Housing Trust Fund Is a Worthy Concept

A task force of the San Diego Housing Commission--composed of representatives of business, labor, building and community groups--has come up with a bold plan to establish a $54-million-a-year trust fund to greatly increase housing for lower-income households--primarily those making $18,350 or less for a family of four.

That’s one in four households, a statistic that supports San Diego’s unfortunate title as America’s least affordable rental market.

The fund would be financed by five different taxes or fees: a commercial development fee, an increase in business taxes, a utility users surtax, a landscape and lighting fee and a portion of the hotel room taxes.

It’s an ambitious plan, and it would be a major philosophical leap for a city and region that traditionally has shunned publicly funded programs. But it is an idea worthy of very serious consideration.

For about 80,000 lower-income renter households, it has become nearly impossible to find safe, decent and affordable housing, according to the task force report.

The problem has many roots. San Diego stayed out of the subsidized housing business for years when federal funds were more plentiful. Then, shortly after San Diego started developing subsidizing housing programs, the Reagan Administration drastically cut federal housing funds. Meanwhile, land and housing prices here have skyrocketed.

As a result, the average two-bedroom apartment is now $250 or more a month beyond the reach of two minimum-wage earners in many areas of the city. And the waiting lists for subsidized housing are years long.

But it’s not just a bottom-rung problem. Single parents earning $6 and $7 an hour and more have trouble finding decent housing in the city. And only 21% of San Diegans make enough to purchase a median-priced home.

It has also moved beyond the arena of compassion and moral responsibility. It’s a problem that increasingly threatens the economic health of the city and the region.

Companies in the more expensive North City areas already are finding it difficult to attract lower-paid workers. Potential employees from outside San Diego sometimes are scared away by the high housing costs. And, if a concerted effort is not made to address the problem, companies and employees may move elsewhere.

These are powerful arguments in favor of the trust fund proposal. Even those who look at problems through less-government-is-better glasses should be persuaded to give the plan serious consideration.

The trust fund idea is not new. Several cities and states have started trust funds in recent years. And the rationale behind most of the proposed revenue sources makes sense. Businesses, especially those in the tourism and service industries, create jobs for people who need low-cost housing.

So the task force has proposed charging developers of commercial property between 50 cents and $2 a square foot to raise an estimated $12 million a year. Business taxes, which are among the lowest of the state’s largest cities, would also be raised, and part of the hotel room tax would be put in the fund because the tourist industry employs so many lower-paid workers. Other proposed fees include a landscape, lighting and park maintenance fee and a utility user fee to help spread the burden.

The task force estimates that every trust fund dollar would be matched by a dollar in private funds, primarily from bank loans and nonprofit organizations, and another dollar in existing state and federal funds, which could produce about 4,600 housing units a year. This would meet about a third of the need by the year 2000.

The plan is deliberately vague on the specifics of how this would be accomplished, other than to recommend that 10% of the money be used for transitional housing for the homeless, 60% for very low-income households, 20% for low-income households and 10% to help first-time home buyers who make no more than $36,700 for a family of four. Other cities have found that it’s better for the trust fund board to make specific funding decisions after weighing proposals from government, nonprofit and for-profit organizations.

For instance, in Washington state, a college and the department of social services linked up to rehabilitate a 20-unit apartment building to provide housing and child care and other support services to single mothers for two to four years while they attend college. The trust fund provided some of the money, and the rest came from a bank loan.

The trust fund concept is an exciting one. It won’t solve the whole problem. Neighborhood resistance to low-income housing will still have to be overcome, and some land-use policies may have to be adjusted. But the trust fund would be a major step in the right direction.

The Housing Commission and the City Council should endorse the concept. But the council should not determine the level of funding until it sees the report and recommendations of an advisory committee that is developing a long-term plan for financing some of the city’s other pressing needs, such as parks, street improvements, fire and police stations and more police officers. It is likely that some of the same revenue sources eyed for the trust fund also will be targeted by the long-term financing committee.

The council will have to weigh all of these needs before it can agree upon an intelligent financing strategy to correct longstanding deficiencies and to look toward future needs.

But housing must be at or near the top of that list of needs when the council formulates its overall plan.