This piece is part of our series, Policy Actions for Racial Equity (PARE), which explores the many ways housing policies contribute to racial disparities in our country.
In Atlanta, the Housing Help Center(link is external) assisted 291 households to secure stable housing in 2024 and continues to receive thousands of applications from low-income residents who need housing support. The Center, which launched in 2024 with funding from Atlanta’s Affordable Housing Trust Fund, serves low-income households across the city as a centralized hub for accessing affordable housing services.
The Housing Help Center and other similar initiatives across the country demonstrate the pivotal role that housing trust funds play in expanding housing resources and opportunities, as well as motivating policymakers to broaden their scope to address the housing crisis. At face value, establishing a housing trust fund (HTF) is a simple strategy. Yet HTFs — flexible, government-established sources of public funding dedicated to supporting affordable housing — offer a powerful tool with support across the political spectrum to enhance affordable housing opportunities for those most in need.
How Housing Trust Funds Work
HTFs, which can be established at the federal, state, county, or local levels with funds deployed to address the specific housing challenges identified by each community or municipality, first appeared as a strategy to expand affordable housing development and preservation in the 1970s. Mary Brooks of the Center of Community Change led the HTF movement and helped establish the Housing Trust Fund Project(link is external) in 1986 to serve as an information hub for HTFs and provide resources to support government leaders across the country in their endeavors to create HTFs.
The flexibility of HTFs extends to financing also, with common financing sources including general budget allocations and dedicated public revenues from developer fees, real estate taxes, and other housing-related fees. These funds are typically distributed or awarded to entities that are overseeing housing projects through competitive application processes, existing programs, or on an entitlement basis.
According to the National Low-Income Housing Coalition — which now manages the Housing Trust Fund Project — there are currently about 845 state, city, county, and multi-jurisdictional HTFs across 49 states, Washington, D.C., Guam, and Puerto Rico. The HTFs included in NLIHC’s total generate $1.6 billion annually to address housing needs in every corner of the nation.
At the state level, trust funds leverage an average of nearly six dollars in public and private funding per every dollar invested by the state. Federal policymakers modeled the national Housing Trust Fund, which was created through the Housing and Economic Recovery Act of 2008 (HERA), after state housing trust funds to better support disadvantaged populations.
How HTFs Support the Needs of Vulnerable Communities
News on the housing market is saturated with stories of the growing precarity in the construction industry due to rising costs and limited availability of skilled labor, developable land, and building materials, as well as increasing uncertainty about future costs related to tariff policies. Low-income renters, who tend to be older adults, people with disabilities, and people of color, are disproportionately impacted(link is external) by the nation’s affordable housing shortage, as they have the least access to progressively higher-cost opportunities for renting and homeownership. HTFs serve as critical tools for overcoming barriers to increasing housing supply, as well as expanding options for these marginalized communities. Every state, county, or locality develops administrative and funding distribution guidelines when they create an HTF and can prioritize funding for certain communities and household types.
According to NLIHC’s survey(link is external) of state and local HTFs, over 50% of the respondents targeted households earning 50% or less of the area median income for their funds. In addition to focusing HTF support on extremely low- to low-income households, many HTFs create budget set-asides for historically disadvantaged communities and special populations, such as older adults, rural community members, people with disabilities, those experiencing homelessness, and those involved in the criminal legal system. Additionally, communities have found ways to utilize HTF funding to support innovative housing solutions that tackle challenges disproportionately impacting households in communities of color, such as high levels of displacement risk(link is external), limited access to homeownership opportunities(link is external), and issues of tangled titles with heirs’ property(link is external).
HTF funds are used for a wide range of housing-related activities, including financing gaps for acquisitions, new construction, rehabilitation, and preservation; covering emergency repairs and necessary housing modifications; providing technical assistance for affordable housing developers; and exploring innovative strategies to address housing needs. In some cases, HTF funds can even be used for rental assistance; foreclosure prevention; homelessness services; and for scaling creative housing solutions, such as tenant/community opportunity to purchase policies, and community land trusts.
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Father and son contractors use Georgia Ports Authority and other SAHF to construct a house for sale to a first time Savannah homebuyer.
Housing Trust Funds that Strengthening Housing Stability
Several HTFs across the country exemplify best practices for naturally incorporating equity into HTF support for housing projects that create sustainable housing opportunities for all.
- The Savannah Affordable Housing Fund (link is external)(SAHF), a local HTF in Georgia, is creating housing opportunities for vulnerable community members. SAHF supports typical HTF activities, while also implementing the Housing Savanah Action Plan and administering the city’s 1K-in-10 initiative. The 1K-in-10 project aims to use $10 million in Special Purpose Local Option Sales Tax revenue to acquire and redevelop 1,000 blighted and abandoned properties across the city over the next ten years. SAHF is working with the Savannah-Chatham Land Bank Authority(link is external) to keep redeveloped properties affordable for community members and resolve tangled title issues for heirs with inherited properties they cannot rehabilitate themselves.
- The Washington State Housing Trust Fund(link is external), one of the nation’s earliest established HTFs, maintains an overall commitment to serving low-income households that are at risk of housing insecurity in diverse communities across the state. Additionally, the Department of Commerce, which oversees the fund, further directs funds to underinvested communities through a statutory requirement (link is external)to allocate a minimum of 10% of the HTF funds to organizations that serve or are led by historically marginalized groups, including individuals experiencing homelessness, people of color, and members the LGBTQ+ community. The state has established additional programs that can be leveraged with HTF funding, such as its Capacity Building, Outreach and Support program(link is external), which provides organizations serving households in communities disproportionately impacted by the nation’s history of discriminatory policies with technical assistance, and the Community Reinvestment Project(link is external), which provides organizations with funds to increase homeownership opportunities for communities systemically harmed by historic federal drug laws.
- In Florida, the State Housing Investment Partnership(link is external) (SHIP) program offers another prime example of how HTFs are expanding affordable housing access in communities of color without an explicit directive laid out in state statute. The state’s local housing trust fund program is one of the two that were established by the William E. Sadowski Act in 1992. The SHIP program distributes funds that are collected through a documentary stamp tax to all 67 counties and 55 cities in the state to use toward accomplishing the goals detailed in their Local Housing Assistance Plans(link is external) (LHAPs), in which local leaders outline their specific housing priorities. Florida is currently the only state with an HTF that allots funds on an entitlement basis, where counties receive a minimum annual allocation of $350,000 that municipalities take a portion of based on their population. According to a recent stud(link is external)y, this funding mechanism significantly supports low-income households of color and provides them with greater access to private mortgage capital. The SHIP funds help Florida build housing equity for households of color, while demonstrating the benefits that disadvantaged communities can experience if localities have more control over how housing funds are distributed.
The Future of Housing Trust Funds
Over the past 50 years, HTFs have had a significant impact on the affordable housing industry. From laying the foundation of the current housing trust fund movement through early adoption in states and localities, such as California(link is external), Arizona(link is external), and Boston(link is external), to steadily increasing fiscal commitments to affordable housing projects through trust funds in cities, such as Philadelphia(link is external), New Orleans(link is external), and Nashville(link is external), dedicated funding for affordable housing is clearly a necessity in the fight to address the nation’s housing crisis.
While many state and local governments are already taking advantage of this strategy, opportunities exist for current HTFs to strengthen their impact and for more jurisdictions to establish new trust funds. To ensure that new HTFs can effectively provide housing in vulnerable communities, communities need to identify innovative and sustainable funding sources that can support long-term affordable housing initiatives, such as real estate transfer fees or document recording fees, as well as invest in revolving loan programs for HTF funds to help close financing gaps for multifamily housing developments. With more intentional investment, HTFs could considerably improve housing opportunities for all nationwide.
We encourage all who believe in the need to create a just society to read, discuss, and share thePARE seriesas we learn and act to address the impacts of housing policies on racial equity in America. We also invite you to join us in this conversation, by suggesting additional topics and sharing resources for how we can advocate for greater racial equity. If you’d like to offer feedback on our body of work, please reach out to the Public Policy team. To stay up to date with critical housing policy news,subscribeto our bi-monthly Capitol Express newsletter.
This piece includes contributions from Beth Stephens, Alex Miles, and Jess Blanch.
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