Reed’s National Housing Trust Fund Law Delivers $3 Million to Help RI Build More Affordable Housing
WASHINGTON, DC – As a result of a law written by U.S. Senator Jack Reed, Rhode Island will receive $3 million this year to help create affordable rental housing in communities throughout the state. Senator Reed created the National Housing Trust Fund (HTF) in 2008 as part of the Housing and Economic Recovery Act, to enable housing agencies to build, preserve, and rehabilitate affordable housing for Rhode Island residents with limited means.
“This is great news for Rhode Island. I created the Housing Trust Fund to provide communities with the resources they need to help address the affordable housing shortage. Many of our neighbors who work hard still can’t afford their rents, and our state has a real need for more affordable housing opportunities,” said Senator Reed. “Affordable housing helps workers live closer to their jobs and spend more time with their families. A healthy housing market is key to future economic growth and vibrant communities where people want to live and work. These federal funds will help the state preserve and increase the number of affordable homes and strengthen our communities.”
Administered by the U.S. Department of Housing and Urban Development (HUD), the HTF is an affordable housing production and preservation program that will complement existing federal, state, and local efforts to increase and preserve the supply of decent, safe, and sanitary affordable housing for extremely low-income and very low-income households, including homeless families. This year, the HTF will provide more than $170 million dollars to states to build, preserve, and rehabilitate rental homes.
To ensure that Rhode Island and other small states received a fair amount of funding, Senator Reed included a small state minimum of $3 million in the authorizing legislation.
According to the National Low Income Housing Coalition (NLIHC), there is currently a nationwide shortage of 7.2 million affordable and available rental units for America’s 10.4 million extremely low income renter households, defined as those at or below 30% of median income in their communities.
The NLIHC’s 2016 State Housing Profile for Rhode Island shows that 41 percent of Rhode Island households rent their homes and that in order to afford a modest, two-bedroom apartment at fair market rent within the state, renters need to earn $18.49 per hour, which is almost double Rhode Island’s minimum wage of $9.60 per hour. The NIHLC also reports that Rhode Island has a deficit of 31,845 housing units for extremely low-income renters.
A recent report by HousingWorks RI also found that roughly 3,500 units of new affordable housing are necessary each year to meet the needs of Rhode Islanders, particularly millennials and retired adults, through 2025.
“The initial distribution of National Housing Trust Funds is a smart step toward strengthening our economy and expanding the supply of affordable rental housing across the country. It will allow more renters to find the home they need at a price they can afford and can also help spur local economic development,” said Senator Reed, who first began working on affordable housing trust fund legislation back in 2000.
The HTF was created in 2008, but was not funded by the two government-sponsored enterprises (GSE), Fannie Mae and Freddie Mac, before they were placed into conservatorship later that year. In late 2014, the Federal Housing Finance Agency (FHFA), which currently oversees Fannie and Freddie, independently determined that the financial operations of Fannie Mae and Freddie Mac have stabilized to a sufficient level to permit contributions to the HTF.