LAKEPORT >> Establishing a regional housing trust fund could resolve an ongoing shortfall of available housing a county administrator informed the Lakeport City Council November 19.
Lisa Judd, a Lake County deputy administrative officer for housing, noted the county is in a housing crisis and residents can pool resources to resolve it. “It can access federal and state resources to increase housing. What a regional housing trust fund can do, is provide funding opportunities.”
She clarified at times investors can be challenged but if they together, the county and the two incorporated cities can provide a local project with 10% capital through a regional housing trust fund. It can make a difference whether a process goes forward or not. She added some mechanisms can be dedicated revenue resources (outside the normal budget process), which a trust fund can leverage, using borrowed money, specifically the use of various financial instruments- or borrowed capital, to increase the return of an investment.
“One of the reasons a regional approach is better is we can spend qualified, or matching funds, we otherwise might not be qualified for, as an example, a local housing trust fund is dollar-for-dollar match up to $5 million right now,” she said. “They don’t have it on the NOFA (Notices of Funding ability, under HUD) that has not come out, but once it does, it’ll serve as a conduit of funding.”
She went on to say that it would allow a local trust fund to have flexibility. “One thing with funding there’s restrictions, yet as a regional approach, we can have flexibility to decide what priorities are locally and how we want to address those priorities,” she said. Additionally, more benefits are likely with economic multipliers.
For example, say that a national government enacts a $1 billion fiscal stimulus and that its consumers’ marginal propensity to consume (MPC) is 0.75. Consumers who receive the initial $1 billion will save $250 million and spend $750 million, effectively initiating another, smaller round of stimulus. The recipients of that $750 million will spend $562.5 million, and so on, according to the website, www.investopedia.com.
Such multipliers often create jobs, new construction and rehab of existing homes, meanwhile grant acquisition for development of affordable housing stimulates housing innovation, which is needed locally especially in the wake of wildfire activity in recent years, noted Judd. An implementation “next step” can be, create a regional housing trust fund tailored to the community, which would be guided by an administrative board of trustees, based on the Lake County Housing Implementation Plan and respective city housing plans.
In fact, Trust Fund 417 was established and now has a balance of $2 million, including $1 million received from American Recovery Plan Act funds. And Judd estimated $100,000 could come from the Transient Occupancy Tax (hotel) fund. Another contributor according to this proposal could be the incorporated cities, with Clearlake contributing $10,000 and Lakeport, $5,000. Additionally, the region needs to seek out private resources, grant opportunities, and support from the Mobile Housing Trust Fund and the National Trust Fund grant.
“What these initiatives do is assure reduction of the cost of borrowing,” Judd said. “So, low interest loans increase ability of local nonprofit developers to overcome obstacles to build.” This will also provide housing to lower income levels and allow homeowners to retain resources to repair their homes and reserve the stock of affordable housing in the community.
Judd further explained a regional housing trust fund would be under the jurisdiction of Lake Couty if proposed and would establish annual reporting procedures and enter into a legal trust. It is expected Lake County will be tasked with administering the regional housing trust fund. “And looking at the housing trust funds throughout California; there’s a multitude of types but they’re all a little bit different,” she said. “In all my research I’ve seen nothing but positive outcomes in housing. And one of the best parts of a housing trust fund is the collaboration shared between city and county so, we can pool our recourses and better address the housing need.” Also, the cities and county websites developed, are designed to easily access locations of where space is available for builders to construct.
City Manager Kevin Ingram noted that Lakeport and Clearlake receive different funding amounts yet even the largest of theses resource pools are not big enough to complete a housing development.
“But this (model) of a regional trust fund would be an opportunity to control our own destiny,” he said. “And it’s the kind of process we need for our region. But early on, I think Lisa was reticent putting another joint power authority together. And when we see the little resources we can put toward a project, we get stuck funneling allocations toward administrative tasks. So, bringing on additional partners is a best approach.” No action was taken on the proposal.
