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Home : Knowledge Center : Housing Trust Funds Leverage Public Dollars

Housing Trust Funds Leverage Public Dollars

The Butler Family Fund has invested in preventing homelessness for many years. Through housing trust funds, this foundation has discovered new opportunities to leverage large public dollars through small grants.

A housing trust fund is a distinct fund established by city or state legislation or ordinance to receive public revenues for local housing needs. The key characteristic of a housing trust fund is that it receives dedicated, on-going revenues from some source of public funding such as taxes, fees, or loan repayments. According to Toll, "Housing trust funds are a vibrant new area of investment yielding a lot of energy and promise."

The Butler Family Fund made two grants to the development of the Philadelphia Housing Trust Fund, which launched in August 2005. Philadelphia city officials project that the Trust Fund will raise $11.5 million for the current fiscal year, which ends June 30, and $14 million in the next fiscal year.

Revenue for the Philadelphia fund is generated by doubling fees that the city charges for recording deeds and mortgages. This effort required action by the Philadelphia City Council as well as state-level enabling legislation. Philadelphia housing leaders expect to use the trust proceeds in a variety of ways to address low-income housing needs, estimating Housing Trust Funds that 65% of the income will be used to produce new homes and apartments, 30% to preserve existing homes, and 5% for homelessness prevention. Trust Fund officials estimate that the Fund will create annually 275 units of affordable housing and prevent 1000 families from becoming homeless.

Private philanthropy played a critical role in the creation of the Philadelphia Housing Trust Fund, providing the resources for the initial research and planning. "We had to research trust funds in other states, develop a proposal, and craft a strategy. We built a coalition of 110 organizations to work on this," explains Rick Sauer, executive director of the Philadelphia Association of Community Development Corporations and vice-chair of the Housing Trust Fund Oversight Board. "Without the resources of the Butler Family Fund and other foundations, we would not have the Trust Fund today."

Other supporters of the Trust Fund’s development, in addition to the Butler Family Fund, are the William Penn Foundation, the Philadelphia Foundation, the Samuel F. Fels Fund, and several corporate donors, including PNC Bank, Wachovia, Washington Mutual, and Bank of America.

Toll notes the satisfaction of seeing the foundation’s small grants blossom into greater resources. "We also made the first national grant of $20,000 to the group that developed the Los Angeles housing trust fund and now this group has $100 million annually to dedicate to affordable housing in Los Angeles."

The Center for Community Change, which operates a clearinghouse of information on housing trust funds, estimates that more than 350 funds have been established by cities, counties, and states throughout the country.