2. MetroCOG workforce housing study

REGIONAL HOUSING FUNDS Housing "trust" funds began in the 1970's and as federal funding for housing was reduced; they grew in popularity with states and local governments. The Center for Community Change identifies 170 such funds. Typically, they are funded with public dollars. Recently, however, workforce housing funds are being established with both public and private funds (See private sector models.) One of the key features of trust funds is a dedicated source of funds, such as deed recording, deed transfer fees, or a permanent tax. The advantage of a dedicated source of funds is that it best enables the fund to leverage (e.g. borrow) investment dollars because it is a permanent source of income to repay lenders. Another source is PILOTs--Payments In Lieu ofTaxes~whereby developers of high-end developments pay into the fund instead of building workforce housing in their subdivision. Often, local governments annually appropriate funds for the trust. However this latter source is subject to subsequent reductions ifthere are political objections to a development that engenders NIMBY opposition. If it is multi-jurisdictional, some communities may feel the fund must spend its appropriation in that community rather than respond to the regional location demand or need. The advantage of local funds is that they are responsive to local and regional priorities. Examples are: o Target a particular income group. For example, the lowest one/fourth income that need housing subsidy, or workforce households in the 50-100% or 80-120% of median income. The targeted group depends upon the severity of the affordability gap in the region. o Produce new housing or modernize/rehabilitee existing housing. o Revitalize neighborhoods o Address the demand (help the buyer or renter), OR the supply side (provide incentives and subsidies to the developer). o Set specific targets or provide funds as development opportunities arise. 28 Linda S. Donnelly. /\.I.e.I'. ;\ ugust 2006