & Opportunity Scorecard that rates state housing trust funds. It describes elements that contribute to strong state housing trust funds and provides information on the current status of different housing trust funds across the country.
Florida's Housing Trust Fund: Addressing the State's Affordable Housing Needs. [PDF] 2004. By Kristin Larsen. Journal of Land Use 19(2): 525-535.
This article details the lack of affordable housing in Florida and examines how the state's housing trust fund has been used. The author concludes that while the trust fund has been an effective tool for increasing the supply of affordable housing, municipalities could use the funds more effectively to serve the lowest-income population segments.
Long-Term Affordable Housing Strategies in Hot Housing Markets. [PDF] 2008. By Jesse Mintz-Roth. Washington, DC: NeighborWorks America and Cambridge, MA: Harvard Joint Center for Housing Studies.
This paper reviews housing policies that can be used to create and maintain long-term affordability in "hot" markets. Specific tools discussed include shared equity and limited equity cooperatives, housing trust funds, and inclusionary zoning. The author also evaluates the trade-offs associated with each of these policies related to longevity, affordability, and equity-generation.
State Housing Trust Funds: Meeting Local Affordable Housing Needs. [PDF] 2005. By Carolina Reid. Community Investments. Federal Reserve Bank of San Francisco.
This report reviews the history of state housing trust funds and describes how they work. It also includes case studies.
Return to the Housing Trust Funds main page.
Role: Generate Capital
Policy: Create or Expand Dedicated Housing Trust Funds
Key Resources
The following is a list of key resources on topics related to housing trust funds. If you're aware of other resources that should be added, please contact us.
Websites
Housing Trust Fund Project of the Center for Community Change
The most comprehensive source of information on state and local housing trust funds, the Housing Trust Fund Project offers an array of resources ranging from a Workbook for Creating a Housing Trust Fund to case studies of trust funds throughout the country. The Housing Trust Fund Progress Report 2009 provides a look at the state of the art at the city, county and state levels; the Trust Fund Project also produces a quarterly newsletter addressing current housing trust fund events and activities.
PolicyLink's Equitable Development Toolkit
This online resource provides information on an array of strategies, including Housing Trust Funds, and is intended to provide guidance to advocates interested in advancing social and economic equity.
2009-2010 Assets & Opportunity Scorecard: Housing Trust Funds
The Corporation for Enterprise Development (CFED) produces this annual online scorecard to rank state housing trust funds based on funding and stewardship criteria. The scorecard is accompanied by a resource guide.
HousingPolicy.org Forum
The HousingPolicy.org Forum is a place to pose questions, exchange ideas, and learn from the experience and expertise of others. This section of the site features interactive forums organized around policy areas, including shared equity homeownership, rental housing preservation, inclusionary zoning, neighborhood stabilization, and foreclosure prevention.
Articles & Reports
2010 Survey: State Housing Trust Funds. [PDF] By Mary Brooks. 2010. Frazier Park, CA: Center for Community Change.
This brief report describes the findings of a biennial survey on the status of state housing trust funds.
Housing Trust Fund Resource Guide: 2009-2010 Assets & Opportunity Scorecard [PDF] 2009. Washington, DC: The Corporation for Enterprise Development (CFED).
This report accompanies the Corporation for Enterprise Development (CFED) 2009-20110 Assets & Opportunity Scorecard that rates state housing trust funds. It describes elements that contribute to strong state housing trust funds and provides information on the current status of different housing trust funds across the country.
Florida's Housing Trust Fund: Addressing the State's Affordable Housing Needs. [PDF] 2004. By Kristin Larsen. Journal of Land Use 19(2): 525-535.
This article details the lack of affordable housing in Florida and examines how the state's housing trust fund has been used. The author concludes that while the trust fund has been an effective tool for increasing the supply of affordable housing, municipalities could use the funds more effectively to serve the lowest-income population segments.
Long-Term Affordable Housing Strategies in Hot Housing Markets. [PDF] 2008. By Jesse Mintz-Roth. Washington, DC: NeighborWorks America and Cambridge, MA: Harvard Joint Center for Housing Studies.
This paper reviews housing policies that can be used to create and maintain long-term affordability in "hot" markets. Specific tools discussed include shared equity and limited equity cooperatives, housing trust funds, and inclusionary zoning. The author also evaluates the trade-offs associated with each of these policies related to longevity, affordability, and equity-generation.
State Housing Trust Funds: Meeting Local Affordable Housing Needs. [PDF] 2005. By Carolina Reid. Community Investments. Federal Reserve Bank of San Francisco.
This report reviews the history of state housing trust funds and describes how they work. It also includes case studies.
Return to the Housing Trust Funds main page.
Goal: Increase the Availability of Affordable Homes
Role: Generate Capital
Policy: Create or Expand Dedicated Housing Trust Funds
Case Study: Chicago's Low Income Housing Trust Fund
Chicago's Low Income Housing Trust Fund
Chicago focuses a majority of its Low Income Housing Trust Fund resources on the Rental Subsidy Program -- a nationally recognized model for assisting very low-income individuals. The Trust Fund is used to subsidize rent for extremely low-income households (earning less than 30 percent off area median income) through quarterly payments made directly to landlords.
Discretionary funds from the City of Chicago's corporate fund, as well as HUD grants and other federal assistance, have been used to support the Trust Fund since its inception. In 2005, the City of Chicago made a 5 year commitment totaling $5 million from proceeds from the privatization of the Skyway (a 7.8 mile toll road connecting to the Indiana Tollway). The commitment was renewed in 2010 with a $1.3 million allocation of proceeds from the sale of parking meters.
The Trust Fund was also designated by the Chicago City Council to receive 40% of the fees developers pay for zoning and/or administrative relief which allows them to build at a higher density than normally allowed. Funding from this source is used to support long-term investments with forgivable loans and grants.
In addition to the City's efforts with the Low Income Housing Trust Fund, the State of Illinois passed the Rental Housing Support Act in 2005, establishing a statewide rental assistance program for extremely and severely low-income households. The program is administered by the Illinois Housing Development Authority and funded through a $10 document recording fee, which is assessed on all real estate documents in communities across the state. Ninety percent of funds collected are returned to the local entity to support permanent affordable housing.
Click here to leave this site and learn more about Chicago's Low Income Housing Trust Fund.
Continue learning about revenue sources for housing trust funds.
Role: Generate Capital
Policy: Create or Expand Dedicated Housing Trust Funds
Case Study: Chicago's Low Income Housing Trust Fund
Chicago's Low Income Housing Trust Fund
Chicago focuses a majority of its Low Income Housing Trust Fund resources on the Rental Subsidy Program -- a nationally recognized model for assisting very low-income individuals. The Trust Fund is used to subsidize rent for extremely low-income households (earning less than 30 percent off area median income) through quarterly payments made directly to landlords.
Discretionary funds from the City of Chicago's corporate fund, as well as HUD grants and other federal assistance, have been used to support the Trust Fund since its inception. In 2005, the City of Chicago made a 5 year commitment totaling $5 million from proceeds from the privatization of the Skyway (a 7.8 mile toll road connecting to the Indiana Tollway). The commitment was renewed in 2010 with a $1.3 million allocation of proceeds from the sale of parking meters.
The Trust Fund was also designated by the Chicago City Council to receive 40% of the fees developers pay for zoning and/or administrative relief which allows them to build at a higher density than normally allowed. Funding from this source is used to support long-term investments with forgivable loans and grants.
In addition to the City's efforts with the Low Income Housing Trust Fund, the State of Illinois passed the Rental Housing Support Act in 2005, establishing a statewide rental assistance program for extremely and severely low-income households. The program is administered by the Illinois Housing Development Authority and funded through a $10 document recording fee, which is assessed on all real estate documents in communities across the state. Ninety percent of funds collected are returned to the local entity to support permanent affordable housing.
Click here to leave this site and learn more about Chicago's Low Income Housing Trust Fund.
Continue learning about revenue sources for housing trust funds.