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Why Tinker with the Housing Trust Fund?

By Doug Trapp · April 5th, 2001 · Burning Questions
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Will improved funding for low-income school districts come at the cost of housing programs for the poor?

School funding has center stage in the Ohio Legislature's budget battle, but housing advocates worry the budget bill could squeeze low-income housing projects.

The Ohio Housing Trust Fund, which awards more than $20 million in grants each year to help low income residents afford decent housing, could change in ways that make it harder to serve the people the program was designed to help.

The Ohio Development Department (ODD) and Gov. Bob Taft inserted the changes in the budget bill. The proposals include eliminating a five percent cap on ODD's administrative expenses for the program, reducing non-profit agencies' share of grants from a minimum of 45 percent to a minimum of 30 percent and, perhaps most significantly, giving preference to programs that can repay grants.

The changes seem to indicate a move to make the fund more self-sustaining, according to Bill Faith, executive director of the Coalition on Housing and Homelessness in Ohio (COHHIO) and chair of the Housing Trust Fund Advisory Committee. But the Trust Fund was created to aid projects that can't pay for themselves.

For example, the Southwest Ohio Council on Aging used a $130,000 grant to complete 109 home repairs for low-income senior citizens between July 1998 and June 2000, according to Arlene de Silva, the agency's manager. More than 70 percent of her clients are female heads of households, and 14 percent have problems with physical mobility.

Asking for repayment would impair affect the agency's ability to do this work, she says.

"You're talking about a needy bunch," de Silva says.

The legislature created the Trust Fund in 1991 following voter approval of a 1990 ballot issue.

How expensive is housing? A minimum-wage earner in Greater Cincinnati must work 83 hours to afford a two-bedroom apartment at the fair market rent of $416 a month, according to the U.S. Department of Housing and Urban Development.

Housing organizations have used the grants to build low-income apartments, help people with financial problems avoid homelessness and provide counseling for drug addiction.

Agencies in Hamilton County received 60 Trust Fund grants, mostly between $50,000 and $500,000, from 1993 to 2000. Last year the ODD added about $9 million to the program from unused grants and accumulated interest. The flood of requests that followed led ODD to shut down the program, Faith says.

"Even with $30 million, they have not been able to fund the number of projects that were waiting for funding," he says.

The proposed changes could become a point of contention in the budget bill, according to Ohio Sen. Mark Mallory (D-Cincinnati). Mallory, a member of the Senate Finance Committee, says he expects to introduce amendments to keep the program unchanged.

Faith says ODD bypassed the Trust Fund Advisory Committee.

"We were just never consulted," says Faith, who suspects the committee was left out because it would have opposed the changes.

Although the bill's specific language wasn't reviewed, ODD discussed with the advisory committee the ideas behind many of the changes, according to Doug Garver, assistant to the director of ODD. Garver says ODD understands the need for drug counseling and other programs, but legislators want them handled by Temporary Assistance for Needy Families -- the "reformed" welfare program.

The preference for programs that can repay is an effort to help as many people as possible, Garver says. As for repealing the five percent cap on administrative expenses, Garver says some of the responsibility for handling the Trust Fund has shifted to a different ODD subdivision with fewer staff members.

So far, Faith says, he hasn't met a state politician who supports the Trust Fund changes. Even private developers, who often partner with non-profits on Trust Fund projects, aren't for them, he says.

"I really don't know who they're trying to help with this," Faith says.

Lower than expected tax revenues have Taft talking about a four percent cut in state spending. The Trust Fund would be lucky to keep its projected $21 million in 2001-2 and $22 million the following year, essentially unchanged for the past few years. But that's a far cry from the $50 million originally intended for the program a decade ago and millions short of the requests ODD receives each year.



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