Housing Commission Proposes Trust Fund to Raise Revenue

Strapped for capital after an era of sharply reduced federal funding, the San Diego Housing Commission is proposing the creation of a Housing Trust Fund to collect revenue from a variety of sources and spend it on construction and support of public housing.

Modeled after programs that exist in 35 cities and states, the trust fund could eventually raise $10 million to $20 million annually from fees, taxes, unclaimed lottery winnings or even charitable donations, said Evan Becker, the Housing Commission’s executive director.

The trust fund would raise “revenue significant enough to make a dent in the problem, give us funding that approaches the size of the problem out there,” Becker said.

Although the commission is proposing nearly 2 dozen possible sources of funds, the most commonly used--and potentially most controversial--is a so-called “linkage fee” on commercial development.

Contributions to Pool

Under such a plan, which was considered and rejected when the San Diego City Council wrote its unsuccessful growth management plan last summer, developers would contribute to a pool of public housing money in order to earn the right to build commercial or office space. The idea has been used successfully in Boston and San Francisco, where demand to build downtown office space is strong.

San Diego’s Economic Development Corp. (EDC) vigorously opposed the concept last year, but a top official said Monday that it is worth exploring.

“We do not dismiss (linkage fees) out of hand,” said Paul Devermann, EDC vice president. “We just say that you’ve got to be very, very careful with them. You can’t just go into them because other cities have done them.”

The EDC opposed the idea last year because it would have taxed all commercial development--”that includes a 7-Eleven, a Von’s grocery store,” Devermann said--and was presented without any research to back it up.

In a briefing for reporters, Becker stressed that linkage fees are just one of many alternatives. Others include a tax on businesses based on the number of people they employ, a capital gains surcharge tax, unclaimed lottery winnings, fees for marriage and divorce licenses and a fee on applications from out-of-state banks wishing to do business in California.

Board Would Be Created

As outlined by Becker, the San Diego City Council would create a board of trustees to oversee the collection and expenditure of the revenue. The broad-based board would include representatives from community groups, government, the Housing Commission, and business and industry.

The board would make grants and loans to private developers, nonprofit groups, the Housing Commission, community groups, lending institutions and individuals. The money could be used for home construction, rehabilitation, rent subsidies, home-buyer assistance and homeless programs.

Budget cuts during the Reagan years reduced federal support for public housing nationwide from $30.2 billion in 1981 to $3.8 billion in 1988. The Housing Commission, which operates 1,354 public housing units and oversees 6,600 rent subsidies, has 19,000 people on a waiting list for those services.

Nearly 25% of city residents face a gap of $250 between what they can afford to pay for rent and the rent payments they actually make each month, Becker said.

Becker will ask the Housing Commission to endorse the trust-fund concept and authorize a six-month study of the proposal.