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Polk County, Iowa. A new homeowner, stands in front of his home bought through Community Housing Development Corporation with assistance from the Polk County Housing Trust Fund.

What defines a housing trust fund is securing a dedicated revenue source. This means that the source of funding is committed by law to generate funds for the housing trust fund. Thus, by resolution, ordinance or legislation, a certain percentage or amount of public funds are automatically deposited in the housing trust fund each year. Securing a dedicated revenue source for a housing trust fund is a significant advance over the way low income housing has historically been funded. With a dedicated revenue source, advocates no longer have to argue for scarce resources with city council members, county commissioners or state legislators during the annual budget process. They will no longer have to compete with other worthy causes in a budget process that is generally neither fair nor generous towards low income housing. The dedicated revenue source guarantees a regular, but possibly fluctuating, source of funds.

But dedicated is a fuzzy term. While some funds are truly dedicated, such guarantees are not always possible. In some instances, funds may be committed to the housing trust fund, but an elected body must still appropriate the funds each year. For example, a certain percentage of real estate transfer tax revenues may be committed to the trust fund by law, but the state legislature must still appropriate the funds during the budget process. So work for the most secure commitment of funds you can win. And remember that whatever a legislative body enacts as law can be undone in the same way, with a new law. So while we like to think of housing trust funds as permanent, they actually are not. Nonetheless, they are far more reliable than most of the alternatives. And, to date, only one housing trust fund with a dedicated source of revenue has been undone.

There will be numerous pressures to go for something other than a dedicated revenue source. Some people will argue for a bond issue. Others will want to search for foundation and corporate support. Others will believe that some kind of voluntary contribution process will be sufficient. And still others will suggest seeking general revenue funds. These are not bad ideas. They just don’t provide a dedicated source of revenue. These ideas may even strengthen an existing housing trust fund, but they do not create a housing trust fund. Searching for foundation or corporate support or seeking voluntary contributions is just like fund raising and will take as much, if not more, work than seeking funds through a budget process, but probably with even less success. Bonds have provided and continue to provide significant resources for housing, but they are neither long-term nor guaranteed. General revenue funds can be a very good way to capitalize a housing trust fund (that is, get it underway), but they are only a one-time infusion of funds.

Start by setting an annual amount of revenue you believe necessary to create a responsive housing trust fund.  Why is a goal important? It will be the bottom line against which you measure each revenue source you consider. If you have a $5 million per year goal, and you consider a revenue source that brings in $1.5 million a year, you know what is left for you to do. And as the process moves along, and some people suggest substitute revenue sources, these, too, can be measured against your goal, in order to determine their acceptability.

Don’t make it a large task. This figure can be based on a number of alternatives:

  • Estimate the housing needs of the trust fund’s target population. Then determine how much it would cost to address these needs. The result will likely be shocking. You may need 10,000 units of affordable housing at $50,000 each, totaling $500 million. Of course, stating such a need would scare everyone off. But remember that the housing trust fund does not provide all the money needed to address housing needs. Federal funds, other state funds and many other sources of money can be leveraged by a trust fund. So the total you determine can realistically be divided by anywhere from five to 10 to achieve your goal.
  • Estimate how much money your community’s housing providers would need to fund the projects they have the capacity to complete. This means surveying all potential developers for their best guess about how much money their proposed projects would require on an annual basis.
  • Take a look at the funding applications that have been received by other programs, such as the HOME program or the Community Development Block Grant program, and build on this information. A good estimate of need will be what was not funded by these agencies.

Your goal should be reasonable but it need not be so precise. Obviously, housing needs far exceed the revenues you are likely to win, so it will help if you make the goal both understandable and pragmatic. Other tips:

  • Do not make securing the revenue source the center of your housing trust fund effort. Securing needed revenue is difficult because providing decent, affordable housing is not a priority. Once it becomes a priority, the revenues will follow.
  • Keep the issue of where the money will come from within the larger context of why the housing trust fund is needed and what it will accomplish. The theme of your campaign will determine how you do this — housing is good for the economy, safe homes for a healthy community, etc.  For more, see the section on Making Your Case.
  • Always use your dollar goal to evaluate alternative revenue sources.

Revenue Options

It would be foolish to suggest there are an unlimited number of possible revenue sources for housing trust funds. There aren’t. But there are more than most people think. More than 40 different revenue sources have been committed to housing trust funds. And more possibilities are uncovered every year.

Be creative in looking for revenue sources. No two situations are the same, and you may uncover an idea no one has thought of. The mark of a good revenue source campaign is a willingness to search. Those who begin by thinking nothing will be found usually find nothing.

There are always reasons offered up for not going after a particular revenue source. You may be warned: “It isn’t available,” or someone may say, “It’s already committed.” Others may say, “It’s too controversial.” It is far easier to think of reasons a potential revenue source won’t work than to spend time figuring out how to make it work. The latter approach will pay off. There are many nay-sayers in the revenue source search. It doesn’t hurt to ignore them. Don’t rely on hearsay when considering possible revenue sources. If someone suggests that a revenue source is already committed to another purpose, make sure this is legislatively mandated, not just an historical assumption. Check the facts before you decide to reject a source that may appear promising.

1. Look at revenue sources committed to other housing trust funds
Look at what other housing trust funds have been able to secure as dedicated sources of revenue, because then you will know what is possible. Be careful to pay attention to which resources are available to cities, which ones counties can tap into, and which ones are controlled by states. There is no point in a city considering a document recording fee, for example, if the city does not collect this revenue source. In researching other trust funds’ funding sources, remember that states, cities and counties vary widely across the country. Laws governing sources of public revenue differ considerably from state to state.

2. Brainstorm all possibilities
Start with a group of energetic, positive people listing every possible revenue source they can think of. Make no initial judgments, so no one’s creativity will be inhibited. You may be surprised at what can come from such a session. The results are seldom disappointing, and folks often discover a great deal.

When you’ve exhausted your group’s creative suggestions, take a closer look at what’s been suggested. A few of the ideas will be obviously crazy and can be taken off the list. But don’t eliminate something unless you are absolutely positive it won’t work. An argument that “Oh, this will never fly,” or “This is already committed to the general fund,” isn’t usually sufficient to eliminate an idea. Only eliminate a potential source if it is legally impossible to use it, or it is so politically explosive that no campaign could secure it, or it is so regressive that its overall impact would be negative.

Think outside the box. New revenue sources are often debated and occasionally added to the list of possible revenue sources for a housing trust fund.  Indianapolis collects electronic filing fees for property sales disclosure forms … surely something we probably would not have considered ten years ago.  Washington collects penalties on the failure to pay transfer taxes, among other sources.  Indiana collects a tax on smokeless tobacco products.  Tucson collects unexpended funds from the utility services low income assistance program. Duluth collects casino revenues.  The New Jersey Special Needs Fund backs bonds with moving traffic violation fines. King County adds credit enhancement program revenues to its housing trust fund.  Just a reminder to leave no stone unturned.

3. Make your list of potential revenue sources
A search for revenue sources should include at least the following:

  • Taxes and fees, particularly those associated with real estate. These include real estate transfer tax, document recording fees (typically applied to more than real estate documents), developer fees (linkage and inclusionary zoning ordinances), permit fees (for development, conversions, demolitions, etc.), property taxes, tax increment financing districts, and payments in lieu of taxes as well as sales taxes, hotel/motel taxes, restaurant surcharges on meals, wheel taxes, etc.
  • Interest on market and government accounts. Market account interest includes interest on real estate escrow accounts, interest on title escrow accounts and interest on tenant security deposits. Interest on government accounts is an increasingly popular revenue source. It includes interest from a rainy day fund; interest from the unnamed, unclaimed property fund; and interest from many other funds.
  • Government-owned property and repayments. The sale of government-owned property may not be a regular source of income, but it can be a very useful one, in combination with other sources. Income from the lease or operation of government-owned property like parking garages, or development funded through federal CDBG, UDAG or HOME funds, can add up. Repayments from government loan programs such as CDBG or HOME are also useful. Unclaimed lottery winnings are another potential source. And reserve funds from bond issuing agencies are another alternative.

4.  Evaluate the revenue sources
The work you have done so far is likely to yield a handful or more of potential revenue sources. You will probably not know everything you need to know about them to accurately evaluate their potential. It is one thing to put together a good list of possible revenue sources, but it is quite another to know how feasible it is to get these revenue sources committed to the housing trust fund and whether they are the best sources to go after.

Folks are always looking for a revenue source that will not create any opposition— that will magically appear and will please everyone. Such a source probably does not exist and when it does, it is already being used for something. A search for it may take the hunt in the wrong direction. Opposition accompanies almost every potential revenue source and is simply part of the equation you must consider.

To narrow your list of revenue sources, answer the following questions:

  • How much income does this revenue source generate in any given year? Study the revenue source over several years to see how much the revenue fluctuates from year to year.
  • Who collects the revenue and how is it regulated? Is it collected at the local level, regulated at the state level? Are there options for increasing the tax or fee at the local  level? Is there a cap on how much this tax or fee can be increased?
  • What is required to increase the tax or fee? Does an increase require a majority vote of elected officials? Does it require a public vote? Must it be approved at the state level?
  • Can revenue from this source be dedicated to a specific purpose and, if so, to what? What other general laws govern the dedication of public revenues to specific purposes?
  • Where do the revenues from this source go now? Have they already been committed, in law or through tradition, to a specific purpose? Do they go into the general fund?
  • Who will be affected by what you propose? You need to understand who pays this tax or fee, whether it is progressive or regressive, and what specific industries or individuals will be affected if it is directed to a housing trust fund.  If it currently funds other certain programs, know what these are.


New money. If you go after funds that are already committed to another program or issue, you make it harder to secure a source of revenue. It is wiser to seek a new source of revenue—either by increasing an existing source or by identifying funds that are not currently dedicated elsewhere.  If you find a tax or fee increased for another purpose that will expire on a sunset date (even if it is a few years away), it may offer a great opportunity to switch the revenues to the housing trust fund.  Or consider tapping the growth in revenue from a tax or fee that is experiencing expansion.

Multiple sources. Do not get stuck on the idea that a single revenue source can provide sufficient resources for your housing trust fund. There are important advantages to securing more than one source:

  • You can bring in more money.
  • Multiple sources mean fewer fluctuations in revenues.
  • You involve more elements of the community in an issue that is community-wide.

Help In Identifying Revenue Sources

Look for friendly help. It may be possible to get a government staff person—someone in the budget office or elsewhere—to collect this information for you. Or you may be able to find a supportive elected official who will secure the needed information.  A retired or ex-staff person from a previous administration might also be able to provide some helpful hints.

Most organizations undertaking housing trust fund campaigns do their own research into revenue sources, but there are other ways to explore and identify them:

  • The official task force.  Elected officials appoint a task force to recommend potential sources of revenue for a housing trust fund. Since the task force has official status, it can more easily gain access to information, but once the recommendations are made, the task force plays no role in ensuring that its recommendations are enacted.  And all too often, individual members represent special interests that foreclose consideration of some options.
  • A consultant study. In some cases a consultant has been hired to investigate potential revenue sources. The reports are as useful as the consultants are good.

City, County and State Revenue Sources


For a list of city housing trust funds and the agencies that administer them, click here.

For more information on city revenue sources, click here.


For a list of county housing trust funds and the agencies that administer them, click here.

For more information on county revenue sources, click here.


For a list of state housing trust funds and the agencies that administer them, click here.

For more information on state revenue sources, click here.

Example Documents

Here are some sample revenue source studies from housing trust fund campaigns.  Look at what they considered, how they evaluated alternative revenue sources, and what information they presented.

Phoenix, Arizona (2008): Recommendations on Local and Regional Trust Funds

Colorado (2002): Colorado Housing Trust Fund Revenue Source Study

Indiana (2006):   The Indiana Affordable Housing and Community Development Fund

Louisville, Kentucky (2006):  An Assessment and Recommendations for the Creation and Funding of an Affordable Housing Trust Fund.

Portland, Oregon (2014): Welcome Home’s Revenue Survey

Milwaukee, Wisconsin (2008): A Discussion Paper: Funding Strategy for a Milwaukee Housing Trust Fund