Finding State Funding for “Public Purposes”

by Brian Davis

            In  1990, Ohio voters approved a Constitutional Amendment known as State Issue One that made housing a “public purpose” in Ohio.  The Ohio Housing Trust Fund (HTF) was established to address housing needs as a dedicated source of income available to help low and moderate income people achieve affordable housing.  The HTF has received from the state just over 6% annually of the funds recommended by the Governor’s Advisory Committee on Funding.

            The Advisory Committee in 1992 and again in 1994 recommended $50 million annually as a reasonable, achievable funding level for the HTF.  To date the fund has received allocations of $5 million in 1993, and $3 million in 1994 as well as 1995.

            Gary Suladonek, a west side Ohio representative, opposes state funds for housing programs.  “I never supported it.  It is not a public purpose,” Suladonek said.  “In my campaign , I didn’t promise a rose garden, nor did I promise a house with a rose garden.” Suladonek went on to say that government cannot solve all the problems in the world, and said that “a charity organization” needs to deal with the lack of affordable housing.

            The director of the Coalition on Homelessness and Housing in Ohio (COHHIO). Bill Faith, questions whether politicians are seriously responding to housing as a public purpose, as politics as usual.  “There has not been a serious attempt to deal with the trust.  I don’t think that the legislature followed [the Issue One] mandate very well.  For housing, which is expensive, $3 million does not go very far” Faith said.  He did add that the commitment looks better with the release of the Governor’s 1996-7 budget, but is still not up to the level of need.

            The 1996/1997 budget proposed by Governor George Voinovich raises the mortgage recordation fee, which is a charge for filing mortgage documents with the county recorder.  This, combined with the $3 million from the general budget, would give the HTF $12.8 million in 1996 and $16 million in 1997, depending on the volatility of the housing market.

            An increase in the recordation fee would add approximately $769 per document to the fee collected by the county recorder for filing mortgage documents. The real estate industry is on record as opposing any increase in the recordation fee because they feel it would harm housing sales.

            Karen Kerns Dresser of the Ohio Department of Development, which oversees the HTF, was very encouraged by the announcement that Voinovich was attempting to increase funding.  She said, “We do what we can to address the housing needs.”

            The Housing Trust Fund attempts to address the needs of all low to moderate income Ohioans in the area of shelter.  In Ohio, a worker with a full-time job must earn $6.80 an hour to afford a HUD “ fair market rent” unit, and must earn a full-time hourly wage of $8.38 – almost twice the minimum wage to afford a modest two bedroom apartment.

            The need for affordable housing is dramatically illustrated by the fiscal year 1994 Comprehensive Housing Affordability Strategy (CHAS) report which shows that more than one out of every five households (23%) experience some type of housing need.  Families may be living in housing that they cannot afford or that is overcrowded, or they may be one of the 147,000 Ohioans, 40% of which were families with children who experienced a period of homelessness in any recent year.

            “Housing and need affects the bottom one-fifth in terms of income,” according to Faith.  He added, “That need has been there a long time and has not been addressed by the state government.”  As of September 1994, with only $11 million allocated to the HTF since 1993, the program has made some progress in making housing a public purpose.  In addition to other rehabilitation, repair, and homeless prevention services, 205 new affordable units were constructed, 350 first-time home buyers received down payment and/or closing cost assistance, and 921 construction work jobs were created.

            Other than a few Republican representatives, support is fairly broad-ranged for the Housing Trust Fund, according to Matt Perrenod, Housing Policy Director of COHHIO.  Finding a dedicated source of revenue to achieve the $50 million annual funding goal is the problem.  Proposals for funding sources include raising the real estate conveyance and the mortgage recordation fees.

            For more information, contact the Coalition on Homelessness and Housing at 614/291-1984, or the Office of the Governor, or your local Ohio congressional representative.

 Copyright Homeless Grapevine Issue 9 March – May 1995