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The right to criticize government is also an obligation to know what you are talking about. 
-Lent Upson, 1st Executive Director of CRC  

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Housing Trust Funds: Barriers and Opportunities
December 2009
Report 358

This report was prepared at the request of the Northwest Michigan Council of Governments and was funded in part by the Northwest Michigan Council of Governments and the Community Economic Development Association of Michigan.


The need for safe, decent rental and for-sale housing that is affordable to lower income individuals and families is characterized differently by various stakeholders. Low wage workers generally want to be able to live near the places where jobs are available; their employers often share this perspective. Seniors with reduced incomes want decent housing in safe neighborhoods. Elected officials in communities with poor quality housing want resources to improve that housing. Elected officials and residents in higher income communities, however, often do not want housing that is affordable to low income individuals and families. This long standing challenge has been exacerbated by the national recession that began officially in December, 2007; by high rates of home foreclosures; by reduced availability of credit; by the restructuring of the automobile industry; and by Michiganís highest in the nation unemployment rate.

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Michigan is struggling to recreate an economic base that is more creative, innovative, and diverse. Providing assistance to low income, but essential, workers to access affordable housing can strengthen communities and local economies. Increasing access to safe, decent housing for low income families can also improve educational outcomes for the children in those families. Providing structures and financing to assist communities and developers to create affordable worker housing attractive to creative class workers, immigrants, students, and others, could become part of the strategy to attract the new economy work force to Michigan.

A number of government programs attempt to address the gap between what the private market provides and what low income families can afford to pay for housing. Various strategies have been proposed and implemented at the federal, state, and local levels to increase the supply of adequate housing that is affordable for low income people. This paper will review income and housing cost data, survey federal and state housing programs for low income and special needs populations, and focus specifically on the challenging issue of providing funding for regional housing trusts.

Housing Trusts

Housing trusts are legal entities established to receive dedicated public funds to support affordable housing. They may receive public (and solicit private) funds for the production, preservation, or rehabilitation of forsale housing; the production, preservation, rehabilitation, or operation of rental housing; and a number of related activities. Depending on the needs and preferences of the area being served, housing trust funds may provide loans and/or grants for a one or more of variety of affordable and market rate housing needs:

  • Workforce housing
  • Preservation of existing affordable housing
  • Construction of new affordable housing
  • Foreclosure prevention
  • Lease-purchase programs
  • Down payment assistance
  • Homeownership education and counseling
  • Employer assisted housing
  • Emergency shelters
  • Transitional housing
  • Permanent supportive housing
  • Tenant based rental assistance
  • Project based rental assistance
  • Repair/rehabilitation of affordable housing
  • Land trusts
  • Individual development accounts
  • Elderly housing
  • Matching funds for federal or state programs
  • Predevelopment activities
  • Emergency rental assistance
  • Weatherization
  • Homeless services
  • Capacity building for nonprofit housing development organizations
  • Lead hazard control

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