Housing Fund Seen as Grassroots Victory

WASHINGTON - Advocates are
calling a new national trust fund to preserve, rehabilitate and build
affordable housing, including public housing, a major grassroots
victory and key step in addressing the needs of low-income people in
the United States.

There are 9.0 million
extremely low-income households in the United States and only 6.2
million homes renting at prices they can afford, according to the
National Low Income Housing Coalition (NLIHC). This is a gap of 2.8
million units for extremely poor households.

Some 37 million households spend more than 30 percent of their income on rent or mortgages, according to NLIHC data.

'We
had the broader foreclosure crisis and housing crisis. I think that
sort of awoke the larger affordable housing crisis to the rest of
America, not just for the effect on extremely low-income households,
but a broader sense throughout the country,' said Greg White, a policy
analyst for NLIHC.

The Trust Fund Campaign consisted of
thousands of individuals and organisations at the local, statewide, and
national levels. The NLIHC lobbied of members of Congress in
Washington, while community-based groups, such as homeless shelters,
homeless advocacy groups, and religious organisations, also created
local campaigns calling on their respective members of Congress to act.

'They
[the campaign] have been working on it since pretty much 2000,' White
said. 'The coalition was founded to make sure the lowest income people
weren't on the street and had a voice for federal housing assistance.'

In
recent years, housing authorities across the country have been
demolishing thousands of units of public housing, citing a lack of
federal funding for renovations. The availability of new funding could
undermine the agencies' arguments that demolitions are justified.

'Housing
generally as an issue was enjoying a boom for many years,' White
explained. 'The fact there was an affordable housing crunch, I don't
think it was on too many people's radars, but when the crisis started
affecting other people, that's when other people started to pay
attention to the problem.'

In late July, the U.S. House of
Representatives passed HR 3221, or The American Housing Rescue and
Foreclosure Prevention Act of 2008. The Senate passed the resolution
shortly thereafter, and Pres. George W. Bush, who initially expressed
opposition, signed the legislation on Jul. 30.

It marks the
first new housing creation programme specifically targeted to extremely
low-income households since the passage of the voucher and subsidised
housing programme known as Section 8 in 1974.

The legislation,
first introduced by Vermont Senator Bernie Sanders in 2001, marks a
significant domestic accomplishment for the Democratic-controlled
Congress, which also raised the federal minimum wage last year.

The
revenue for the fund would come from Fannie Mae and Freddie Mac, two
Government Sponsored Enterprises (GSEs) which provide a secondary
market for mortgages in the U.S. Fannie Mae and Freddie Mac will make
annual contributions to the fund based on a fraction of a percent of
each company's annual new business.

While Freddie Mac and Fannie
Mae are now facing financial difficulties, the fund was included in a
larger package of housing legislation that also provided financial
stability for the GSEs.

In 2009, the first year of enactment,
100 percent of the funds would be diverted to a Hope for Homeowners
programme, to cover losses the Federal Housing Authority might incur
refinancing troubled mortgages through the programme. This percentage
will shrink over the following two years, and in 2012, 100 percent of
GSE contributions will go the Trust Fund.

The Congressional
Budget Office estimated in July 2008 that the fund would raise 837
million dollars by 2018, White said. This could create or preserve at
least 837,000 new affordable homes.

Marcie Porter of the
Low-Income Housing Coalition of Alabama said her group's work on the
National Housing Trust Fund dovetailed with their efforts to have a
statewide trust fund as well.

'Our focus has been around the
state trust fund in Alabama. Hopefully, having a National Housing Trust
Fund would make it easier for people to understand the need for a trust
fund in our state,' she told IPS. 'We have gotten a lot done in our
state legislature, creating a housing trust fund task force and trying
to see what a trust fund might look like in the state.'

At least
75 percent of funds for rental housing in the new trust fund must
benefit extremely low-income households and all funds must benefit very
low-income households. At least 90 percent of all funds must be used
for rental housing.

The trust fund will be managed by the U.S.
Department of Housing and Urban Development (HUD), which will
distribute funds to states using a need-based formula.

States
will designate a state housing finance agency, housing and community
development entity, tribal designated housing entity, or any other
qualified agency to receive the grants.

'We went and presented
to all of our legislators in Washington about the need and benefits of
a National Housing Trust Fund and how it would be used. We talked about
our own trust fund in North Carolina where the money [may] end up,'
Chris Estes, executive director of the North Carolina Trust Fund, told
IPS.

'We got Congressional staff to tour housing developments to
see what had been done. We did a lot of work with our local members,
held statewide conference calls, to get them to contact their
representatives... and talk about housing in their communities,' Estes
said. 'We did a call to action when there were critical votes in the
House and Senate.'

In a celebratory email to supporters after
the fund's passage, Sheila Crowley, the NLIHC's president, wrote, 'It
has taken several years and many twists and turns along the way. Less
patient (stubborn?) people would have given up at several points along
the way. The forces of opposition were mighty and not always nice.
Overcoming many formidable challenges does make victory even sweeter.'