Issues
Housing Trust Fund
Voluntary Inclusionary Zoning
Employer Assisted Housing
Manufactured Housing
Restrictive Zoning Codes and Fees
Housing Trust Fund (HTF)
Recommendation: Adaptation of model HTF programs at local, state, and national levels will provide additional and effective funding to house working families in the region.
Both Missouri and Illinois have dedicated funds to support affordable housing initiatives. Funding for HTFs varies throughout our region, with recording fees, real estate transfer taxes, and dedicated use tax revenues among the sources. In Missouri, the state legislature created the trust fund in 1994 to help meet the housing needs of very low income families and individuals. The trust fund, administered by the Missouri Housing Development Commission, is supported by a $3 recording fee on all real estate documents filed in the State of Missouri. Annual funding has been approximately $4 million during the past few years. A bill proposed in Missouri in 2007 and in 2008 would have raised the recording free from $3 to $10, but it did not pass.
With the revenue from the state’s real estate transfer tax, the Illinois Housing Trust Fund has been able to support nearly 20,000 housing units with almost $100 million in funds since its inception in 1989.
Additionally, St. Louis City and County each have Housing Trust Funds with the city’s based on a use tax and the county’s based on recorded document fees. While both city and county are commended on having dedicated funds to address this community concern, they also have their weaknesses. The county fund generates few dollars and the use of these dollars is restricted to provision of homeless services, not housing development.Though not the original intent, the city’s Housing Trust Fund has been capped at $5 million dollars annually with additional raised money being diverted to other city functions. These dollars, like the Missouri state funds, are focused on very-low income families in the region earning below 60 percent of area median income.
Currently, there is no National Housing Trust Fund, though there have been efforts at creating one for many years. In 2007, the House of Representatives passed a bill that would establish a National Housing Trust Fund. Legislation is currently being negotiated between the House and the Senate.
For more information:
The National Low Income Housing Coalition |
Policy Link |
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Voluntary Inclusionary Zoning
Recommendation: For a municipality to receive state incentives, it should be required to show that it is taking active measures to increase the affordable housing units in new construction in the community. For this to happen, state legislation is likely needed, which would require municipalities to assess their affordable housing needs and present a plan for how they will meet those needs to be eligible for state financial incentives.
Inclusionary zoning (IZ) has been implemented in some communities across the nation as a means to increase affordable housing units in new construction. The purpose of IZ measures is to allow the development of affordable housing as an integral part of other development taking place in a community. There are several types of inclusionary housing policies, some mandating inclusion of affordable housing units with each new development of rehab and some asking for voluntary participation by communities. Whether voluntary or mandatory, some programs offer incentives and some do not. Incentives may include:
- density bonuses,
- waiver of impact fees,
- local tax abatements,
- subsidization or provision of infrastructure for the developer, or
- “fast track” permitting.
Example:
To retain young workers and to protect the state’s tax base,
Example:
One of the most successful voluntary inclusionary zoning programs is in the town of
For More Information:National Association of Realtors-Field Guide to Inclusionary Zoning |
Business and Professional People in the Public Interest-Inclusionary Zoning Policy Briefs |
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Employer Assisted Housing (EAH)
Recommendation: More employers across the region should include a housing benefit for their workforce.
Employers’ need for a reliable, productive workforce drives the success of Employer Assisted Housing programs. The concept of employer sponsored housing is not a new one. In the 1880’s companies built so-called “company towns” to provide affordable housing for an industrializing economy. But a new form of employer assisted housing began to surface in the 1990s. Housing groups and agencies, together with motivated employers, have begun to develop new types of employer assisted programs today.
Programs typically involve the following features:
- Employers provide down payment home ownership assistance in the form of second mortgage loans that are usually forgivable after a specified period of time or employment.
- Restriction to a defined geographic area in order to promote workers living in proximity to their jobs.
- Provision of some level of income qualification, but typically up to 120 percent of area median income.
- Home ownership counseling.
- Administration of the program often being “outsourced” by employers to a mortgage lender or housing agency.
In the St. Louis region, a regional consortium exists to promote Employer Assisted Housing and make it easier for small and mid size companies to participate. Partner in the consortium includes Beyond Housing/NHS, a nonprofit who will take all the paperwork responsibilities off the shoulders of corporate HR staff. Beyond Housing/NHS will also provide company employees with housing information and pre-purchase counseling as well as walk them through the entire process. Freddie Mac has also been instrumental in this partnership and there are several lending partners ready to assist.
In Spring 2007, the Housing America’s Workforce Act was re-introduced in Congress to support employer-assisted housing nationwide. Modeled on the Illinois Affordable Housing Tax Credit, this bill proposes a 50 percent tax credit (against one’s federal income tax) for every dollar an employer spends on the EAH program, makes the down payment assistance tax exempt (for the employee), and provides financial support for nonprofits that facilitate the program.
Join our effort to support the Housing America’s Workforce Act (Join Us!)
For more information on how your company can offer housing benefits through the consortium contact Nikki Weinstein, Policy and Community Engagement Director at FOCUS St. Louis (nikkiw@focus-stl.org)
More information:
Employer Assisted Housing: The Business Case|
Regional Employer-Assisted Collaboration for Housing (REACH) Illinois |
Manufactured Housing
Recommendation: Manufactured Homes should be included in the mix of local housing stock throughout the region.
Factory-built homes are a viable affordable housing solution not readily accepted by the general public. Throughout the past decade, the rate of growth of the manufactured housing industry has been dramatic. Manufactured homes now account for nearly a quarter of all new single-family housing starts according to the U.S. Census Bureau. Affordability is a key factor in the growth of manufactured housing and one of the main reasons increasing numbers of consumers are choosing a manufactured home.
In addition to its affordability, today’s manufactured homes are energy efficient and offer the quality, value, and technologically-advanced features that homebuyers desire. Today’s manufactured homes are not the “mobile homes” of the past. When sited next to a traditionally-built home and attached to a foundation, a manufactured home is often indistinguishable from other homes.
Manufactured housing costs approximately $200 less per month than site-built housing. Owners of manufactured housing typically carry considerably lower mortgage debt averaging $23,955 compared to site-built debt averaging $69,227 (U.S. Department of Housing and Urban Development, 2002). Therefore, St. Louis regional communities should more seriously consider the use of factory-built homes to meet their workforce housing needs.
Perhaps the largest barrier to inclusion of factory built housing in communities is community members concerns regarding inclusion of them, believing their own site-built housing value will be affected. However, research shows that home values are not negatively affected by the inclusion of manufactured housing as long as the homes fit with the existing nature of the neighborhood. Since manufactured homes are titled as real property the homeowners are assessed at the same rate as the owners of site-built homes.
Manufactured Housing Institute | Contempri Homes | Fuqua Homes | Back to top
Restrictive Zoning, Codes, and Fees
Recommendation: Planning, Planning, Planning—this is the key to effectively creating and maintaining workforce housing in the St. Louis region. Each local municipality should be assessing the needs of their workers, looking at existing housing stock, and determining what actions need to be taken to meet the ever growing need for workforce housing.
Ordinances often contain land use and zoning restrictions that increase the cost of housing, thereby excluding many people from any geographic area governed by such laws. Changing regulations such as minimum lot sizes, minimum home area sizes, sidewalk and street width requirements, and façade requirements would allow homebuilders to build less-expensive homes in many neighborhoods.
In addition, duplicative or time consuming design review processes and approval processes inhibit development as well as add unnecessary cost to housing. Missouri and Illinois state legislatures should prohibit duplicative government requirements and inspections. Until such a time when this legislation may be enacted, local municipalities should opt to monitor themselves by not allowing duplicative requirements and inspections.
The adoption of new building codes designed to provide safer and healthier habitation, including but not limited to “gold-plated” land development standards, often create unintended opposite effect. Every regulation, however costly, comes in theory with a well-intended purpose. Yet, there is a trade off. The concern is that countless people cannot afford safe, decent housing with the new code requirements adopted by building commissions in the region. Should a home built in the 1930s need to be rehabbed to meet today’s housing code standards? Doing so is so costly that it doesn’t happen, leaving such housing uninhabitable. The cumulative effect is greater density of run-down structures, while older housing stock is replaced with newer, albeit safer and healthier, options. Those previously living in the older, “harvested” housing stock must now seek housing alternatives that may be substandard, because the new housing is not affordable to them. Housing codes should certainly continue to address safety for its inhabitants. Codes and restrictions that go beyond basic safety must be more closely examined, though. It is up to each individual municipality to decide which housing codes will be, and should be, followed in their community. Municipalities should invest in the time and expertise to closely examine the housing codes and decide which ones they will apply. The costs and benefits to the overall goals, including health and safety for residents and affordable housing needs, should be taken into account. The American Planning Association has guidelines that may be of assistance to communities as they address this issue.
For more information:
U. S. Department of Housing and Urban Development | The American Planning Association | Back to top
