Houses under construction in Meridian. | (Kelcie Moseley-Morris / Idaho Capital Sun).

BOISE (Idaho Capital Sun) – Housing headlines from 1992's Idaho Statesman feel incredibly familiar.

Growth is depressing the number of available rents in the region

Report says Idaho has housing shortages

Officials are looking for ways to ease the strain on growth

Forum focuses on the need for affordable housing

That year, Cecil Andrus – Idaho's youngest Democratic governor – enjoyed a near-even split between Democrats and Republicans in the legislature's Senate Chamber, a relationship that has not occurred since then.

"The Democrats at the time represented growing communities across the state, including urban areas, and pushed for some housing support, particularly for low-income areas, to build affordable housing," said Mat Erpelding, who represented Boise at Idaho House from 2012 to 2019. " Idaho saw a similar growth spurt in the early 1990s, and housing construction was a struggle. "

With bargaining power in the Senate, lawmakers proposed the creation of the Idaho Housing Trust Fund, which would serve as the source of matching funding for affordable federal housing programs. Many states created housing trust funds in the 1980s and 1990s, including Arizona, California, Washington, Utah, and Oregon.

In 46 other states, a housing trust fund provides special sources of income to support affordable housing.

In Idaho, the fund exists by statute – but has never received any funding.

Nor is Idaho the only example of a state that has set up a fund and not attached a source of income. Alabama, Montana, and Rhode Island also have unfunded trusts.

Proponents say government funding will help

Housing experts lament the lack of state-level support for affordable housing in Idaho, saying that more resources would help incentivize more development.

Across Idaho there is a shortage of affordable rental housing for extremely low-income households whose incomes are at or below 30% of the Area Median Income (AMI). Many of these households are costly and spend more than half of their income on housing, making them more likely than other tenants to forego other necessities such as healthy eating and health care in order to pay rent and experience unstable housing situations such as evictions.

According to the National Low Income Housing Coalition, the affordable housing shortage in Idaho exceeded 22,200 in 2021.

According to the bill's letter of intent, the Idaho Housing and Finance Association, then called the Idaho Housing Agency, would serve as the fund's trustee for accepting private and public donations. Funds could be distributed either in the form of grants or loans to local governments and housing authorities, as well as non-profit organizations.

The bill to establish the fund was passed by the House of Representatives 65 to 18 votes and unanimously by the Senate. It came into force on July 1, 1992.

The bill outlined how to set up an advisory commission made up of seven governor-appointed members. Members would represent advocacy or community-based organizations, the real estate industry, the Idaho Department of Health and Welfare, the Idaho Department of Commerce, and the Housing Association. Whenever possible, members should represent each of the seven planning regions across the state, such as North Idaho and Southeast Idaho. However, since no source of income was ever established, the commission was never set up either.

What was not in the bill was a funding mechanism, and it has remained that way ever since.

Political debates have stalled the fund indefinitely

Gerald Hunter, president of the Idaho Housing and Finance Association, was then vice president of the organization and attended the committee hearings. Hunter said advocacy groups are driving the idea nationally, nationally and locally.

"That was probably the effort that brought this to the attention of various Idaho policymakers," Hunter said.

According to the minutes of the Senate State Affairs Committee's March 10, 1992 meeting, Hunter told the committee that the initial source of income would be interest on estate agent trust accounts, which would be about $ 150,000 a year, but more would be required, around 3.5 US dollars to reach millions in federal funding. Freeman Duncan, who was a Republican representative for Coeur d'Alene at the time, said the proposal had the support of the Idaho Real Estate Commission.

"Efforts back then were to move forward with a fully defined trust fund, which means there would be a trust fund in the structure that would be set up along with an associated source of funding," Hunter said. "Ultimately, they didn't have the legal backing to get a certain bill through with a certain source of funding, so the thought arose that maybe they could set up without the source of funding to get it on the books." In the statutes, and then they could find the appropriate source of funding in a subsequent meeting. "

Many other states use real estate-related transactions to keep a trust fund on the river with income. Many use real estate transfer taxes, which are one-time taxes or fees levied by a state or local jurisdiction when a property is sold. Others use document recording fees that are charged when a deed, mortgage, and other documents are legally captured. The amounts that go into the fund tend to be relatively small – in Illinois, $ 9 of every $ 78 recording fee goes to the trust fund, and in Kentucky, it is half a recording fee of $ 12.

The transfer fee idea has met resistance from real estate associations, including the Idaho Association of Realtors, in the past. When Idaho legislation proposed mandatory sales price disclosure, the association opposed the change as it could result in property transfer taxes. Taxes, they argue, create an affordable housing crisis by increasing real estate costs.

"It is argued that (real estate) is still a narrow band of activity, and if the state is to try to support affordable housing, it should do so in a more general way rather than targeting a specific industry," Hunter said. "So some people argue that this is really a common need in the state and should therefore be a common appropriation."

Max Pond, director of government affairs for the Idaho Association of Realtors, said opposition to the property transfer tax continues today.

"This tax only adds a significant cost to the transaction and no value to the buyer. In fact, it will price out the most vulnerable potential homeowners, "Pond said. "IR does not support adding additional financial barriers to owning home in Idaho."

Former MP Wendy Jaquet, who represented Ketchum from 2002 to 2012, said she tabled a bill in 2006 that would have allowed county voters to approve a local residential property transfer tax, but she never made it out of budget revenue and Tax Committee.

"Nationwide brokers were totally against it," said Jaquet. "Some local agents were for it, but others were actively against it. … Some felt that their commission was being undermined. They also felt that the seller and not the buyer would pay, and they felt that this was unfair in terms of representing the seller. "

Disputes over the funding mechanism were not resolved at the 1993 Legislature session, and when the 1994 general election took place, the Democrats at the national and local levels were crushed by Republicans. Seventeen Democrats in the Idaho Senate fell to eight, then to four by 1999. Today there are six.

"… will probably be a tough fight"

Over the years the idea of ​​new taxes has become a non-runner in all respects in the Idaho legislature. But other suggestions did not help either.

Senator Ali Rabe, D-Boise, is the executive director of homeless prevention group Jesse Tree and said she gave a presentation to several lawmakers and the governor's office prior to the spring 2021 legislature setting out how the trust fund might be used to help alleviate housing problems in Idaho.

In the memo, Rabe said Idaho could use the CARES Act or American Rescue Plan Act relief funds to invest in the Idaho Housing Trust Fund, and the dollars could be distributed to local governments based on a formula.

"I have met with a lot of different government officials across the state to ask them how they would use the trust fund and they are all very excited about the idea and have many ideas about how they would use it," said Rabe.

These ideas included:

  • Land banks: Places could buy land for workers' housing or other vulnerable populations.
  • Opportunity Zones: Subsidies and tax breaks would enable municipalities to define zones of opportunity for residential development.
  • Housing maintenance: Locations could contract with property developers to redevelop dilapidated and unused or run-down buildings for workers' housing.
  • Infrastructure improvements: The municipalities could pay for necessary infrastructure improvements to take into account the increased availability of housing.
  • Financial incentives: Reduced impact fees or property taxes for developers building workers' housing; a tax credit for homeowners willing to keep their rental properties in a long-term rental pool; Enabling local governments to levy or waive local taxes to solve problems caused by short-term rents; Housing tax credits for employers who offer employee housing.

But excitement wasn't the reaction she got when she presented the ideas to lawmakers.

"Basically, I have silence," said Raven. "A legislature asked me if it would cost more than a million dollars and I said yes, and it wasn't interested."

It wasn't exactly a surprise, but she was frustrated that the idea was going nowhere and was not brought up during the session.

"It will be difficult for the legislature to get involved in the current political climate because there is currently a reluctance to finance everything and solving the housing crisis is not a cheap undertaking," said Rabe. "It will cost money. Getting them to agree will likely be an uphill battle. "

When asked after the meeting and whether the governor was considering using a $ 900 million surplus in Idaho to support affordable housing, Governor Brad Little's press secretary Marissa Morrison Hyer said that remains to be clarified.

"The governor's office is working with many groups and stakeholders to address the issue of affordable housing in Idaho," said Hyer. "The state is currently in the budgeting process for fiscal year 2022 and will make decisions based on the most pressing needs of Idahoans."

source https://seapointrealtors.com/2021/07/25/idaho-established-a-housing-trust-fund-in-92-but-it-was-never-funded-what-happened/

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