Housing trust funds

Housing trust funds (HTFs) are a suggested strategy to increase affordable, quality housing options (Urban-Newman 2005, APA-Meck 2003) and minimize the displacement of residents with low incomes that can follow such neighborhood improvements (Damewood 2011). Housing improvements have been shown to positively affect health outcomes, especially when improvements address warmth and energy efficiency (Thomson 2015). HTFs may help meet the housing needs of families with low incomes, including the needs of those with the lowest incomes (AIC-HTF); program funds are typically designated for these families (Scally 2012). In a Florida-based study, HTFs appear to increase affordable housing initiatives across the state, from rural counties to large urban centers (Larsen 2009). A Washington, D.C.-based study suggests that HTFs in conjunction with other programs and policies can support affordable housing options (Howell 2016). However, additional evidence is needed to confirm effects.

HTFs can prioritize energy efficiency improvements for affordable housing units, which can reduce energy use and expenditures (NHT-Energy, ACEEE-Heating). Many households with low incomes spend 20% or more of their income on energy costs (NHT-Energy); heating is usually the largest household energy expense, often comprising 35% to 50% of annual energy bills (ACEEE-Heating). Experts suggest HTFs that help households reduce energy use for heating can substantially reduce household greenhouse gas pollution that contributes to climate change, improve rent stability, and improve residents’ quality of life (NHT-Energy, ACEEE-Heating).

Households experiencing energy insecurity usually include children, racial or ethnic minorities, and long-term residents of neighborhoods with homes in poor condition (Hernandez 2019). Black households experience the most severe energy insecurity, which experts suggest may be a product of residential segregation and housing discrimination (Hernandez 2019, Lewis 2019). HTFs that are part of multi-component initiatives that include weatherization assistance and energy efficient home improvements may improve the quality and value of homes, which supports potential wealth accumulation, addresses the disproportionate burden of energy insecurity on Black households, and helps reduce the racial wealth divide (Lewis 2019). HTFs that increase paths to homeownership and support homeowners with low incomes may help reduce the racial wealth divide, since a significant part of the racial wealth divide at all income levels relates to lower homeownership rates and lower home values for people of color (PRRAC-Haberle 2021, Urban-McCargo 2020, Kaplan 2007).

HTFs can be used to create and support mixed-use and mixed-income housing developments (AIC-HTF). Local agencies or governments may allocate funds from HTFs to serve groups that are not eligible for other forms of housing support and close funding stream gaps (LHS-HTF). HTFs can also partner with other housing development funds to expand their reach; such partnerships can create jobs in housing development and new homes have economic benefits such as increasing local revenue from property taxes, income taxes, and sales taxes (AIC-HTF). HTFs may be more successful when established with dedicated funding from multiple sources, managed within the context of other affordable housing programs, and provided with data on local housing needs and feasibility reports (Beard 2021).

Housing trust funds (HTFs) have the potential to decrease disparities in access to affordable, quality housing options between households with low incomes and those with high incomes (AIC-HTF, Urban-Newman 2005, APA-Meck 2003). HTFs may help meet the housing needs and support the well-being of families with low incomes, including those with the lowest incomes, families at risk of homelessness, and those at risk of displacement (AIC-HTF). Quality, affordable housing is essential to creating stable neighborhoods for the broader community (AIC-HTF, Brooks 2016) and HTFs can increase neighborhood stability and reduce displacement of residents with low incomes (AIC-HTF, Damewood 2011). A Florida-based study associates HTFs with increases in affordable housing in all types of communities, including rural counties and large urban centers (Larsen 2009).

HTFs may also be tailored to reach communities of color and to reduce disparities in access to quality, affordable housing between minority households and white households (AIC-HTF). The COVID-19 pandemic highlighted the extensive housing inequities faced by communities of color (Urban-Reynolds 2021). Experts suggest that additional funding for HTFs is needed to increase access to quality, affordable housing for all (Mueller 2020).

Discriminatory housing, lending, and exclusionary zoning policies in the era of Jim Crow and government-sanctioned segregation led to the redlining practices of the Federal Housing Administration (FHA) and concentrated poverty. Redlining entrenched residential segregation, denying people of color access to government-insured mortgages and making the homes in the neighborhoods where they lived uninsurable (Kaplan 2007). The Fair Housing Act of 1968 was passed to reduce housing discrimination, but it has not stopped housing discrimination against people of color or helped rebuild the marginalized neighborhoods created by residential segregation (Urban-Reynolds 2021, AIC-HTF). In the present day, formerly redlined neighborhoods remain more likely to include older homes in poorer condition, meaning homes that have energy inefficient systems; lead paint, soil, or pipes; mold and other allergens; repair needs; challenges with heating and cooling; and more. These neighborhoods are often near sources of pollution, toxins, and other health hazards, such as coal-fired power plants or hazardous waste disposal sites (Braveman 2022).

While state and local housing trust funds have been working to increase affordable housing options since the 1980s (Brooks 2016), they were not eligible for federal funding until 1992 (Federal Register-HTF). The federal HTF, also known as the National Housing Trust Fund (NHTF), was not created by Congress until 2008, as part of the government’s reaction to the 2008 financial crisis (Mueller 2020). NHTF grants are funded from mortgage sales by Fannie Mae and Freddie Mac, the two largest government-sponsored housing finance enterprises in the country; however, the funds raised through this process are lower than anticipated and are insufficient to meet demand (Urban-Reynolds 2021, Mueller 2020). As of 2016, nearly 75% of HTFs in the U.S. are in states with specific legislation supporting HTFs (Brooks 2016).

• Does your local HTF program have partnerships with other organizations with a vested interest in creating additional affordable housing, such as service providers, faith-based groups, banks, non-profit developers, housing advocacy groups, or unions? Are representatives from these groups on your HTF’s oversight board? Do members of the HTF oversight board reflect the community's priorities?
• Has your community tried a public campaign to create or increase support for a local HTF providing safe, affordable housing?
• What funding sources are available for your local HTF? Are you utilizing funding sources that require public ballots for approval? Can key stakeholders designate or increase funding for the HTF? How can you increase funding to expand the reach of the HTF in your community?
• What community priorities can be addressed with HTF resources? How will you assess if these goals are met?

As of 2022, there are more than 800 housing trust funds (HTFs) in cities, counties, and 49 states, which generate nearly $3 billion annually to support affordable homes (CCC-HTF). Washington, D.C.’s Housing Production Trust Fund is an example of a fund focused on a metropolitan area; since 2015, it has produced more than 6,000 units of affordable housing (DC-HPTF). Non-profit organizations may manage HTFs on a larger scale: the National Housing Trust (NHT) preserves and improves affordable housing in communities across 13 states and Washington, D.C. The NHT also works to promote energy efficiency and sustainability for residents with low incomes; the NHT approaches energy efficiency with a combination of policy advocacy, green lending, renewable energy, and sustainable development initiatives to reduce housing costs, improve housing quality, and reduce environmental impacts (NHT). State-level HTFs are often administered by governmental housing finance agencies (Scally 2012).

The National Housing Trust Fund (NHTF) is permanently authorized by the Housing and Economic Recovery Act of 2008 (NCSHA-HTF). The U.S. Department of Housing and Urban Development (U.S. HUD) allocates HTF funds annually to states and state-designated entities; all HTF-assisted housing units have a mandated minimum affordability period of 30 years (US HUD-HTF).

‡ Resources with a focus on equity.

ACEEE-Heating - American Council for an Energy-Efficient Economy (ACEEE), Smarter House. Home systems and energy: Heating systems.

AIC-HTF - All-In Cities, an Initiative of PolicyLink. All-In Cities Policy Toolkit: Housing trust funds (HTF).

ChangeLab-Housing toolkit^‡ - ChangeLab Solutions. Preserving, protecting, and expanding affordable housing: A policy toolkit for public health. 2015.

LHS-HTF - Local Housing Solutions (LHS). Housing trust funds (HTF). New York University, Furman Center and Abt Associates, Inc.

LISC-Affordable housing^‡ - Local Initiatives Support Corporation (LISC). Helping neighbors build communities: Affordable housing.

US HUD-HTF - U.S. Department of Housing and Urban Development (U.S. HUD), HUD Exchange. Housing Trust Fund (HTF).

* Journal subscription may be required for access.

ACEEE-Heating - American Council for an Energy-Efficient Economy (ACEEE), Smarter House. Home systems and energy: Heating systems.

AIC-HTF - All-In Cities, an Initiative of PolicyLink. All-In Cities Policy Toolkit: Housing trust funds (HTF).

APA-Meck 2003 - Meck S, Retzlaff R, Schwab J. Regional approaches to affordable housing. Washington, D.C.: American Planning Association (APA); 2003: Report No. 513/514.

Beard 2021* - Beard V. City-level housing trust funds: Lessons from key case studies. Poverty and Public Policy. 2021;13(4):351-367.

Braveman 2022 - Braveman PA, Arkin E, Proctor D, Kauh T, Holm N. Systemic and structural racism: Definitions, examples, health damages, and approaches to dismantling. Health Affairs. 2022;41(2):171-178.

Brooks 2016 - Brooks ME. State and local housing trust funds. In: 2016 advocate’s guide: An educational primer on federal programs and resources related to affordable housing and community development. Washington, D.C.: National Low Income Housing Coalition (NLIHC); 2016.

CCC-HTF - The Housing Trust Fund Project, an initiative of the Center for Community Change (CCC). Housing trust fund (HTF) implementation information and resources.

Damewood 2011 - Damewood R, Young-Laing B. Strategies to prevent displacement of residents and businesses in Pittsburgh's Hill District. September 2011.

DC-HPTF - Washington, D.C., Department of Housing and Community Development. Housing Production Trust Fund (HPTF).

Federal Register-HTF - Federal Register. Housing trust fund (HTF). 2015.

Hernandez 2019* - Hernández D, Siegel E. Energy insecurity and its ill health effects: A community perspective on the energy-health nexus in New York City. Energy Research and Social Science. 2019;47:78-83.

Howell 2016 - Howell K. Preservation from the bottom-up: Affordable housing, redevelopment, and negotiation in Washington, D.C. Housing Studies. 2016;31(3):305-323.

Kaplan 2007* - Kaplan J, Valls A. Housing discrimination as a basis for Black reparations. Public Affairs Quarterly. 2007;21(3):255-273.

Larsen 2009* - Larsen K. Reassessing state housing trust funds: Results of a Florida survey. Housing Studies. 2009;24(2):173-201.

Lewis 2019 - Lewis J, Hernández D, Geronimus AT. Energy efficiency as energy justice: Addressing racial inequities through investments in people and places. Energy Efficiency. 2019;13(3):419-432.

LHS-HTF - Local Housing Solutions (LHS). Housing trust funds (HTF). New York University, Furman Center and Abt Associates, Inc.

Milwaukee-HTF - City of Milwaukee. Housing trust fund (HTF).

Mueller 2020* - Mueller EJ, Way HK, Wegmann J. Freefall: Why our housing safety net is failing the lowest-income renters during COVID-19. Journal of Affordable Housing. 2020;29(2):257-269.

NCSHA-HTF - National Council of State Housing Agencies (NCSHA). Housing trust fund (HTF).

NHT - National Housing Trust (NHT). The National Housing Trust protects, improves, and maintains existing affordable housing: Policy innovation, lending, real estate development, and energy solutions.

NHT-Energy - National Housing Trust (NHT). Energy solutions: Energy efficiency for all.

PRRAC-Haberle 2021 - Haberle M, House S, eds. Racial justice in housing finance: A series on new directions. Washington, D.C.: Poverty & Race Research Action Council (PRRAC); 2021.

Scally 2012 - Scally CP. The past and future of housing policy innovation: The case of U.S. state housing trust funds. Housing Studies. 2012;27(1):127-150.

Thomson 2015 - Thomson H, Thomas S. Developing empirically supported theories of change for housing investment and health. Social Science & Medicine. 2015;124:205-214.

Urban-McCargo 2020 - McCargo A, Choi JH. Closing the gaps: Building black wealth through homeownership. Washington, D.C.: Urban Institute; 2020.

Urban-Newman 2005 - Newman SJ. Low-end rental housing: The forgotten story in Baltimore’s housing boom. Washington, D.C.: Urban Institute; 2005.

Urban-Reynolds 2021 - Reynolds K, Lo L, Boshart A, Galvez MM. Federal reforms to strengthen housing stability, affordability, and choice. Washington, D.C.: Urban Institute; 2021.

US HUD-HTF - U.S. Department of Housing and Urban Development (U.S. HUD), HUD Exchange. Housing Trust Fund (HTF).

US HUD-NHTF grantees - U.S. Department of Housing and Urban Development (U.S. HUD), HUD Exchange. National Housing Trust Fund (NHTF) grantees: State agencies and state-designated entities.

WHEDA-HTF - Wisconsin Housing and Economic Development Authority (WHEDA). National Housing Trust Fund.