I’ve been told that “lots of people are mad” about my criticism of how the non-profit housing industrial complex operates. But almost never does anyone engage the criticism directly; one common theme I’ve heard from the proponents of the status quo is “it doesn’t work that way.” I’d put a recent email from the Department of Commerce in that category. Obviously we’ve got their attention. Oddly, this email simply confirms what I’ve been saying, that the process of Housing Trust Fund allocation is a political process that results in more money for urban areas represented by Democrats than rural areas. The suggestion here by the Department of Commerce is also bizarre: don’t look at the 8 years of data, just ignore that. Again, “it doesn’t work that way.” 

The numbers don’t lie: the poorest parts of the state with the fewest housing options and oldest housing stock are not getting enough resources while poorly governed Seattle is burning through subsidies. I pointed this out in a quick response citing census data that confirms this. But here is their whole email below. Tomorrow I’ll post some ideas about how to reform the Housing Trust Fund that would take allocation out of the bureaucracy at Commerce and more fairly distribute it.

April 4, 2018

Housing Trust Fund Stakeholders,

The Washington State Housing Trust Fund is dedicated to strengthening communities throughout the entirety of our state by helping them create and maintain affordable housing. Recent emails and blogs, which many of you have seen, raise questions about how projects are selected for funding, with some suggesting rural communities are not getting their fair share of state dollars.

We want to set the record straight by providing current information about how the Trust Fund works.

Housing Trust Fund (HTF) dollars support a wide range of projects serving a diverse array of low-income populations. While projects can serve people with incomes up to 80 percent of Area Median Income (AMI), the majority of projects serve households with special needs and incomes below 30 percent of AMI. Populations served include, but are not limited to:

• Homeless families
• Seniors
• Farmworkers
• People with chronic mental illness or developmental disabilities.

Most market rate units do not provide housing for people with special housing and supportive service needs, making Trust Fund-supported projects crucial to meeting this need in communities all over the state.

The HTF distributes funding throughout Washington. Historically, at least 30 percent of our competitive funding goes to rural areas. Distribution in a typical competitive funding cycle looks like this:

• Approximately one third of our funding goes to rural areas
• One third to King County
• One third to non-rural, urban areas outside King County, like Spokane, Yakima, Tacoma and Everett.

Additionally, the state legislature often chooses to make appropriations to individual projects in the biennial budget and directs the HTF to administer them. These direct appropriations are sometimes a large portion of the total HTF appropriation. For example:

• During the 2011-13 and 2013-15 biennia almost all of the HTF projects were direct appropriations for specific projects funded through the capital budget and identified in LEAP (Legislative Evaluation and Accountability Program) lists.
• Almost no funding was allocated for competitive funding cycles during these four years.

These directly appropriated projects are included in the total HTF portfolio and are administered by the HTF concurrent with competitively awarded projects. This makes HTF data and reports a combination of direct appropriated and competitive projects. The blended data cannot be specifically analyzed to draw conclusions about competitive awards.

Currently, the 2017-19 biennial budget includes 17 direct appropriation projects, making up $28 million of the $110 million total appropriation.

HTF awards are typically limited to no more than $3 million per project in order to ensure equitable distribution of funding statewide. There is simply more demand than funding available. The HTF must rely on other sources of funding to complete projects, otherwise most projects would be underfunded and would not materialize without other non-state contributions.

The Trust Fund historically has a solid return on investment. On average, $1 of state HTF investment is leveraged by $5 of investment from other sources, both private and public.

In rural areas, the HTF makes up a larger share of investment in projects. Costs to the state are much lower in urban areas where it is much easier to secure private investment and other funds. HTF is sometimes the only funder in a rural project.

Thank you for your continued work with the Housing Trust Fund. We appreciate your engagement.

For more information, please visit our website at http://www.commerce.wa.gov/building-infrastructure/housing/housing-trust-fund/

Or call us at: 360.725.2972