Elected leaders in Baltimore announced a major agreement on August 13, making an historic commitment of funding for affordable, decent, and accessible homes. Mayor Catherine Pugh (D) and City Council leaders will pass new tax and budget legislation that will provide $20 million annually to the Affordable Housing Trust Fund, established by voters in the 2016 November election.
The funding for the Affordable Housing Trust Fund will come from a combination of new taxes on real estate sales over $1 million, general obligation bonds, and budget allocations. This agreement is a response to growing frustration among advocates that the Trust Fund has until now been languishing without dedicated revenue. Advocates conducted extensive research with the help of a consultant to explore adequate funding sources, and one of its proposals was introduced into legislation. There was political resistance to that option, however, so advocates began another ballot initiative to pressure the City Council and Mayor to pass something to get to the $20 million promised. Advocates from the Baltimore Housing Roundtable and the Housing for All Coalition are partners in the agreement that ultimately satisfied advocates’ concerns. The pending legislation will be amended, and the ballot initiative was halted.
The agreement dictates that the city will gradually increase funding support over the next five years, reaching the $20 million threshold by fiscal year 2023. A primary source of these funds will be a new .6% excise tax on all real estate transactions above $1 million in overall value as well as a .15% excise tax on recording documents and other instruments relating to these same transactions. It is projected that the new taxes alone will generate $13 million each year. The agreement stipulates that for years when excise taxes generate more than $16 million, half of the surplus can be diverted to the general fund, while the other half is put away to help get to $13 million in years where the tax may not provide as much revenue. Mayor Pugh also committed to commit $2 million, $3.5 million, $5 million, and $7 million in each of the upcoming budgets funded through bond or general revenues.
The 2016 ballot initiative dictates that all housing and services provided through the Affordable Housing Trust Fund benefit very low income (VLI) households living at or below 50% of area median income (AMI). Additionally, at least 50% of any homes assisted in a three-year period must serve extremely low income households, those living at or below 30% of AMI. Specific eligible uses for the funding were kept broad in the 2016 ballot initiative so that the Commission, created in that initiative, would guide the Baltimore City Department of Housing and Community Development on how the money should be spent based on the needs. The housing programs being discussed by advocates include preservation and development of affordable rental units, community land trusts, legal support programs for low income renters, mental health and job training programs for this population, homeownership options, rehabilitation of vacant properties into affordable homes, and more. A press statement from Mayor Pugh’s office provides estimates of what is possible over ten years of funding at the $20 million allocation: creating or preserving 4,100 permanently affordable rental homes, rehabilitating 1,600 vacant properties, and providing eviction-prevention or housing counseling to 12,000 households.
The Baltimore City Council still must pass legislation to establish the new excise taxes. The measures are expected to pass largely because the announced agreement included leadership from Council President Bernard “Jack” Young and Housing Committee Chairman John Bullock. The City Council is expected to withstand opposition from the real estate and development interest groups because of the certainty that any similar funding measures would pass overwhelmingly if they were placed before voters on the ballot. Indeed, the ballot measure that created the Affordable Housing Trust Fund in 2016 passed with 83% of the vote. There will be a public hearing on September 27 where community members will have an opportunity to voice concerns or support.
“We are pleased to see our elected leaders responding to the clear voice of the people, and keeping their campaign promises, to reach the target funding amount of $20 million for the Affordable Housing Trust Fund,” said Odette Ramos, executive director of Community Development Network of Maryland and a leader in the Housing for All Coalition. “Our advocacy will continue beyond achieving this new funding as we work to implement the Trust Fund in an equitable manner so that it benefits Baltimore residents who need it most.”
For more information about campaign efforts to support the Affordable Housing Trust Fund in Baltimore, contact Odette Ramos at: [email protected]