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Proposed trust fund will help families afford housing

Congress is considering legislation to provide necessary new financing for affordable housing. This would be most welcome for a growing number of people in Pierce County who cannot find an affordable place to live.

By normal standards of affordability, a household should not pay more than 30 percent of its income in rent and utilities. By those standards, 44,000 Pierce County households surviving at the county’s lowest incomes can afford to pay no more than $450 per month in rent. Yet there are few apartments or homes available at that price.

The median rent for a one-bedroom apartment on the private rental market in Pierce County is $619 per month. In order to afford to rent even a modest one-bedroom home in Pierce County, the household income has to be at least $24,760 a year. In Washington, there is a shortage of roughly 149,000 rental homes that are affordable and available to extremely low-income families.

This shortage exists across the country. Nationwide, there are 9 million extremely low-income renter households and only 6.2 million homes renting at prices they can afford. This is a shortage of more than 2.8 million homes.

While higher-income people may have trouble affording homes they prefer, extremely low-income households are the only income group for whom there is an absolute shortage of homes.

The consequence is that the lowest-income families must spend more than they can afford for housing. In fact, 71 percent of all extremely low-income renter households in the United States – and 70 percent in Washington – pay more than half of their income for their homes.

Spending most of household income for housing means there is not enough left for other basic necessities, forcing families to choose between paying the rent and buying food or medicine or paying for heat. Certainly, they are not able to save for the future. The ultimate consequence of the housing shortage is, of course, homelessness.

This is not a problem that can be solved by the private housing market alone. If a profit could be made in building and operating housing that extremely low-income families could afford, the market would have long ago responded to this acute need. As with other market failures in the provision of basic needs, public investment is required.

In the past 20 years, more than 600 state and local governments have formed housing trust funds that now total $1.6 billion in annual investments. The state of Washington Housing Trust Fund was funded at $130 million for the 2007-2008 biennium.

While this is a helpful increase from $100 million for the last biennium, the cost for affordable housing needed to house low-income families is closer to $360 million.

In recognition of this need, Congress is preparing a response. More than 5,600 national, state and local organizations, religious leaders and state and local elected officials have endorsed the establishment of a National Housing Trust Fund Campaign.

The campaign’s goal is a national housing trust fund with sufficient dedicated sources of revenue to support the production and preservation of 1.5 million homes for extremely low-income families over a 10-year period. National Housing Trust Fund legislation was introduced in the U.S. House of Representatives in June with bipartisan co-sponsorship.

Because most Americans live in nice homes we can afford in neighborhoods of our choosing, it is easy to take our homes for granted. But a moment’s thought to what it would be like to struggle each day to assure our families a place to live will make clear that this proposal to create a National Housing Trust Fund may be the nation’s most important housing initiative in a generation.

It could not come at a more urgent time.

Connie Brown is executive director of the Tacoma-Pierce County Affordable Housing Consortium.

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