U.S. Department of Housing and Urban Development Secretary Julián Castro speaking at a meeting of the U.S. Conference of Mayors in Washington, D.C., in January. Cliff Owen/AP

The National Housing Trust Fund will give housing assistance to the very poorest households in the nation.

The federal government debuted a program on Monday to provide housing for the very poorest residents in America. The National Housing Trust Fund is a new affordable-housing program, one that creates permanently affordable housing for extremely low-income households.

Julián Castro, Secretary for the U.S. Department of Housing and Urban Development, announced that $174 million in allocations for the National Housing Trust Fund would be available soon. He and other officials from HUD, along with other housing policy officials, broke down the details Monday at a forum hosted by the National Low Income Housing Coalition. Here’s everything you need to know.

  • The fund is modest: $174 million split between 50 states plus the District of Columbia and the U.S. territories doesn’t go terribly far. Still, these are funds geared toward creating new and permanently affordable housing for very-low-income and extremely-low-income residents—people who are at great risk of falling through the cracks.
  • The need is enormous: According to HUD’s 2015 Worst-Case Housing Needs report to Congress, Americans living in “worst-case” housing scenarios include families that pay more than half their income toward rent as well as households that live in substandard or unsafe housing. In 2013, this category included “2.8 million families with children, 1.5 million elderly households without children, 2.7 million other ‘nonfamily’ households … and 0.7 million ‘other family’ households.”
  • The worst-case housing category is growing:
  • Unlike other housing programs, the National Housing Trust Fund targets worst-case housing: Most housing programs, including Low-Income Housing Tax Credits, don’t generate housing for extremely-low-income or very-low-income households. HUD is developing criteria to try to make that happen with the National Housing Trust Fund. “The goal of the Housing Trust Fund is to provide ELI or VLI households with support, with primary attention on rental,” said Marion Mollegen McFadden, deputy assistant secretary for grant programs at HUD, during a panel Monday.
  • HUD still has work to do on the National Housing Trust Fund formula: The fund is a formula-based grant, meaning states (or state-designated entities) will distribute funds based on eligibility. For now, HUD has set the eligibility for affordability at the greater of 30 percent of area median income (the extremely-low-income limit) or 30 percent of the federal poverty level. That definition for affordability is a problem, according to Greg Payne, a developer with Avesta Housing and the director of the Maine Affordable Housing Coalition. “The issue of when you have 30 percent of [the federal poverty level] as opposed to 30 percent of AMI, depending on the family size and where you are, [is that] you can end up with rents of 40 to 45 percent of AMI,” Payne said during the panel. (States have the discretion to set tighter affordability limits for the formula.)
  • The National Housing Trust Fund is designed to complement inclusionary zoning: According to Nancy Rase, the former CEO for Homes for America, the National Housing Trust Fund will work best to create new, deeply affordable housing, not to rehab existing public housing. “Public housing is the question of the day. How do we stabilize and improve the public housing?” Rase says. “I never envisioned the NHT as a resource to rejuvenate affordable housing. I looked at it as a resource to create new extremely low-income housing.”
  • HUD wants to make an immediate impact: Both HUD and other housing experts acknowledged that HUD, well, doesn’t exactly move quickly. Payne, a developer and advocate, said that the funds should supplement projects that are already in the pipeline—and that affordable-housing developers and policymakers should be ready to broadcast the stories of the people whose situations are changed by the grants. “There’s no part of the process that’s fast,” Rase said during the panel. “If you put the funds toward the development that you’re just beginning to think about, it’s going to be a long time before there’s housing for people to live in.”
  • The National Housing Trust Fund has enemies: Texas Republican Congressman Jeb Hensarling and California Republican Congressman Ed Royce tried but failed to prevent the National Housing Trust Fund from going into effect. The funds come from Fannie Mae and Freddie Mac, a condition of the $187.5 billion bailout that these government-sponored enterprises received in 2008. Hensarling and and Royce have argued that redistributing housing funds to extremely poor Americans cheats taxpayers.

About the Author

Most Popular

  1. A photo of a man sitting on a bench in East Baltimore.
    Equity

    Why Is It Legal for Landlords to Refuse Section 8 Renters?

    San Jose and Baltimore are considering bills to prevent landlords from rejecting tenants based on whether they are receiving federal housing aid. Why is that necessary?

  2. A photo of Andrew Field, the owner of Rockaway Taco, looking out from his store in the Rockaway Beach neighborhood of the Queens borough of New York.
    Life

    Tacos and Transit: Rate Your City

    From taco-rich San Diego to the tortilla wastelands of Boston, we asked you to grade U.S. cities on two critical metrics: Mexican food and public transportation.

  3. A photo of shoppers in the central textile market of downtown Jakarta.
    Design

    How Cities Design Themselves

    Urban planner Alain Bertaud’s new book, Order Without Design, argues that cities are really shaped by market forces, not visionaries.

  4. Apple's planned new campus in Austin, Texas.
    Life

    Why Apple Bet on Austin’s Suburbs for Its Next Big Expansion

    By adding thousands more jobs outside the Texas capital, Apple has followed a tech expansion playbook that may just exacerbate economic inequality.

  5. Equity

    Why You Should Say 'Hello' to Strangers on the Street

    On sidewalk psychology.