There appears to be a lack of understanding in the community about what the trust fund does. The council hoped to be able to distribute $3 million to $5 million annually across three priority areas:
• One-third for home ownership
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• One-third for rental preservation or development
At least 10 percent of the funds would serve people with special needs. A trust fund board of directors was established to oversee the projects and the use of the funds.
From the beginning, a dedicated source of funds for the housing trust fund has been difficult to achieve. Developers of condo conversion projects were asked to pay $100 per unit into the trust fund. Unencumbered proceeds from city land sales were also designated for the fund. These sources of funding have become negligible in the current economy.
Homeownership nationally is about 69 percent. In Tucson it is 54 percent, far below the national average. The housing trust fund enables more people to afford a home which helps to solve the housing crisis in the community.
Some members of the community cannot afford the down payment for a home, but they are able to make monthly mortgage payments. The trust fund provided down payment assistance at 2 percent interest for employees of schools and hospitals so that they could afford to live closer to their work.
This reduced their transportation costs, leaving more of their paychecks in their pockets. Stephen Young, an attorney with Snell & Wilmer and chair of the city’s trust fund board, says the default rate on down payment assistance loans is close to zero.
By 2010 the city will have 50,000 units of housing that are 50 years old. Many of these are occupied by low income seniors who can no longer maintain the homes and are in need of assistance. By making repairs using the trust fund, these people can remain in their homes. This helps to keep neighborhoods stable and active. And it provides jobs for those making the renovations.
Not everyone wants to own a home. It is important that safe and secure rental properties are available. Developers could leverage funds from the housing trust fund which would enable them to get other funding to renovate housing units and still keep the rents affordable.
This is especially important as we redevelop our downtown. It is good for the community to have people in their preferred type of housing. The trust fund was designed to assist with this.
Some in the business community have been unhappy with the trust fund because of the city’s push to gain 1 percent point of sale contributions for the trust fund from both commercial and residential projects requiring a development agreement. Both parties must agree and negotiate such a transaction to determine what works in the best interests of both the developer and the city.
Jerry Dixon and Adam Weinstein of the Gadsden Company voluntarily agreed to a housing trust fund contribution in the development agreement for their West Congress Street mixed-use development being built on city land. They did so because they felt it was good for business.
“Everybody in the community must work to solve this problem of making housing more affordable for more people,” said Albert Elias, director of Neighborhood Resources and Community Services for the city. “The housing trust fund promotes housing affordability.” It is good for business and good for the community.
Contact Carol West at cwwfoster@aol.com. West served on the Tucson City Council from 1999-2007 and before that worked as a council aide from 1987-1995.
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