Pennsylvania Governor Josh Shapiro signed into law on July 11 the 2024-2025 Commonwealth Budget, which increases the funding cap for the Pennsylvania Housing Affordability and Rehabilitation Enhancement Fund (PHARE) from its current level of $60 million to $100 million. Additional provisions of the new budget expand tax credits for the creation of affordable housing, increase funding for legal counsel for tenants, and raise funding for homeless assistance programs. The Housing Alliance of Pennsylvania, an NLIHC state partner, led advocacy efforts to increase the cap for the PHARE fund, which will rise by $10 million every year, beginning in 2024, until it reaches the new $100 million cap in 2027.
PHARE is a very flexible funding source administered through the Pennsylvania Housing Finance Agency and primarily funded by the Realty Transfer Tax. The fund is popular with legislators because it can be used to support a wide range of programs, such as affordable housing preservation, development, rental assistance, housing navigation, landlord/ tenant mediation, and eviction prevention. At least 30% of funds awarded to each project must benefit households earning below 50% of the area median income. In many rural parts of Pennsylvania, where it is difficult and costly to develop and operate affordable housing, PHARE is the only source of funding available. This year’s $10 million funding cap increase will enable more projects to be funded when PHARE awards are announced in the spring of 2025.
In addition to increasing the funding cap on PHARE, the 2024-2025 budget included an increase in the tax credit allocation for the Neighborhood Assistance Program (NAP) from $36 million to $72 million. NAP supports neighborhood improvements in disadvantaged communities, including the creation of affordable housing. The State’s Homeless Assistance Program also received a modest $5 million increase, and $2.5 million in new funding was approved for legal counsel for tenants, bringing the program total to $5 million. Since the pandemic, advocates in Pennsylvania have worked diligently to track and evaluate eviction mediation programs, which have a 98% success rate in the state. They hope to build on the newly available funding in 2025 with a much larger program that provides mediation services, legal counsel, and emergency rental assistance funds to each Pennsylvania county.
The Housing Alliance of Pennsylvania has been advocating to raise the PHARE funding cap to $100 million for several years. The organization was pleased that the Governor included the $100 million cap in his 2024-2025 budget proposal, which eliminated a funding formula that had constrained the fund at $60 million. Throughout the year, Housing Alliance of Pennsylvania staff worked hard to educate legislators about the program and connect them with partners on the ground who were successfully using PHARE funds to improve their districts. They focused their advocacy on the Senate Republican caucus and the new leadership team and made sure projects in rural counties were highlighted. Other advocacy strategies included an advocacy day at the state Capitol, an organizational sign-on letter, op-eds, and other media engagement.
“It’s great to celebrate a huge win for a program that does so much for so many across the Commonwealth,” said Phyllis Chamberlain, executive director of the Housing Alliance of Pennsylvania. “Our advocacy campaign engaged so many different partners in every corner of the state and the message was received loud and clear by legislative leaders and the Governor’s office. We’re extremely proud of the hard work that went into making a $100 million PHARE program a reality.”
“Together, we can do more,” said Dana Hanchin, chief executive officer of HDC MidAtlantic, an NLIHC member. “At HDC MidAtlantic, we elevate and amplify resident voices, working with policymakers and elected officials to strengthen housing programs. The PHARE campaign shows how collective advocacy can increase critical resources for affordable housing, transforming people’s lives, investing in our communities, and building a better future for all.”
Now that the PHARE cap has been significantly increased, the Housing Alliance of Pennsylvania plans to evaluate how PHARE funds are spent and determine whether it should make recommendations about prioritizing funds for certain household income levels or project categories.
For more information about the Housing Alliance of Pennsylvania, please visit https://housingalliancepa.org/