Housing trust funds (HTFs) are funds established by cities, counties, and states to provide dedicated, ongoing public revenue to support affordable housing. HTFs provide an important source of financing for affordable housing preservation and development, which may not otherwise be reliably funded by a jurisdiction’s budget. Safe and habitable affordable housing is essential to family well-being and community stability — yet most city neighborhoods remain deeply segregated, while Black and Brown people, disabled people, and other marginalized communities face significant barriers to securing safe, quality, affordable homes due to housing discrimination and systematic disinvestment in those same communities.
The goal of safe and affordable homes for all is a complex challenge requiring a range of different approaches and policy tools. HTFs play an important role in comprehensive equitable housing solutions by providing resources to projects that support long-term affordability and serve very low-income households, people of color, and other historically disadvantaged communities, including those in danger of displacement. The National Housing Trust Fund (NHTF) was a growing source of funding for state and local housing trust funds — allocating $739.6 million to states in 2022 after allocating $689.7 million to states in 2021. However, recent increases in interest rates have resulted in a decline in single-family mortgage loans and refinancing acquisitions by the Government Sponsored Entities (GSEs). Consequently, the NHTF's 2023 allocation has been reduced by over 50 percent. This substantial reduction in the 2023 allocation significantly falls short of the existing housing needs, making additional financing mechanisms critical to deliver on housing goals. The American Rescue Plan Act of 2021 is one important (though short-term) current source of funding for local housing trust funds (states, counties, and cities have until December 2024 to obligate their funds).
HTFs can be leveraged in a variety of contexts, including, empowering local jurisdictions to optimize the efficacy of other housing development funds, fostering the creation of new employment opportunities, or acting as a buffer against displacement stemming from housing development activities. Moreover, they facilitate the allocation of novel revenue streams from burgeoning industries to bolster housing outcomes. Beyond this, HTFs can serve as catalysts for generating localized economic advantages by leading to increased sales taxes, income taxes, and property taxes. In addition to the PolicyLink resources listed on the right, see the Housing Trust Fund Project at Community Change and the Housing Development Consortium for more resources on housing trust funds.