Housing Trust Fund Gains Support
The National Affordable Housing Trust Fund Act of 2007 (HR 2985), authored by House Financial Services Chair Barney Frank and formerly introduced toward the end of June, aims to construct, rehabilitate, and preserve 1,500,000 units of housing over the next 10 years. A likely source of funding is the proposed GSE Affordable Housing Fund (H.R. 1427), which would create a dedicated stream of funding, estimated at $1 billion a year, from an allocation of five percent of Fannie Mae and Freddie Mac profits to support affordable housing development nationwide. If approved, the national housing trust moneys could be accessed by state and local housing trust funds that provide at least a 50% match of federal funds. At least 75 percent of the funds expended must provide housing for families at 30 percent of area median income or below.
As covered in this blog this past spring, the GSE bill passed the House of Representatives earlier this year. Earlier this month, the bill received endorsements from The New York Times and the Atlanta Journal-Constitution. The text of these editorials is made available by the National Low Income Housing Coalition, a leading advocate of the legislation.
One sign of the importance of this legislation is the dwindling supply of existing affordable housing stock—all at a time when the need for affordable housing has never been higher, as a 2007 study from the Joint Center for Housing Studies at Harvard University attests. Making the need for affordable housing even greater is the fact that, as a recent article in the Washington Post explains, the existing stock of federally subsidized housing is gradually shrinking.
For instance, in Washington, DC and the neighboring states of Maryland and Virginia alone 26,000 units of project-based Section 8 housing are at risk of being converted to market-rate housing. The federal project-based Section 8 program provides subsidies to private landlords to provide affordable housing, provided they agree to keep their units subsidized for a specific period of time, typically between 20 and 40 years.
For many of these properties, the agreed-upon term is expiring. Rising land units often make conversions to market-rate housing attractive. Nationwide, there are 22,000 properties and 1.5 million units of affordable housing in this program. In recent years, in part because of preservation efforts by groups such as the National Housing Trust, most units have been preserved, but in the past 5 years, Maryland and Virginia alone have lost a combined total of 4,000 affordable housing units.
Posted by Steve Dubb on 07/16/2007 at 10:53 AM
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