Good Neighbors


December 10, 2002


Housing Trust Fund needs a boost, the sooner the better

San Diego's Housing Trust Fund is but one way to tackle the city's current housing crisis. And you can bet on one thing -- if it is well funded, it will make a world of difference.

Hundreds of communities have created housing trust funds over the past fifteen years. San Diego's was one of the first and is considered a model for others. Recently, I was honored to address Los Angeles Mayor Hahn's housing summit, at which time our experience in administering a housing trust fund was explored for lessons L.A. could glean.

This is a compliment to the good work we have done here in San Diego, but it is worth noting that the Los Angeles fund of $100 million will eclipse in one year the $59 million we have spent over the twelve-year life of our San Diego fund.

So what is a housing trust fund? It is a distinct account that receives a continuous stream of dedicated revenues and commits them to expand affordable housing. Usually public revenues are tapped, but Silicon Valley built a $20 million housing trust fund (with more on the way) primarily through corporate donations. Businesses there see a housing trust as one tool to combat rising housing prices that are driving away so much of the workforce necessary to effectively run a company.

The value of a local housing trust fund is in its flexibility. Because it is designed without state or federal intervention, a trust fund can be shaped to address local needs, conditions and priorities. The city has control in defining who should benefit and what types of programs should be offered with minimal administrative burden. And funds can be used to leverage other loans and grants by providing needed local match.

According to Mary Brooks, director of the national Housing Trust Fund Project, "Housing trust funds represent one of the most innovative and promising new initiatives in this nation's struggle to address housing needs for all of its citizens." It is the flexibility of locally generated housing trust funds that is the root of their popularity, Brooks found in a recent study.

Turning our attention to the strength of San Diego's Housing Trust Fund is especially important now that the City of Villages plan has been adopted. The blueprint that will guide this city's growth for the next 20 years calls for a defined strategy to create compact, mixed-use developments that will function as mini-urban villages.

The Housing Trust Fund can be an effective complement to that plan. The range of housing types and prices envisioned for these villages cannot be realized without assistance. Zoning alone will not produce it. A vibrant housing trust fund can help finance rental housing development, help middle-income families buy homes and rehabilitate some of the older housing around the villages.

In this holiday season, it is important also to credit the role of the Housing Trust Fund in helping to create service-enriched housing opportunities to help formerly homeless families transition back into the mainstream.

But while our housing trust fund has established a reputation for effectively addressing many of our housing issues, right now it is woefully behind in the steady stream of revenues it needs to be effective in the long run. From a high of more than $9 million, the fund this fiscal year is projected to bring in a record low of less that $1.5 million -- and this during a declared state of emergency for housing. Finding innovative ways to ensure a steady stream of revenue so our Housing Trust Fund can do what it is supposed to do is extremely important.

The San Diego City Council initiated the fund in 1990 as a permanent and annually renewable source of revenue to partly meet the housing needs of the city's low- to medium income households. The problem is that all the revenue sources haven't been renewed annually, and what is there is not enough for the scope of our needs.

As has been said previously, there is no silver bullet that will cure our housing ills, and the housing trust fund is no exception. It is one of many tools, along with an appropriate land use and regulatory environment, employer assisted housing, and other initiatives that we are pursuing. What the Housing Trust Fund can do is help people with limited income realize that affordable housing is attainable for their families here in San Diego.

Dozens of speakers at recent City Council hearings, representing a broad spectrum of political views, agreed on one thing: the need to expand our housing trust fund.

What is the future for the San Diego Housing Trust Fund?

Since the 1978 passage of Proposition 13, impact fees have been an important tool in raising money for local services, including housing. New employment opportunities impact the housing market, so the Housing Trust Fund benefits from this demonstrated "linkage." But it is not enough.

The Transient Occupancy Tax, or TOT, was originally envisioned as a major source for the Housing Trust Fund due to the many lower wage jobs in tourism. But competition for TOT is fierce and it is now used to serve other needs. The same is true for redevelopment agencies' funds and the Community Development Block Grant.

Many communities look to a portion of the real estate transfer tax charged whenever property changes hands to partially fund a housing trust fund. Surcharges such as voters in San Diego County have authorized for transportation, can also be crafted for housing.

Other municipalities like L.A. realize the importance of trust funds and have come up with innovative ways to beef theirs up so it becomes a potent force in building affordable housing. Can we afford to fall behind? Can we maintain the quality of life in San Diego if our workforce relocates elsewhere?

We know how to do this; others look to us for advice. All that is needed is a broader funding base.

Morris is chief executive officer of the San Diego Housing Commission


December 10, 2002