Housing Trust Fund; an Idea Whose Time Has Come

By Jim Rodriguez

Creation of a Housing Trust Fund in San Francisco will allow for allocation of money directly into affordable housing, preventing an increase in property taxes.

An alternative solution to San Francisco's shortage of affordable housing is the creation of a Housing Trust Fund. Over 130 municipalities across the nation have created Housing Trust Funds to provide the financial resources needed to address the housing needs of low and very low income households. A Housing Trust Fund can be locally designed to support virtually any housing activity that serves the targeted beneficiary, including, first time homeowners, non-profit rentals, and even the homeless population.

Although most housing trust funds have a tax, or fee dedicated to the fund, another suggestion may be that selected property taxes generated from new businesses coming into San Francisco, be committed to the trust fund. On an average, for every $1 committed to a housing project by a housing trust fund, another $5-10 is leveraged in other public and private resources. Jurisdictions have documented increased jobs, growing sales taxes, higher property tax revenues, and many other economic benefits from the operation of their housing trust fund. Members of the Project Area Committee of Bayview/Hunters Point (PAC), the citizens advisory board for the San Francisco Redevelopment Agency, have suggested that the property taxes generated by the proposed new Home Depot (est. 500K), be allocated directly towards affordable housing.

There is currently a federal proposal for legislation of a National Housing Trust Fund as well. Their intent is to match the local trust fund with two federal dollars for every one dollar provided by the fund. The source of capital from the National Housing Trust Fund would initially come from excess FHA and Ginnie Mae revenue. The use of Trust Fund funds would be flexible, to ensure its compatibility with Low Income Housing Tax Credits, private activity bonds, Community Development Block Grants, HOME, Section 8, public housing, and other forms of assistance.

With the advent of proposition 13, and the meteoric rise in the cost of homes, new homeowners in San Francisco already pay more than their fair share in property taxes. They may soon be asked to pay more for PUC projects, schools, and affordable housing. The creation of a local housing trust fund will deflect the cost of affordable housing away from property owners, and place primary funding resources on the federal government and new local businesses. The creation of a housing Trust Fund is an idea whose time has come.