If Utah's housing trust fund is to make a real impact on the low-income housing market, it must have a "committed and ongoing" funding source.
Advocates and a state housing task force hope legislators want a tax or fee - the most popular is a real-estate transfer fee - that would provide funding on a steady basis. Another recommendation is the use of the interest accumulated on real-estate escrow accounts for the fund.Utah is in the middle of a housing crunch and the people most affected are poor people, said Tim Funk, Crossroads Urban Center. Along the Wasatch Front the vacancy rate is less than 2 percent. And statewide about 40,000 households are on waiting lists for low-income, subsidized housing.
"In terms of all housing needs, we're in poor shape," Funk said. "It's more dramatic in urban areas, but rural areas are experiencing a crunch they haven't had since the small boom times in the early 1970s. There isn't a place in Utah where there isn't a critical housing need."
Since the Utah Housing Trust Fund was established in 1987, it has provided 173 loans totaling $3.9 million and worked with other programs to provide 450-500 housing units. Funding comes in at the rate of $10,000 to $15,000 a month from paybacks from the state-administered FHA housing-preservation program, the HUD-funded rental rehabilitation program, lapsing funds from the Legislature and a home account within the trust fund.
The money can be used to rehabilitate low-income housing units, provide matching funds for projects that provide housing to special-needs renters, shelters and transitional housing for the homeless and other programs that improve availability or quality of housing for poor people.
Many states have committed funds that annually far exceed Utah's total for its six-year history, said Mary Brooks, director of the Housing Trust Fund Project, based in California. Brooks was in Salt Lake City last week to discuss the importance of ongoing funding for housing trusts.
Money put into the trust funds can be leveraged to bring in about $5 for every $1 spent, she said. Utah is not typical; because funding is so low Utah is only bringing in $1 for each $1 invested. Most states have at least $5 million a year. Some states have $50 million or more - and many states use a real-estate transfer fee of less than $100 to generate revenue.
"It's a nominal amount, with no significant impact on the housing market," she said.
Although real-estate agents typically oppose a transfer fee initially, in states where the fee exists they have won acceptance. The agents get more work as a result and can refer people they cannot otherwise help, Brooks said.
The list of funding sources is long. Some states use the unclaimed funds. Others use the interest on unclaimed funds. Most states don't use bonds because that is not ongoing.
Utah's fund is set up to help with housing for people who have up to 80 percent of the median income, with emphasis on those at 50 percent or below. In most cases it is gap funding, put together with other resources like low-income tax credits to bring projects to fruition. It can provide the initial money that convinces banks to work on a project. Often, the trust fund is used as loans or grants, said Steve Erickson, Utah Issues housing specialist.
Although there's some disagreement over where the funding should come from, everyone seems to agree on one thing: Housing, for poor people, is unavailable. It's a major crisis.
"There's no overstating it," Funk said. "What's remarkable is that we're not more excited about it."