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.
definition, housing trust funds are 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
decisions. However some communities maintain local accounts that are
reserved for affordable housing but are not connected to a dedicated
revenue source. While these programs do not benefit from the reliable
funding conferred by a dedicated source, they can play an important
role in addressing local housing needs.
While housing trust
funds can be tailored to meet the needs of communities with a variety
of housing conditions, they represent a particularly important policy
to consider in a hot housing market. Certain types of dedicated funding
sources for housing trust funds -- notably, real estate transfer taxes
, linkage fees
and document recording fees
-- generate more revenue for affordable housing when there is an uptick
in housing market activity and when homes prices increase. For this
reason, housing trust funds that rely on these or other similar funding
sources can help communities to harness the power of hot housing
markets to raise funds for affordable homes.
to learn more about housing trust funds. Please note that you will be
exiting the Capitalize on Market Activity strategy and moving to the
Generate Capital strategy, which contains our overview of housing trust
Click here to learn about other policies that capitalize on market activity.