Highland Park, Illinois Affordable Housing Trust Fund History

Highland Park, Illinois Affordable Housing Trust Fund

History

• The Housing Trust Fund is an outgrowth of the process begun in the late 1990s to update the City of Highland Park’s Comprehensive Master Plan.

• The City Council directed the 25 year old Housing Commission to develop an affordable housing plan as an element of the Master Plan.

Context for Affordable Housing Plan

• Rising land values

• Loss of affordable units

• Limited options for people who live or work in the community

• Increasing difficulty in recruiting/retaining workers

Master Plan Process

• Review of best housing practices

• Recommended strategies to promote affordable housing include:

• Establish Housing Trust Fund
• Create a Community Land Trust
• Adopt an inclusionary zoning policy

• Flexible tools tailored to local needs

Implementation

• City Council adopted the Affordable Housing Plan as an element of the City’s Comprehensive Plan in January of 2001

• Affordable Housing Trust Fund was established by ordinance of the City Council in May 2002

• Community Land Trust was created in March 2003

• Inclusionary Zoning Ordinance passed by the City Council in August 2003

Key Issues for Highland Park’s Housing Trust Fund

• Purpose

• Beneficiaries

• Oversight and Administration

• Program

• Funding

Purpose

• To provide a reliable and flexible source of local funding for activities that address the affordable housing needs of low-and moderate-income people who live or work in Highland Park

Beneficiaries

• HTFs target households with incomes ranging from 30% AMI to 120% AMI

• Highland Park’s program requirements impose income limit of 100% AMI, with emphasis on 80% AMI or below

• Priority for people who live or work in community

Oversight and Administration

• Highland Park’s Housing Commission is designated as the oversight board

• It has sole responsibility for approving funding awards – removing the funding award from the political process

• Commission is assisted by a 7-member Advisory Committee

Elements of Operations

• Setting annual goals and budget

• Establishing policies, funding priorities, program requirements, procedures for disbursing awards

• Preparing notices of fund availability or requests for proposals

• Reviewing applications, approving and monitoring awards

• Evaluating HTF activities

• Reporting to City Council

• Fiscal management of fund

Program Examples

• Housing production (new construction, rehab, rental, ownership)

• Acquisition

• Rental assistance

• Home buyer assistance

• Land trusts

• Preservation of existing housing

• Housing-related services

• Capacity grants to support not-for-profits that address affordable housing needs

Highland Park Program

• Broad latitude under ordinance

• Current focus: build inventory of affordable housing

• Fund housing development
• Set-aside in ordinance to support CLT operations and developments

Affordability Requirements In Highland Park

• HTF-assisted units in for-sale developments must be kept affordable in perpetuity or as long as is legally permissible

• HTF-assisted units in rental developments must be kept affordable for at least 25 years

• Housing Commission will ensure on-going affordability through a grant agreement and deed restrictions, covenants or other related instruments that run with the property

Funding Examples

• Dedicated revenue from one or more sources

• Property tax
• Real estate transfer tax
• Sales tax
• Fees (e.g., commercial linkage fees, inclusionary zoning in lieu payments, condominium conversion fees)

• Other revenue sources (non-dedicated)

• General revenue allocation
• Bond issue
• Corporate or foundation support

Funding: Highland Park

• Revenue dedicated from affordable housing demolition tax ($10,000/unit or $3,000/unit for multi-unit buildings)

• Revenue dedicated from demolition permit fee ($500/unit)

• Revenue dedicated from inclusionary zoning in lieu payments

• Revenue from sale of bond cap ($30,000 annually)

• Revenue from Commission resources (refinancing of existing properties - $1,000,000 from one property and approx. $2,400,000 from another

Use of Funds: Highland Park

• To date, Highland Park has approved grants totaling $950,800.

• 3 operating grants for HPICLT
• 2 development proposals for family housing from CLT
• 6-unit town home new construction
• 3-unit scattered site acquisition of existing homes
• 1 grant for a moderate-income homeowner rehabilitation program.

Getting Started

• Resource: Center for Community Change, www.communitychange.org

• Mary Brooks was very helpful

• Adopt ordinance

• Develop program requirements and process for use and awarding of funds

• Develop structure for program administration