SR explores affordable housing revenue options

Pulling together funding for a housing development affordable for low-income families has always meant navigating a checkerboard of options, oftentimes involving up to 20 sources, each with its own set of obligations and limitations. None of which, even in tandem, mean a project will pencil out to fruition.

Until last year, there was no sustainable statewide funding channel for affordable housing maintenance or development. That was when the Oregon Legislature passed the document-recording fee, which levied a small fee for filing certain documents toward a fund for low-income housing. It is a sustained source, but far from the panacea of revenue needed to ensure that all income levels can afford a place to live.

Now there’s a new undercurrent running through the affordable housing community, civic leaders and advocates, on how to tackle the region’s housing crisis – a crisis that has one that has one in four Oregonians pay more than 50 percent of their income on rent, and studies concluding that an estimated 20,000 of affordable units – affordable for individuals and families below the poverty line – will be needed before the end of this decade. The discussion centers on the potential for a housing levy that could bring in millions of dollars toward sustaining the region’s affordable housing infrastructure, and ensuring that low-income families can afford a safe and stable place to live. (The Portland metro area is peppered with about 70 myriad taxing districts, none of which dedicate any significant funding for affordable housing.)

It’s not an uncommon approach from a national perspective. Nearly three decades ago, Seattle voters launched a legacy of supporting affordable housing, approving one bond and four levies to fund more than 10,000 affordable units for the formerly homeless, seniors and low-income individuals and families. It has also provided down payment loans for first-time homebuyers and rental assistance for thousands of households struggle to keep pace with rates.

Seattle’s approach is not the only progressive way to address livability; others include establishing local trust funds and issuing groundbreaking bonds. Here’s rundown of what other states have pursued to correct a nationwide imbalance between economic breakdowns and housing needs:

– Rhode Island: Looking down a 13,000 affordable unit shortfall, the Rhode Island legislature put the state’s first ever bond issue for housing on the November ballot. It passed by the largest margin nationally for a housing bond, raising $50 million in seed money to create 1,000 affordable housing homes over the next four years.

– California: In 2004, voters passed Proposition 63 to create the California Chronic Homeless Initiative and the Mental Health Services Act. The measure opened the door for the Department of Mental Health to provide increased funding, personnel, and other resources to support county mental health programs and monitor progress toward statewide goals for children, transition age youth, adults, older adults, and families.  Funds for the Act are collected annually through a 1 percent income tax increase on all individuals making over $1 million a year. The Act addresses a broad continuum of prevention, early intervention, and service needs and the necessary infrastructure, technology, and training elements that will effectively support this system and proposes up to $75 million a year for housing programs.

– Illinois: The Illinois Rental Housing Support program is the nation’s largest state rental assistance program, providing rent subsidies for an estimated 4,000 “rent burdened” households making ends meet on extremely low incomes. The program’s funding – provided by a $10 fee on real estate document recordings, is distributed through Local Administration Agencies that work directly with landlords to provide units for the program and possible outreach to tenants in need.

– Vermont: The longest standing trust fund is Vermont’s Housing and Conservation Trust Fund. In 1987 the Vermont Legislature created a Housing and Conservation Trust Fund that makes loans and grants to municipalities, nonprofits, housing co-ops, and qualifying state agencies for permanent affordable housing and permanently protected open space and/or projects that combine the two. As of 1997, 4,523 units of permanently affordable rental and owner-occupied housing has been developed through the Fund.

– New Jersey Special Needs Housing Trust Fund: In 2005 the New Jersey State Legislature passed the Special Needs Housing Trust Fund Act to create a housing trust fund from proceeds from motor vehicle surcharges securitization bonds. The fund helps create additional units of permanent supportive housing and community residences through new construction or rehabilitation; and helps support the long-term viability of such housing and residential opportunities for individuals with special needs with priority given to individuals with mental illness.

– Chicago: The Chicago Low-Income Housing Trust Fund was created in 1989 by the Chicago City Council. It assists residents living in poverty, with incomes not exceeding 30 percent of area median income, by providing rent subsidies, supportive housing and upfront investments for longer term affordability. The Trust Fund serves Chicago’s low-income working households, the disabled, the elderly, and countless homeless individuals and families.

– Ashland Ore.: The city of Ashland established its Housing Trust Fund in 2008 as a dedicated source of revenue to provide ongoing funding for housing projects, or programs, that address the housing needs of Ashland residents. The fund’s primary purpose is encouraging the creation of housing for homeownership or rent at a cost that will enable low- and moderate- income families to afford quality housing while paying no more than 30 percent of gross household income on housing.

– The Miami-Dade County Homeless Trust: The Miami-Dade County Homeless Trust was created in 1993 by the Board of County Commissioners to fund the Community Homeless Plan.  The Trust’s annual budget is approximately $40 million, comprised of a local food and beverage proceeds from a 1 percent tax, as well as federal funds from the Department of Housing and Urban Development, and state funding. Approximately $20 million per year comes through a competitive process through HUD; $12 million via the Food and Beverage tax, and the remainder through State funding and private sector contributions. The trust receives no general fund dollars from the county.

Source: Various city and state sources, The Corporation for Supportive Housing.

by Staff Reporters

2 responses to “SR explores affordable housing revenue options

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  2. Pingback: We want our 30% set aside, already! « For those who can’t afford free speech

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