Legislature stops Sadowski Affordable Housing Trust Fund Sweeps, yet permanently cuts funding
Anyone following the Sadowski Affordable Housing Trust Fund over the years, knows that the fund has been ‘swept’ for other budgetary needs or priorities for over a decade. This legislative session, legislators have decided to finally ‘stop the sweeps’ and lock the trust fund from being used for general revenue or budget stabilization. However, in locking the funds, legislators elected to split the trust funds into three separate funded priorities; sea level rise / flood mitigation, wastewater infrastructure and affordable housing. This year, funding for affordable housing has been set at $200 million, which was an increase of $60 million from the initial proposal. The legislation is intended to fund each priority by a third, yet future legislatures will again have to decide what levels to fund affordable housing.
Lumber prices are putting the squeeze on affordable housing developers
Recently released data from the National Association of Home Builders (NAHB), shows lumber prices have increased 180% since last spring, causing the price to construct a single-family home to increase by more than $24,000 and $9,000 per apartment since April of 2020. As you can see from the chart below, average framing lumber prices per year have generally ranged between $250 to $450 for the past two decades and now are approaching $1,000. With funding cuts, increasing land costs and ever decreasing margins, constructing affordable housing is becoming exceedingly more difficult.
HUD Announces $693 Million for National Housing Trust Fund
HUD is more than doubling last year’s allocation in the National Housing Trust Fund, announcing communities will receive $693 million in funding for the upcoming fiscal year. Communities use these funds throughout the country to build, rehabilitate, preserve and operate affordable housing. Funds are administered as a block grant, giving States and local communities decision making and control over how the funds are utilized. As you can see from the two posts above, additional funding is desperately needed to address our affordable housing crisis.