Democratic mayoral candidates Darryl Neher and John Hamilton both have suggested reviving the “dormant” Housing Trust Fund to address the chronic lack of low-cost and affordable housing in Bloomington.

“I support creative financing of affordable housing, such as … activating our long-dormant Housing Trust Fund,” Hamilton wrote in response to a question from the League of Women Voters.

"The HTF has been dormant, but it can once again be a valuable tool with an infusion of dollars from federal grants and private sector participation.” - Darryl Neher, Democratic mayoral candidate

To the same question, Neher responded: “Another opportunity is to recapitalize the Housing Trust Fund as a vehicle for the city to support and/or develop affordable housing projects. The HTF has been dormant, but it can once again be a valuable tool with an infusion of dollars from federal grants and private sector participation.”

Candidate John Linnemeier did not specifically mention the HTF in his questionnaire, but he called for the construction of more “decent affordable housing” on West 11th Street, which was known as “Pigeon Hill” when his father oversaw the construction of public housing units there from the mid-1950s through the mid-1970s.

“I believe they should be expanded to meet the growing needs of poor people trying to get a leg up and in need of decent housing,” he wrote. “We should continue to seek out federal funding to expand this program.”

Other approaches they suggested are requiring developers to include low-cost housing in their projects and attracting more federal funds to aid in the pursuit.

The Primary will be held on May 5. The winner of the Democratic race will face little opposition in the November General Election.

 
The Housing Trust Fund has $900,000, is tainted by history

The HTF was passed amid controversy by the City Council and signed by Mayor Tomi Allison in December 1995. Its mission is to:

  • "Provide financing for the creation and preservation of affordable housing for the low-income population of the community through acquisition of land and structures, and the construction and rehabilitation of affordable housing.  The fund shall be used primarily to provide long term affordable housing."

Established through the Bloomington Community Foundation, the HTF is overseen by a board of directors appointed by the City Council and mayor and is  administered by the City of Bloomington’s Housing and Neighborhood Development (HAND).

"I support creative financing of affordable housing, such as … activating our long-dormant Housing Trust Fund." - John Hamilton, Democratic mayoral candidate

The fund’s balance on Dec, 31, 2014, was $890,771, HAND Director Lisa Abbot wrote in an email. That includes an endowment of $198,981 and a loan pool of $691,790.

The loan pool has $172,947 for permanently affordable housing and $518,84 for 10-year affordability.

According to Abbot, one reason the fund been dormant is because it and HAND’s affordable housing funding have the same income restrictions, but the HAND funds are better deals.

“The Housing Trust Fund, for the most part, provides low interest loans,” she wrote. 

HAND provides conditional loans that, if conditions are met, become grants.

“The HTF is used when projects need more funding than HAND can provide,” she wrote.

The HTF program was created at a time when the effective eviction of artist-class tenants in the Allen Building on Kirkwood Avenue above the Uptown Café had to led to a wave of affordable-housing activism.

A nonprofit group called Citizens Acting Together for Cooperative Housing (CATCH) formed to purchase homes in Bloomington for tenants to share cooperatively. Its first purchase, known at the time as the “CATCH House,” was located on South Lincoln between First and Dodds Streets.

Two month before the council created the HTF, the CATCH program became mired in controversy when the group defaulted on a loan, and three Democratic City Council members – Jim Sherman, Jack Hopkins, and Anthony Pizzo – helped the cause with $18,000 of their own money.

 
Forcing developers to provide low-cost housing, other ideas

In addition to the Housing Trust Fund, Hamilton and Linnemeier cited inclusionary zoning as a tool to be employed in pursuit of more affordable housing.

"We should require that builders include some percentage of affordable housing in their plans." - John Linnemeier, Democratic mayoral candidate

“I support inclusionary zoning – requiring new developments to set aside a certain percentage of units for lower income tenants or owners – to increase the supply of affordable units and keep rents down,” Hamilton said.

Linnemeir concurred: “We should require that builders include some percentage of affordable housing in their plans.”

Neher called for stronger policies that support more affordable housing to be clearly outlined in the upcoming Growth Policies Plan revision and to pursue them when the city zoning code.

And he said the city should focus on a combination of existing incentives and not rely on inclusionary zoning, which is being attacked by Republicans in the Legislature.

“We must consider ways to use the tools we currently have available to incentivize affordable housing: tax abatements, non-financial incentives, and possible use of Tax Increment Financing (TIF) dollars,” he said.

That combination, he said, would encourage “development and/or inclusion of affordable housing units from developers in exchange through financial incentives, city investment in infrastructure, and possible tradeoffs such as increased density, modified use restrictions, changes to parking requirements, and expedited permitting.”

Linnemeier said the city should preserve existing affordable housing using an affordable housing maintenance program and engage the private sector.

“We should identify suitable sites for developers to build affordable housing and include tax incentives and perhaps even subsidies to encourage builders to provide affordable housing rather than more lucrative larger homes,” he said.

Hamilton said he would identify a dedicated revenue source for affordable housing – such as a real estate transfer fee – and help nonprofits build or acquire homes that need upgrades or preservation for new low-income owner/renters.

“I support combating poverty and homelessness,” he said, “by attracting additional federal funds for supportive housing, including repeating our efforts at Shalom bringing in $1 million in new federal funds to create Crawford Homes to house and support some of Bloomington’s most disadvantaged.”

Steven Higgs is editor and publisher of  The Bloomington Alternative.