Housing Advocates Call for Dedicated Funding of State Housing Trust Fund

The creation of the Pennsylvania Housing Trust Fund in 2010 came after years of effort by affordable housing and homeless advocates to get the state more involved in housing services for low- and moderate-income households.

This is exactly what the trust fund was designed to do. It created a framework for investing money in households below 50 percent of the median area income. Within the broad language of Act 105, which created the trust fund, this could mean buying land for an affordable housing development, paying for the construction of such a project, or providing financial aid for foreclosure prevention, rental assistance or homeless services.

But nearly four years since its creation, the trust fund is still missing a key component: dedicated funding.

Funding the Trust Fund

Act 105 was passed by the state legislature and signed by former Governor Ed Rendell in November 2010 following a hard-won compromise between the house and senate. No funding source was outlined in the bill. One provision that was debated created strict limits on where the funding could come from.

“When it came out of the house of representatives that year, it actually had a provision that it could never have funding, which fortunately the senate took out,” said Liz Hersh, executive director of the Housing Alliance of Pennsylvania — which has long advocated for a state housing trust fund.

It took until 2012 for the state to invest in the trust fund, and it came with qualifications that continue to limit its scope. The funds collected so far have come from impact fees levied on natural gas drillers. These fees were imposed by Act 13, a set of restrictions and standards for “unconventional” gas drilling. A portion of the revenue from the fees is designated for the housing needs of counties affected by the drilling. Parts of state not generating revenue from the fees, including all of Southeastern PA where gas drilling is limited or non-existent, have not benefited from the trust fund.

Hersh said that this method of funding reflects the Corbett Administration’s philosophy on taxation. “In there view it makes it more of fee than a tax,” she said.

But the Housing Alliance and other advocates have argued that dedicated funding would be well worth the economic benefits. In fact, a report by the consultancy firm Econsult, commissioned by the Housing Alliance, stated that every $10 million invested in the trust fund would create $23 million in economic benefit.

Most of these benefits would come from avoiding more expensive social costs such as sheltering the homeless, incarceration and emergency room visits, according to Hersh.

Support in Harrisburg

There is a bill in the state senate, sponsored by Elder Vogel, Republican from Beaver County, and Shirley Kitchen, Democrat from Philadelphia, that would put $25 million a year into the trust fund and be funded by a portion of the state realty transfer tax which currently goes into the general fund.

“Because of the crash in 2008, [real estate] transactions went way down and now they’re going back up again. So what we propose is to capture the growth in the realty transfer tax overtime,” Hersh said.

Philadelphia-based homeless nonprofit Project HOME supports the trust fund and has gotten behind the “Fund the Fund” campaign launched by the Housing Alliance.

“We see this as an opportunity to really get support from the state,” said Jennine Miller, director of advocacy and public policy at Project HOME. She noted that much of the government funding Project HOME receives now comes from the federal government.

Kirsh shares the conviction that organizations like Project HOME deserve more support.

“Philly has a pretty sophisticated, advanced and well established system for addressing homelessness,” said Hersh, adding that groups like Project HOME simply need resources.  “They know what they’re doing. They’re very skillful and respected and they get results. There are  a lot of organizations like that, they just can’t possibly meet the demand.”

Further Reading 

Econsult report “Potential of Economic and Fiscal Impacts of a Pennsylvania Housing Trust Fund”

Image via Housing Alliance of PA website