The Philadelphia Association of Community Development Corporations, the Philadelphia Affordable Housing Coalition, ACORN, and other housing advocates propose the creation of a Philadelphia Housing Trust Fund to:
A Housing Trust Fund is a dedicated source of revenue, set aside to address the housing needs of a community. The first Housing Trust Funds were established in the late 1970s, and there are now over 350 nationwide, raising a total of more than $750 million annually. In contrast, Philadelphia has historically relied almost exclusively on federal funding to support housing, particularly housing production. Declining federal support and inadequate state support have left us increasingly unable to address increasingly severe housing problems. Of the seven largest cities in the country, three have Housing Trust Funds, and only Philadelphia and Houston do not invest substantial local resources in housing production.
The Philadelphia Housing Trust Fund will provide nearly $15 million per year in new resources for housing and bolster the City's Neighborhood Transformation Initiative. NTI is an important and proactive move by the City to invest in neighborhood revitalization by laying the foundations for redevelopment. However, it is clear that additional resources are required in order to build on the vacant property being prepared for redevelopment. The Housing Trust Fund will provide the resources needed for the City to better address its housing needs.
The Philadelphia Housing Trust Fund's primary mission will be to support housing production - both rehabilitation and new construction - by non-profit community development organizations, including partnerships with for-profit developers. At least half of the Trust Fund will be invested in housing production. The Trust Fund will support mixed-income homeownership and affordable rental housing, and will increase the supply of visitable and accessible housing. This investment will allow Philadelphia to build and rehab about 275 homes each year, increasing housing production by roughly 60 percent, and will leverage up to $36 million annually in outside public and private resources that would not otherwise come to Philadelphia.
The Trust Fund will also support housing preservation, including basic systems repair and targeted efforts around existing or new developments or in specific neighborhoods. More than 900 homeowners will be aided each year. The Trust Fund will also support emergency grants to prevent homelessness and adaptive modification grants.
The Housing Trust Fund will support production and preservation of low- and moderate-income housing, affordable to families at or below 115 percent of Area Median Income (AMI). To ensure an equitable distribution of funding, half of the Housing Trust Fund will be used to help households with incomes of less than 30 percent of AMI ($20,000 per year for a family of four), and half for households earning between 30 percent and 115 percent of AMI.
The Housing Trust Fund will be administered by existing City housing agencies, with Trust Fund revenues coordinated with other housing and community development funding to maximize impact. To ensure accountability and flexibility, an Oversight Board, with equal representation from housing advocates and City officials, will monitor funding decisions and periodically review Trust Fund guidelines.
The initial dedicated revenue source for the Trust Fund will be a surcharge on document recording fees, expected to raise nearly $15 million per year. By the end of 2005, the Trust Fund Oversight Board will carry out a thorough study of the housing funding needs of Philadelphia and recommend additional funding sources. In addition, the City has already committed $1.5 million in NTI funds for the Trust Fund. The Trust Fund will have an economic impact of $85 million per year on Philadelphia.
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