Funds in Ohio, Florida address housing needs, boost economy.
By Ret Boney
[04.26.04] – Affordable-housing advocates in North Carolina have pushed for years for a bigger, more reliable source of money to improve housing for poor people.
Without a larger and more secure funding source, they say, the state-sponsored N.C. Housing Trust Fund will remain at the mercy of annual funding from lawmakers, forced to compete each year against other needs for limited budget dollars.
Other states, they say, have developed innovative strategies to pay for affordable housing.
Florida’s trust fund, for example, regularly gets more than $100 million a year.
And by tapping other public and private sources, the local share of that fund alone has fueled over $6 billion in affordable housing development, according to the Florida Housing Finance Corp., which administers the funds.
In Ohio, beginning this year, the state’s trust fund will receive as much as $50 million a year as result of a recent change in the law.
That money, when spread across the wide range of activities the trust fund supports, will generate about 15,000 new jobs and some $370 million in new wages, according to estimates by the Coalition on Homelessness and Housing, a statewide advocacy group.
In comparison, after the initial infusion to North Carolina’s trust fund in 1988, annual funding from lawmakers has averaged about $3.2 million, with no funding at all in three of those years, according to the N.C. Housing Finance Agency.
When the Florida Housing Trust Fund was established in 1992, the law created a dedicated, ongoing revenue source by increasing the “documentary stamp tax,” a fee levied on real estate transactions.
The law also created programs to fund housing efforts in all 67 Florida counties, based primarily on population, with most of the funds given to local governments for distribution based on local needs for affordable housing.
Key to passage of the Florida legislation was the work of a coalition consisting of “an unlikely group of allies,” says Jaimie Ross, president of the Florida Housing Coalition, a provider of affordable housing training and technical assistance.
That coalition included homebuilders, real estate agents, environmentalists, local governments, religious groups and advocates for the poor and homeless, among other partners.
Winning passage of the legislation also required extensive compromise and commitment on the part of coalition members, Ross says.
The most that Florida’s trust fund has received in a single year was about $250 million, with the annual amount varying each year based on real estate-related activity, Ross says.
Every $10 million invested by Florida’s trust fund creates 1,500 jobs, according to estimates by the Florida Housing Coalition.
But even funds with dedicated sources can hit snags.
Of $316 million intended for the fund in the last fiscal year, Ross says, Florida Gov. Jeb Bush and state lawmakers used $126 million to cover other needs in the state’s general budget.
Now lawmakers are discussing putting a cap on the fund, with the excess going to the general budget.
“We’re working to keep it together,” says Ross, “but we are under attack.”
Ohio’s housing trust fund, established in 1991, won its secure revenue source last year when Ohio lawmakers voted to increase the county “recordation” fee, a charge for filing real estate documents and other papers.
The law, which took effect last August, capped the money earmarked for the trust fund at $50 million a year, with the excess going to other state budget priorities.
The quest for a secure funding source for the Ohio fund has been a long process, with the first several attempts failing, says Bill Faith, executive director of the Coalition on Homelessness and Housing in Ohio.
He credits the recent law, the result of a campaign that was underway for more than a year, to a broad-based coalition of supporters, including developers, bankers, elected officials, housing advocates, the religious community and others.
Faith hopes the secure funding, now in place, will continue so “we don’t ever have to fight the fight for funding again.”
Since it was created, he estimates, the fund has benefited more than 300,000 low-income Ohioans.
That assistance includes construction of homes and rental properties, as well as rental assistance, repair assistance, handicapped modifications and homeless-prevention services.
“We’ll be able to serve a lot more people, and providers will have resources to do more,” Faith says of the increase in funding.
With a secure source of dollars, housing advocates say, states can plan systematically for housing needs, form deeper public and private partnerships and begin long-term efforts to chip away at homelessness and substandard housing.
Without a secure funding source, they say, they will continue to spend their time and resources fighting the annual funding battle.