State and Local Funding Sources

State and Local Government Affordable Housing Bonds
State and Local Government Affordable Housing Bondsconstitute one of the largest sources of revenue for affordable housing providers. Housing Bonds are used to finance low interest mortgages for low and moderate-income home buyers and for the acquisition, construction and rehabilitation of multifamily housing for low income renters. Investors purchase Housing Bonds at low interest rates because the income from them is tax-free. ( Private Activity Bonds (PABs) and Essential Function Bonds (EFBs) are often issued by cities and states to raise capital for affordable housing.
  • PAB:PABs are used to fund private, multi-family developments that have sufficient low-income housing set-asides to qualify for federal tax-exempt status.
  • EFB:EFBs, also known as Public Purpose Bonds, are used to finance affordable housing or other community facilities owned by state and local housing agencies.
Examples:
  • Portland, Oregon’s Housing Opportunity Bond:This bond raised more than $9 million in 2005 for homelessness housing and support.
  • Dallas, Texas’ Homeless Assistance Facility Bond: The Homeless Assistance Facility Bond raised more than $23.8 million in housing and support for the homeless.
  • Measure H- Affordable Housing General Obligations Bond: Though Proposition H failed to pass, the bond it would have authorized was intended to generate $1 billion in funding for permanent affordable housing for the homeless, the disabled, and other vulnerable populations in the City of Los Angeles.
  • Proposition 46 - Housing and Emergency Shelter Trust Fund Act of 2002: In 2002 California voters passed the largest housing bond in the nation, resulting in $2.1 billion being designated for affordable housing.
  • Proposition 1C - Housing and Emergency Shelter Trust Fund Act of 2006: Proposition 1C continued the work of Proposition 46 by authorizing the sale of bonds totaling ($2,850,000,000) to create affordable housing for low-income senior citizens; people who are disabled, military veterans, working families; people who are homeless and Domestic violence survivors and their children.

Tax Credits

Tax credits can be applied to reduce tax liability dollar for dollar.
The federal Low Income Housing Tax Credit is distributed through the states to support affordable rental housing by awarding tax credits to developers for acquisition, rehabilitation, or construction of affordable rental housing subject to various criteria. Many states supplement this tax credit with their own resources, to encourage more affordable housing production.
In addition, several states have created charitable tax credits to support certain private contributions to non-profit organizations. For example, the Arizona Charitable Tax Credit Program for the Working Poor offers tax credits of up to $400 for donations to organizations that assist low-income households. For more information,

Ballot Initiatives

The Ballot Initiative is a governmental mechanism by which a statute, originating in either the public or legislative arena, may be put before the public for a vote. Ballot Initiatives provide an alternative to relying on the legislature to pass law and, because they can be inspired by any given interest group, initiative’s can be an important source of funding for causes that interest the public, like homelessness.
To find Ballot Initiatives:
  • National Conference of State Legislatures offers a searchable database of ballot measures across the country at
  • The Local Ballot Initiative Center offers a listing of all current ballot initiative efforts at

State and Local Government Housing Trust Funds
Housing trust fundscan provide a steady stream of support for construction, acquisition and rehabilitation of housing for homeless persons. Currently, more than 350 housing trust funds have been created in cities, counties and states across the country (Community Investments [CIS], 2005, Vol. 17, p. 13). The sources of money for the creation and administration of these trust funds vary greatly from program to program. More common funding sources include property taxes, developer fees, and interest from government accounts.
Examples:
  • Miami-Dade Homeless and Domestic Violence Food and Beverage Taxcollects a one percent tax on all food and beverage sales made by businesses that are licensed by the State of Florida to sell alcoholic drinks. Motels, hotels, and establishments that make under $400,000 in annual receipts are exempt. Money collected funds such services as emergency, transitional, and permanent housing, and supportive services like food assistance, employment, and healthcare. Revenues collected from the Miami-Dade tax raises $6.8 million a year for homeless services alone (National Policy and Advocacy Council on Homelessness, 2004). Since the tax began, Miami-Dade County has collected more private dollars for homelessness than any other city in America. As a result, Miami-Dade attracts more federal dollars as well, thus enabling the community to provide needed assistance to their homeless population (Miami Dade Government Homeless Trust, 2005).
  • Washington State’s Homeless Housing And Assistance Actprovides funding for housing and services for homeless persons throughout the state with a $10 homelessness surcharge on nearly all title documents recorded by the county auditor. The surcharge primarily affects the recording of real estate transfer documents. Providing an estimated $12 million annually for housing and services for homeless persons, the measure requires participating counties and cities to prepare ten-year plans to reduce homelessness. Local plans must aim to reduce homelessness by 50% in ten years.
  • Arizona’s trust fund is unique in that fifty-five percent of its funding comes from unclaimed personal property, such as bank accounts, deposits, lay away fees, and insurance proceeds.
  • Illinois’ Affordable Housing Trust fund receives approximately $120 million annually from a real estate transfer fee.
  • For more information, see: and