Under governor’s proposal, Idaho’s housing trust fund will likely remain empty after all

Federal guidance doesn’t easily allow dollars to be used for trust funds, budget director says

By: - January 10, 2022 5:18 pm
Homes under construction

The Idaho Senate approved a bill creating a workforce housing development fund to help build about 1,000 units of housing. (Kelcie Moseley-Morris/Idaho Capital Sun).

Housing advocates had hoped Gov. Brad Little would announce a one-time $50 million allocation of funds to the Idaho State Housing Trust Fund for workforce housing developments, but the fund will likely remain empty this year.

Because the funds come from the federal American Rescue Plan Act, the recommendation will be to direct $50 million to a workforce housing development program to be administered by the Idaho Housing and Finance Association, said Alex Adams, Little’s budget chief, on Monday.

“Based on how the guidance came out from the Biden administration, it foreclosed the opportunity to put into the Housing Trust Fund, so the governor is not recommending funding for the Housing Trust Fund,” Adams said.

The program would provide gap financing for developers who may still need another source of funding besides conventional financing and tax credits to build housing that is affordable for middle-income earners.

“We envision a grant that could have something like equity investments, where a portion does come back to the state for years to come,” Adams said.

While Republican leaders in the Legislature were enthusiastic about most of the governor’s budget proposals, they said they need more details on this one before it will receive their support. House Majority Leader Mike Moyle, R-Star, said the Republican caucus is “cautiously optimistic,” but the devil is in the details.

“I don’t know how you plug government money into the private sector in a fair way,” said Speaker of the House Scott Bedke, R-Oakley, at a Monday news conference. “Now, that’s not to diminish that we need affordable housing, etcetera, but it needs to be available to all, it needs to be fair, and we need to answer the question of whether that’s the appropriate use of Idaho state dollars.”

At a news conference with Democratic leadership, House Minority Leader Ilana Rubel, D-Boise, also said she wanted more details before expressing support for the plan — primarily because she’d rather see the $50 million go to the trust fund. Idaho established a state Housing Trust Fund in 1992, intending to make it a source of matching funds for federal affordable housing programs. But state lawmakers never put any money into the fund, so it sat empty for nearly 30 years.

“The lowest hanging fruit is the affordable housing trust fund,” Rubel said. “That would be really simple. Put funding in that fund, it’s ready to go. We have the money, let’s put it in that fund.”

Democrats also said they have more legislative proposals related to housing that they will roll out this session if committee leadership allows them to be heard. Senate Minority Leader Michelle Stennett, D-Ketchum, said one of those is an income tax incentive for property owners to keep a residence on the rental market rather than converting it to a short-term rental like Airbnb or VRBO.

Adams said the details of the gap financing proposal will be discussed at the Joint Finance-Appropriations Committee meeting on Wednesday.

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Kelcie Moseley-Morris
Kelcie Moseley-Morris

Kelcie Moseley-Morris is an award-winning journalist who has covered many topics across Idaho since 2011. She has a bachelor’s degree in journalism from the University of Idaho and a master’s degree in public administration from Boise State University. Moseley-Morris started her journalism career at the Moscow-Pullman Daily News, followed by the Lewiston Tribune and the Idaho Press.

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