You may have heard that city council has been discussing establishing an Affordable Housing Trust Fund. I want to talk a little about what that means.
Affordable Housing Trust Funds have been around for decades. They set aside money specifically to pay to acquire, rehab, or build affordable housing. They can be “evergreen” where they invest their principal and use some portion of earnings and interest to fund projects, or they can be funded annually.
The most common source of funding for local housing trust funds come from fees charged for private construction. The city already charges to connect new construction to city services, so these additional fees could be included in that total.
Winston-Salem could also raise money to kick-start the fund through a general obligation bond referendum, allocating funding through the general fund, or getting matching commitments from banks, pension funds, and other large investment funds that are looking for low but reliable investment returns over long periods of time.
The city could manage the fund itself, or hire another organization to manage it. Two organizations they’re considering are LISC and Self Help. There are a few benefits to hiring out this work.
- These organizations (particularly LISC) have managed hundreds of thousands of affordable housing units over the past 4 decades. They know how to get the projects done.
- The city is having trouble hiring current open positions – by hiring out this work we could get started faster.
- Experienced project managers could get projects done quickly and efficiently, saving the city time and money.
The city would establish a board of directors to provide oversight. This board would be appointed by City Council and consist of local community members, lenders, affordable housing advocates, and residents of affordable housing.
The City Council has visited other North Carolina cities like Asheville and Durham to learn how they developed and manage their funds. Assistant City Manager Patrice Toney is researching what the best path forward may be for Winston-Salem and she’ll present her findings to city council in the coming months.
I’ll keep you updated as we learn more about the trust fund. It’s a great step for the city and I commend City Council for supporting it.
Please reach out to me with any questions, ideas, or concerns. Thanks.