Housing trust funds (HTFs) work to facilitate affordable, quality housing by creating or maintaining housing for families with low incomes; subsidizing rental housing; and supporting non-profit housing developers. Trust funds may also assist homebuyers with low incomes through down payment support, counseling, or interest subsidies, and may provide gap financing. HTFs exist at federal, state, county, and city levels.
Expected Beneficial Outcomes (Rated)
Increased access to affordable housing
Increased access to quality housing
Other Potential Beneficial Outcomes
Reduced energy expenditures
Reduced energy use
Evidence of Effectiveness
Housing trust funds (HTFs) are a suggested strategy to increase affordable, quality housing options1, 2 and minimize the displacement of residents with low incomes that can follow such neighborhood improvements3. Housing improvements have been shown to positively affect health outcomes, especially when improvements address warmth and energy efficiency4. HTFs may help meet the housing needs of families with low incomes, including the needs of those with the lowest incomes5, 6; program funds are typically designated for these families7. In a Florida-based study, HTFs appear to increase affordable housing initiatives across the state, from rural counties to large urban centers8. A Washington, DC-based study suggests that HTFs in conjunction with other programs and policies can support affordable housing options9. However, additional evidence is needed to confirm effects.
HTFs can prioritize energy efficiency improvements for affordable housing units, which can reduce energy use and expenditures10, 11. Many households with low incomes spend 20% or more of their income on energy costs10; heating is usually the largest household energy expense, often comprising 35% to 50% of annual energy bills11. Experts suggest HTFs that help households reduce energy use for heating can substantially reduce household greenhouse gas pollution that contributes to climate change, improve rent stability, and improve residents’ quality of life10, 11.
Households experiencing energy insecurity usually include children, racial or ethnic minorities, and long-term residents of neighborhoods with homes in poor condition12. Black households experience the most severe energy insecurity, which experts suggest may be a product of residential segregation and housing discrimination12, 13. HTFs that are part of multi-component initiatives that include weatherization assistance and energy efficient home improvements may improve the quality and value of homes, which supports potential wealth accumulation, addresses the disproportionate burden of energy insecurity on Black households, and helps reduce the racial wealth divide13. HTFs that increase paths to homeownership and support homeowners with low incomes may help reduce the racial wealth divide, since a significant part of the racial wealth divide at all income levels relates to lower homeownership rates and lower home values for people of color14, 15, 16.
HTFs can be used to create and support mixed-use and mixed-income housing developments6. Local agencies or governments may allocate funds from HTFs to serve groups that are not eligible for other forms of housing support and close funding stream gaps17. HTFs can also partner with other housing development funds to expand their reach; such partnerships can create jobs in housing development and new homes have economic benefits such as increasing local revenue from property taxes, income taxes, and sales taxes6. HTFs may be more successful when established with dedicated funding from multiple sources, managed within the context of other affordable housing programs, and provided with data on local housing needs and feasibility reports18.
Potential to decrease disparities: Suggested by expert opinion
Housing trust funds (HTFs) have the potential to decrease disparities in access to affordable, quality housing options between households with low incomes and those with high incomes1, 2, 6. HTFs may help meet the housing needs and support the well-being of families with low incomes, including those with the lowest incomes, families at risk of homelessness, and those at risk of displacement5, 6. Quality, affordable housing is essential to creating stable neighborhoods for the broader community6, 24 and HTFs can increase neighborhood stability and reduce displacement of residents with low incomes3, 6. A Florida-based study associates HTFs with increases in affordable housing in all types of communities, including rural counties and large urban centers8.
HTFs may also be tailored to reach communities of color and to reduce disparities in access to quality, affordable housing between minority households and white households6. The COVID-19 pandemic highlighted the extensive housing inequities faced by communities of color25. Experts suggest that additional funding for HTFs is needed to increase access to quality, affordable housing for all26.
Discriminatory housing, lending, and exclusionary zoning policies in the era of Jim Crow and government-sanctioned segregation led to the redlining practices of the Federal Housing Administration and concentrated poverty. Redlining entrenched residential segregation, denying people of color access to government-insured mortgages and making the homes in the neighborhoods where they lived uninsurable16. The Fair Housing Act of 1968 was passed to reduce housing discrimination, but it has not stopped housing discrimination against people of color or helped rebuild the marginalized neighborhoods created by residential segregation6, 25. In the present day, formerly redlined neighborhoods remain more likely to include older homes in poorer condition, meaning homes that have energy inefficient systems; lead paint, soil, or pipes; mold and other allergens; repair needs; challenges with heating and cooling; and more. These neighborhoods are often near sources of pollution, toxins, and other health hazards, such as coal-fired power plants or hazardous waste disposal sites27.
While state and local housing trust funds have been working to increase affordable housing options since the 1980s24, they were not eligible for federal funding until 199228. The federal HTF, also known as the National Housing Trust Fund (NHTF), was not created by Congress until 2008, as part of the government’s reaction to the 2008 financial crisis26. NHTF grants are funded from mortgage sales by Fannie Mae and Freddie Mac, the two largest government-sponsored housing finance enterprises in the country; however, the funds raised through this process are lower than anticipated and are insufficient to meet demand25, 26. As of 2016, nearly 75% of HTFs in the US are in states with specific legislation supporting HTFs24.
- Does your local HTF program have partnerships with other organizations with a vested interest in creating additional affordable housing, such as service providers, faith-based groups, banks, non-profit developers, housing advocacy groups, or unions? Are representatives from these groups on your HTF’s oversight board? Do members of the HTF oversight board reflect the community’s priorities?
- Has your community tried a public campaign to create or increase support for a local HTF providing safe, affordable housing?
- What funding sources are available for your local HTF? Are you utilizing funding sources that require public ballots for approval? Can key stakeholders designate or increase funding for the HTF? How can you increase funding to expand the reach of the HTF in your community?
- What community priorities can be addressed with HTF resources? How will you assess if these goals are met?
As of 2022, there are more than 800 housing trust funds (HTFs) in cities, counties, and 49 states, which generate nearly $3 billion annually to support affordable homes19. Washington, DC’s Housing Production Trust Fund is an example of a fund focused on a metropolitan area; since 2015, it has produced more than 6,000 units of affordable housing20. Non-profit organizations may manage HTFs on a larger scale: the National Housing Trust (NHT) preserves and improves affordable housing in communities across 13 states and Washington, DC. The NHT also works to promote energy efficiency and sustainability for residents with low incomes; the NHT approaches energy efficiency with a combination of policy advocacy, green lending, renewable energy, and sustainable development initiatives to reduce housing costs, improve housing quality, and reduce environmental impacts21. State-level HTFs are often administered by governmental housing finance agencies7.
The National Housing Trust Fund (NHTF) is permanently authorized by the Housing and Economic Recovery Act of 200822. The US Department of Housing and Urban Development (US HUD) allocates HTF funds annually to states and state-designated entities; all HTF-assisted housing units have a mandated minimum affordability period of 30 years23.
US HUD-HTF - US Department of Housing and Urban Development (US HUD), HUD Exchange. Housing Trust Fund (HTF).
ChangeLab-Housing toolkit - ChangeLab Solutions. Preserving, protecting, and expanding affordable housing: A policy toolkit for public health. 2015.
LISC-Affordable housing - Local Initiatives Support Corporation (LISC). Helping neighbors build communities: Affordable housing.
LHS-HTF - Local Housing Solutions (LHS). Housing trust funds (HTF). New York University, Furman Center and Abt Associates, Inc.
ACEEE-Heating - American Council for an Energy-Efficient Economy (ACEEE), Smarter House. Home systems and energy: Heating systems.
AIC-HTF - All-In Cities, an Initiative of PolicyLink. Housing trust funds (HTF).
LHS-COVID-19 response - Local Housing Solutions (LHS). Housing issues: COVID-19. New York University, Furman Center and Abt Associates, Inc.
* Journal subscription may be required for access.
1 Urban-Newman 2005 - Newman SJ. Low-end rental housing: The forgotten story in Baltimore’s housing boom. Washington, DC: Urban Institute; 2005.
2 APA-Meck 2003 - Meck S, Retzlaff R, Schwab J. Regional approaches to affordable housing. Washington, DC: American Planning Association (APA); 2003: Report No. 513/514.
3 Damewood 2011 - Damewood R, Young-Laing B. Strategies to prevent displacement of residents and businesses in Pittsburgh's Hill District. September 2011.
4 Thomson 2015 - Thomson H, Thomas S. Developing empirically supported theories of change for housing investment and health. Social Science & Medicine. 2015;124:205-214.
5 Larsen 2004 - Larsen K. State housing trust funds in the US: A comparative study. In: Adequate & Affordable Housing for All. Toronto, CAN: Centre for Urban and Community Studies, University of Toronto; 2004.
6 AIC-HTF - All-In Cities, an Initiative of PolicyLink. Housing trust funds (HTF).
7 Scally 2012 - Scally CP. The past and future of housing policy innovation: The case of US state housing trust funds. Housing Studies. 2012;27(1):127-150.
8 Larsen 2009* - Larsen K. Reassessing state housing trust funds: Results of a Florida survey. Housing Studies. 2009;24(2):173-201.
9 Howell 2016 - Howell K. Preservation from the bottom-up: Affordable housing, redevelopment, and negotiation in Washington, DC. Housing Studies. 2016;31(3):305-323.
10 NHT-Energy - National Housing Trust (NHT). Energy solutions: Energy efficiency for all.
11 ACEEE-Heating - American Council for an Energy-Efficient Economy (ACEEE), Smarter House. Home systems and energy: Heating systems.
12 Hernandez 2019* - Hernández D, Siegel E. Energy insecurity and its ill health effects: A community perspective on the energy-health nexus in New York City. Energy Research and Social Science. 2019;47:78-83.
13 Lewis 2019 - Lewis J, Hernández D, Geronimus AT. Energy efficiency as energy justice: Addressing racial inequities through investments in people and places. Energy Efficiency. 2019;13(3):419-432.
14 PRRAC-Haberle 2021 - Haberle M, House S, eds. Racial justice in housing finance: A series on new directions. Washington, DC: Poverty & Race Research Action Council (PRRAC); 2021.
15 Urban-McCargo 2020 - McCargo A, Choi JH. Closing the gaps: Building black wealth through homeownership. Washington, DC: Urban Institute; 2020.
16 Kaplan 2007* - Kaplan J, Valls A. Housing discrimination as a basis for Black reparations. Public Affairs Quarterly. 2007;21(3):255-273.
17 LHS-HTF - Local Housing Solutions (LHS). Housing trust funds (HTF). New York University, Furman Center and Abt Associates, Inc.
18 Beard 2021* - Beard V. City-level housing trust funds: Lessons from key case studies. Poverty and Public Policy. 2021;13(4):351-367.
19 CCC-HTF - The Housing Trust Fund Project, an initiative of the Center for Community Change (CCC). Housing trust fund (HTF) implementation information and resources.
20 DC-HPTF - Washington, DC, Department of Housing and Community Development. Housing Production Trust Fund (HPTF).
21 NHT - National Housing Trust (NHT). The National Housing Trust protects, improves, and maintains existing affordable housing: Policy innovation, lending, real estate development, and energy solutions.
22 NCSHA-HTF - National Council of State Housing Agencies (NCSHA). Housing trust fund (HTF).
23 US HUD-HTF - US Department of Housing and Urban Development (US HUD), HUD Exchange. Housing Trust Fund (HTF).
24 Brooks 2016 - Brooks ME. State and local housing trust funds. In: 2016 advocate’s guide: An educational primer on federal programs and resources related to affordable housing and community development. Washington, DC: National Low Income Housing Coalition (NLIHC); 2016.
25 Urban-Reynolds 2021 - Reynolds K, Lo L, Boshart A, Galvez MM. Federal reforms to strengthen housing stability, affordability, and choice. Washington, DC: Urban Institute; 2021.
26 Mueller 2020* - Mueller EJ, Way HK, Wegmann J. Freefall: Why our housing safety net is failing the lowest-income renters during COVID-19. Journal of Affordable Housing. 2020;29(2):257-269.
27 Braveman 2022 - Braveman PA, Arkin E, Proctor D, Kauh T, Holm N. Systemic and structural racism: Definitions, examples, health damages, and approaches to dismantling. Health Affairs. 2022;41(2):171-178.
28 Federal Register-HTF - Federal Register. Housing trust fund (HTF). 2015.
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