Affordable Housing Trust Fund Considered

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Thursday June 12, 2014

In the fall of 2013, chair of the Affordable Housing Committee John Simson, came before the city council with the results of an initial study and report called “The Path to Sustainability.” The report addressed the limited availability of affordable housing for lower and moderate-income residents in the city and the need to find ways to increase the supply. As a means to achieve this aim, the report recommended that the city consider developing an Affordable Housing Trust Fund, which is a public sector tool used to direct financial resources to the development of affordable housing for low income households. Three other Vermont municipalities- Charlotte, Burlington, and Montpelier - have used this type of fund successfully. 

At the June 2 meeting of the city council, Simson and his fellow committee members suggested the council create a South Burlington Affordable Housing Trust Fund and identify one or more funding sources in order to address the shortfall in housing for households in the 50-80 percent median income range. Fellow committee members Helen Riehle, Sandy Dooley, Gretchen Calcagni, Eric Farrell, James Knapp, and Larry Michaels were present; Ken Schatz was not present.

Several councilors expressed concern about authorizing the development of a trust fund prior to the establishment of a funding source. Riehle said she did not want to lose sight of the next steps to the process particularly with regard to funding. Riehle also noted that education and outreach will be necessary in order to explain why the trust fund is important, before determining funding sources. The committee agreed and cited that strong partnerships with non-profit housing developers, private developers, and housing advocates would be necessary to the fund’s success in addition to ongoing public outreach to dispel inaccurate negative perceptions about affordable housing.

Committee member Farrell said, “I think we need to create the fund even if it’s not funded’s a show of support by the council...I don’t think the conversation should be about the money, but about the goal of establishing affordable housing.” 

While the committee has identified potential funding sources, they suggested the council appoint a three member advisory board to oversee the fund, issue guidelines for allocation of funds, review proposals for fund commitment, and make recommendations to the council for funding. The feasibility committee has identified many potential funding sources. These included: adding a penny to the property tax rate (which would require a city vote), designating a portion of the local options tax for the fund (which would require a charter change), adding an additional percent to the rooms and meals tax, and payments by private developers in lieu of building affordable units under future inclusionary zoning regulations in areas outside of City Center. 

The establishment of a trust fund was not warned as an action item on the council agenda; therefore, Helen Riehle made the motion to direct City Manager Kevin Dorn to draft a resolution creating a South Burlington Affordable Housing Trust (SBHT). She also made the motion to create a citizen committee to review and research potential funding options to be reported on within four months. Pat Nowak seconded and the decision was unanimous. 
Stay tuned!

SOURCE: Corey Burdick, Correspondent