Funds for Affordable Housing

Summary: In 1986 the Wisconsin Partnership proposed creation of a Wisconsin Housing Trust Fund. A statewide coalition was formed, and several trust fund bills were introduced without success. Finally, in 1989, compromise legislation was passed, appropriating more than $6 million for assistance to lower-income home owners and renters, and for grants to local housing organizations. The programs created in 1989 -- the Housing Cost Reduction Initiative (HCRI) and the Local Housing Organization Grant program (LHOG) -- remain in force and have seen continual expansion of funding levels.

Wisconsin Partnership’s role: Coalition Builder

Staff contact: Bill Perkins

Status of work: Completed in 1989

Even when sources of low-interest financing and subsidies are available, it is extremely difficult to develop affordable housing for very low-income people. This segment of the population always suffers most from the loss of federal or other funds for housing.

In 1986, soon after its creation, the Partnership published a proposal for a Wisconsin Housing Trust Fund -- a recurring source of subsidy funds to ensure that low-income housing development activities could continue even in the face of other funding cuts. Based on ideas gathered from elected officials, advocates and community-based developers throughout the state, the proposal suggested a program of grants and loans for housing construction and rehabilitation, capitalized primarily by a small increase in the real estate transfer fee. The Partnership organized and staffed a statewide coalition of trust fund supporters.

Housing trust fund legislation was introduced in the spring 1987 session of the legislature. However, the real estate lobby strongly opposed the bill because of the funding source, and the measure failed to pass. Soon after, the Wisconsin Supreme Court ruled that state financing of housing development would violate a constitutional ban against state funding of “internal improvements.” In response to this ruling, a revised housing trust fund bill was introduced, proposing funding for rental and down payment assistance rather than for construction financing. This measure also failed.

At about the same time, then-Governor Tommy Thompson appointed a 12-member Wisconsin Housing Task Force to make recommendations on the state’s role in housing. Wisconsin Partnership Executive Director Bill Perkins served on the task force and presented 15 proposals -- including a housing trust fund -- for task force consideration. Most of the Partnership’s proposals were incorporated in the final report.

In early 1989, legislation to create a housing trust fund was introduced for the third time. In the same session, the governor’s budget included funding for some of the programs recommended by the Wisconsin Housing Task Force. When an impasse over funding the trust fund again developed, the Partnership helped negotiate a compromise bill appropriating $5.5 million in state general tax revenues for home ownership and rental assistance to lower-income households (the Housing Cost Reduction Initiative, or HCRI) and $800,000 for capacity-building grants to local nonprofit developers (Local Housing Organization Grant program, or LHOG). These programs remain in existence, and funding levels continue to grow.