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Idaho’s housing trust fund was empty for 30 years. That may soon change.

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Trinity New Hope, which owns and manages 16 single-family homes in Nampa, hopes Idaho law will change this year to reduce ‘barriers to entry’ for affordable housing investment (Courtesy of Meggan Manlove).

Several affordable housing development code changes could also be considered this session of the Idaho Legislature

Idaho established a state Housing Trust Fund in 1992, intending to make it a source of matching funds for federal affordable housing programs. But state lawmakers never put any money into the fund, so it sat empty for nearly 30 years.

That may change in this year’s legislative session, along with several other policy changes that could reshape Idaho’s affordable housing landscape.

Gov. Brad Little will reveal his budget priorities in his State of the State address to the Idaho Legislature on Jan. 10. While the details are not finalized, former Boise Democratic Sen. Ali Rabe said she expects the governor will announce a $50 million allocation to the trust fund.

Marissa Morrison Hyer, the governor’s press secretary, said the amount would not be announced until next week.

“Housing affordability is a priority for Gov. Little and will be addressed in his plan for Idaho,” Hyer said in an email to the Idaho Capital Sun. “Details of the plan are being finalized and will not be announced until his budget is made public (on) Jan. 10.”

Proposals in the works to ease Idaho’s housing crisis

Rabe, who resigned her seat in late 2020 because she moved to a different district, is executive director of Boise homelessness prevention organization Jesse Tree. She said Little has been a good partner on the subject of housing, and his staff has been receptive to efforts to address Idaho’s lack of affordable housing.

“What I appreciate about him is he’s willing to work with people to solve real problems,” Rabe said.

If Little announces the plan, the Idaho Housing and Finance Association would administer the funds. IHFA would approve grants for nonprofit developers to create affordable housing units over the next five years, Rabe said.

“This funding (would be) used to fill that gap between federal grants and private financing to help these developers meet the bottom line,” she said.

Rabe also worked on several pieces of legislation that she says will be introduced by Sen. Melissa Wintrow, D-Boise, during the legislative session that begins next week. The proposal package would:

  • Remove a requirement that affordable housing developers who benefit from a tax credit must also manage the property. Rabe said the requirement creates a disincentive for local churches and nonprofits to work on affordable housing efforts because they must use contractors for property management services.
  • Clarify and update language in Idaho Code that is outdated or ambiguous.
  • Add a new sales tax exemption for “affordable housing rented or sold to households at 80% of Area Median Income.”
  • Allow taxpayers to make a donation directly on their individual tax return to the Idaho State Housing Trust Fund.

Nampa church leaders say one change in the law could open new doors

For one local church, removing the requirement that affordable housing developers manage their own properties to keep a tax credit would be an immediate relief.

Trinity Lutheran Church in Nampa used a portion of its land to build 16 three-bedroom, two-bathroom homes in the 1990s in partnership with Mercy Housing and the Idaho Housing and Finance Association.

Mercy Housing managed the properties until 2014, when the church fully acquired the homes under a new nonprofit called Trinity New Hope.

Tami McHugh, board president of Trinity New Hope, said they were fortunate to be able to hire someone who worked for Mercy Housing as a property manager, but only part-time, which puts them in a precarious position each month of potentially losing their tax credit if they can’t manage the properties themselves.

“The thing with affordable housing is it’s a very different animal, there’s a very high level of compliance requirements,” McHugh said. “… Replacing a person with her skill set would be virtually impossible in this market.”

If the law changed to allow the church to keep its tax credit without managing the properties directly, McHugh said, they could hire a property management company that specializes in affordable housing units.

And it’s not just about Trinity New Hope’s specific situation, McHugh said. There are other small organizations that want to invest in affordable housing efforts, but the management requirement presents a barrier to entry.

“We are contacted all the time about people saying, ‘We have a heart for doing affordable (housing) ministry, we have land we could use, how would we go about doing this?’” McHugh said. “Our little organization can’t serve our whole county. We serve our neighborhood, but we can’t serve our county. So hopefully they’ll remove this very simple barrier for entry.”