The Arizona state housing trust fund, one of the oldest housing trust funds in the nation, will soon double its funding as a result of the passage of HB 2666, the “Governor’s Economic Opportunity Office; Consolidation Act” recently signed into law by Governor Doug Ducey (R).
HB 2666 moves the Arizona Housing Finance Authority (AHFA) under a newly created Economic Opportunity Office and directs all net revenue from AHFA’s single-family mortgage programs to the state housing trust fund. Last year these programs generated over $2 million in net revenue, which will nearly double the current $2.5 million allocated to the trust fund. Advocates anticipate rapid growth of the mortgage program as the statewide economy continues to improve, leading to an additional increase in trust fund funding.
HB 2666 marks the first new funding for the housing trust fund since the program’s inception. The original source of funding for the 27-year-old trust fund was 55% of revenues received from the sale of unclaimed property. After the trust fund law was enacted in 1988, the trust fund revenues grew dramatically with the rapid growth in the state economy. Unclaimed property sales rose from $2 million in the first year to $40 million per year at the height of the pre-recession economic boom.
When the nationwide recession hit Arizona, however, legislators searched for places to cut spending to balance the state budget. While all social services programs have been vulnerable to cuts, housing programs especially fell victim to the austerity measures. Legislators elected to redirect the vast majority of revenue from unclaimed property sales and cap the amount that could be appropriated to the trust fund at $2.5 million, the balance being appropriated to the state’s general fund. Housing advocates in the state established the Arizona Housing Alliance (AHA), which eventually became a NLIHC state partner, in response to these attacks on the housing trust fund and other statewide housing programs.
The passage of HB 2666 this year is an impressive victory for housing advocates. They capitalized on the overwhelming popularity of the EOO proposal, as well as the Governor’s increased willingness to consider the merits of affordable housing expansion, to advocate for the new source of funding for the trust fund in HB 2666. In addition to the new funding source, the trust fund will continue to receive resources from unclaimed property sales up to the $2.5 million cap. With the additional revenue from single family mortgage programs, the trust fund will be able to support affordable housing efforts in both urban and rural parts of the state—which is important because the housing needs in rural areas often go unmet.
Advocates led by the AHA will monitor both funding sources and continue their campaign to protect and expand the trust fund. In particular, they will continue their call to lift the $2.5 million cap on revenue from unclaimed property sales. They also will work with allies in the Arizona statehouse to explore new potential sources of funding.
“After eight years of sweeps and cuts to the state housing trust fund, we are thrilled the tides have turned and the first step towards restored funding has been taken,” said Val Iverson, executive director of AHA. “An affordable home is the first step towards economic opportunity for all Arizonans, so it is fitting that funding for the housing trust fund is included in this legislation concerning economic development.”
For more information about the trust fund or other advocacy efforts in Arizona, contact Val Iverson at [email protected]