Help Establish Housing Trust Funds

Los Angeles is not the only city suffering from the housing crisis. Every city and county should create a housing trust fund. Innovative initiatives and public-private partnerships are vital for the creation of sustainable solutions to the affordable housing crisis. Because local trust funds can be crafted to meet the specific and varying needs of the jurisdictions from which they originate, they have proven to be effective sources of financing. Housing trust funds exist in over forty states around the country.

A housing trust fund is a distinct account that receives dedicated sources of public funds, which in turn are used to leverage additional private and public resources to support affordable housing. Identifying the sources of revenue to commit and dedicate can be difficult. A few of the more common sources include: real estate transfer tax, interest from real estate or mortgage escrow accounts, linkage fees placed on commercial development, other development fees and document recording fees.

Currently, housing advocates from around California are considering the viability of a statewide trust fund.

Moving in the Right Direction
Affordable housing advocates in Long Beach are in a celebratory mood. Tuesday, January 23, 2007, the Long Beach City Council voted to move forward in substantial ways to improve the effectiveness of the City’s Housing Trust Fund. Last year, thanks in large part to the support of Council Members Tonia Reyes-Uranga and Bonnie Lowenthal, the Council voted to allocate fifty percent of the Housing Trust Fund for extremely low-income housing. A thirty percent increase from the original motion passed in October 2005.

Starting 2007 with some big steps in the right direction, the City of Long Beach has:

1. Directed Staff to hire David Rosen and Associates to update an earlier study of trust fund revenue options. Updates will focus on (a) a mixed-income housing study; (b) a commercial linkage fee study; (c) examination of the conversion market in Long Beach and recommendations regarding a condominium conversion fee and an affordable housing set-aside in converted buildings; (d) examination of the sufficiency of the redevelopment agency’s twenty percent housing set-aside to determine whether more money can be dedicated to affordable housing. Mr. Rosen is to report back to the Council with the results of his updated study within 90 days.
   
2. Directed the City Attorney to begin working with Legal Aid to draft mixed income housing and commercial linkage fee ordinances for the City. 
   
   Both directives passed with 7 YES votes and 1 NO vote.
   
3. Directed the City Attorney to come back with a revised Housing Trust Fund ordinance that would allow the City to place federal HOME and redevelopment dollars in the HTF.
   
   This motion passed unanimously.

Action Items:

1. To get involved or for more information on the Housing Long Beach Coalition, contact Cheryl Roberto-Lvovsky at (562) 427-1000 ext. 16 or clvovsky (at) drcinc.org
   
   
2. Stayed tuned for upcoming information on how you can get involved with the Los Angeles and statewide campaign efforts.
   
   

   For more information on Housing Trusts Funds around the country, go to www.communitychange.org.

BACK TO TOP

Housing and The 2007 Federal Budget

Each year the President submits his budget request, which kicks off the budget process. Congress then responds with its budget resolution, which in some years is followed by a budget “reconciliation,” a special procedure used to facilitate the passage of spending and tax legislation. The way in which Congress develops tax and spending legislation is guided by a set of specific procedures laid out in the Congressional Budget Act of 1974. The centerpiece of the Budget Act is the requirement that Congress each year develop a “budget resolution” setting overarching limits on spending and on tax cuts. As a general rule, the President submits his budget in the first week of February.

There are two kinds of federal spending: 1) discretionary and 2) entitlement (sometimes referred to as mandatory) spending. Congress has capped discretionary expenditures/programs. Almost all defense spending is discretionary, as are the budgets for K-12 education, health research, and housing, to name just a few examples. Entitlement programs include Medicare, Medicaid and Social Security, and certain other programs such as food stamps, veterans’ benefits, and unemployment insurance.

In March, the House Budget Committee adopted its 2007 budget resolution on a party-line vote. Low-income working people and those on fixed-incomes will be most adversely affected if the budget resolution is passed in its current form. The resolution approved by the House Committee mirrors the Administration’s proposed $873 billion cap on discretionary spending, which includes most housing programs. Discretionary or appropriated programs fall under the jurisdiction of the House and Senate Appropriations Committees. Discretionary programs must have their funding renewed each year in order to continue operating. Altogether, discretionary programs make up approximately one-third of all federal spending. The Administration’s budget spells out how much funding it recommends for each discretionary program.

The 2007 House measure includes $6.8 billion in cuts to entitlement programs over five years. Programs facing cuts include Temporary Assistance for Needy Families (TANF), unemployment insurance, and income support for poor seniors or people with disabilities. Now that the budget resolution has passed the Committee, the full House is expected to vote on its passage within the week. Both moderate and conservative representatives have expressed concern with the budget resolution as it currently stands.

A final vote on the budget in the House is expected sometime in early to mid-May, then the budget will be presented to the Senate for affirmation or amendment. We will keep you posted.

Action Items:

1. Call the DC offices of your Representative this week, and ask to speak to the staff person in each who deals with housing issues. Find your Representative at by entering your zip code in the Contact Congress box at www.house.gov.

Talking Points:

I am calling to urge Representative [your representative's name] to vote against the Budget Committee's budget resolution, H. Con. Res. 376. If passed, it would force cuts in housing and other essential services. Its funding is so low that vulnerable people, including children, struggling workers, and seniors, will lose needed services. Vote NO on the budget resolution.

Please report the results of your calls to Kim Schaffer at the National Low Income Housing Coalition, (202) 662-1530 x232 or kim (at) nlihc.org.

For a complete review of the budget process go to the Center on Budget and Policy Priorities at www.cbpp.org.