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Tucson Housing Trust Fund Status Report

Tucson Housing Trust Fund

    January 18, 2008

TO: Children, Families and Seniors Subcommittee

of the Mayor and Council

SUBJECT: Status Report on the Tucson Housing Trust Fund Citizens Advisory Committee (THTFCAC) and Initial Revenue Source Recommendations

On behalf of the Tucson Housing Trust Fund Citizens Advisory Committee (THTFCAC), I would like to thank Mayor and Council for granting us the opportunity to contribute to this new and exciting venture.

As background, last spring the Mayor and Council formed the committee and requested the THTFCAC to begin program implementation with available funding and to bring forth recommendations about recurring revenue sources to sustain the Trust Fund over the long term.

The Advisory Committee has met monthly, since August 2007, to develop revenue recommendations for Mayor and Council consideration to make the Trust Fund sustainable. During this time, the Advisory Committee has also allocated funding for the first Trust Fund projects within the Mayor and Council established guidelines. Those guidelines were to target THTF funding approximately 1/3 for home repair; 1/3 for homeownership and 1/3 to rental programs.

As background for the Subcommittee, the current Tucson Housing Trust Fund balance is $474,578. To date, a total of $385,000 has been designated for the following projects:

    Funding Commitments:

    Home Repair

      $75,000 was received from the Tohono O’ Odham Nation for the specific purpose of expanding homeowner occupied housing rehab.

      Homeownership

      $100,000 in down payment assistance to homebuyers who are earning between 80 to 100% of median income. These clients are over-income for the existing programs that use federal funds yet are still struggling to buy a home.

      Homeownership/Rental Programs

      In partnership with the University of Arizona Drachman Institute, dedicate $10,000 as a funding backstop to facilitate a self-funding Employer Assisted Housing Symposium. The Symposium is planned to be held on April 4, 2008. The Symposium will be targeted to leadership from the community’s larger corporations and businesses. The purpose is to stimulate their participation in the implementation of work force housing programs for their employees.

SUBJECT: Status Report on the Tucson Housing Trust Fund Citizens Advisory Committee (THTFCAC) and Initial Revenue Source Recommendations

January 18, 2008

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      $100,000 to be used as a challenge grant/s to employers who choose to implement an employer assisted housing program. This challenge grant will be announced at the symposium.

      Rental Programs

      The THTFCAC has reserved up to $100,000 to facilitate the development of March 2009 Low-Income Housing Tax Credit applications for non-profit agencies in order to stimulate the development of additional affordable rental housing. These funds can leverage millions of dollars for investor equity.

These initial programs will set the stage for future funding by meeting the Mayor and Council’s challenge to be creative, to revolve, and to leverage other funds. They will also demonstrate to the community how the Tucson Housing Trust Fund can make a difference.

Revenue Recommendations:

The current sources of funding are not sufficient to support an ongoing meaningful effort to address housing issues in Tucson. The CAC has prepared some preliminary recommendations to the subcommittee for future funding sources to support the THTF. We are prepared to work with the Mayor and Council to obtain other community input toward successful adoption of these or other sources of revenue the Mayor and Council wish to consider more closely.

    1. Increase the Bed Tax by $1.00 per night. Dedicate this new revenue, estimated at $2 million a year, to the Trust Fund. There is a compelling argument in using revenues from visitors to support housing for Tucsonans. The employees of the hospitality industry are among many families that would benefit from the availability of more affordable housing options.
    2. Pursue a change to the Model Cities Tax Code that would allow the City to implement a Residential Rental Tax on units that rent for $1,000 or more to support the THTF.
    3. Request a voluntary contribution to the Trust Fund from all housing disciplines (Builders, Realtors, Lenders, Title Companies, etc.) at the closing of every home sold within the City.
    4. Support state legislation that would dedicate interest earned on rental Security Deposits and earned interest on Escrow Funds from home sales within city limits to the City of Tucson Housing Trust Fund.

The THTFCAC seeks subcommittee action to furthering these recommendations to the next step.

The Citizens Advisory Committee has a busy year ahead, including sponsorship of the forum, beginning program implementation, and pursuing dedicated funding. The staff will provide regular outcome reports to the Mayor and Council.

SUBJECT: Status Report on the Tucson Housing Trust Fund Citizens Advisory Committee (THTFCAC) and Initial Revenue Source Recommendations

January 18, 2008

Page Three

In conclusion, the Citizens Advisory Committee is very excited about adding these innovative, leveraged tools for addressing affordable housing in the City. We believe these initial Trust Fund projects will be rapidly implemented and offer our services to assist Mayor and Council in establishing sufficient dedicated, recurring revenues to sustain the Trust Fund. We also invite the Mayor and Council to promote and participate in the upcoming Employer Assisted Housing Symposium.

Sincerely,

David Duffy

David Duffy, Chair

THTF Citizens Advisory Committee

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cc: Liz Miller, Assistant City Manager

Emily Nottingham, Director Community Services Dept.