Create Trust For New Homes

May 18, 2005

The run-up of housing costs in the state in recent years has a dark side. It has made it increasing difficult, often impossible, for many working people to buy or even rent a home. In some places, families are doubling and tripling up, or paying a prohibitive percentage of their incomes for housing.

The shortage of affordable housing is a millstone around neck of the state economy because companies need workers and workers need housing.

Lawmakers can do something about the problem by supporting state Treasurer Denise L. Nappier's proposal to create a $100 million housing trust fund financed by bonds backed by the millions of dollars in abandoned property the treasury acquires each year. Ms. Nappier believes the trust fund would help create nearly 9,000 units of housing over 10 years, and trigger additional construction.

A blue ribbon commission said five years ago that the state was short 68,000 units of affordable housing. Since then, the price of housing has increased 60 to 80 percent, while wages have gone up 13 to 15 percent. With the price of land continually bid up, it has become uneconomical for developers to build affordable housing.

A bill that would create the housing trust fund has cleared three legislative committees and garnered bipartisan support. It's also been enthusiastically supported by the business community, which understands the connection between housing and jobs. This has never been a secret; in the 19th century, industrialists such as Sam Colt built housing for workers.

The idea of a revolving fund to aid in the construction or rehabilitation of affordable housing isn't new; 34 states have such funds in some form. The financing mechanism proposed by Ms. Nappier is innovative, but apparently sound. She said the state has brought in an average of $37 million a year in unclaimed property since 1991, and that it would take $15 million a year to support the housing fund.

That's $15 million that wouldn't go to the general fund, but if it strengthens the state's economy by anything close to the 15,000 jobs the treasurer projects, it would be worth the investment.

Two goals would be met if the new money was spent on housing near transit stations or stops. The availability of transit lowers the cost of living for working-class homebuyers. Conversely, more customers should translate to better transit service.