HARRISBURG, PA – April 17, 2015 – (RealEstateRama) — Legislation to expand the state Housing Trust Fund statewide was unanimously voted out of respective committees in both the Pennsylvania House and Senate this week. On Monday the House Urban Affairs Committee voted 23-0 in favor of House Bill 792, and today the Senate Urban Affairs and Housing Committee voted 11-0 to advance Senate Bill 566. Both measures now head for consideration by the full legislature.
Under the proposed legislation, the state Housing Trust Fund – currently only available in 37 Marcellus Shale producing counties – would receive 40% of the growth in revenue from the Realty Transfer Tax to expand the program statewide, capped at $25 million per year. The expansion of the program has the potential to spur a $57 million economic impact, adding up to 500 new jobs and an additional $2.9 million in state tax revenues while also increasing the supply of homes within reach of Pennsylvania’s most vulnerable citizens.
“Ever since our victory in establishing the Housing Trust Fund nearly five years ago, we have relentlessly pursued additional funding to expand this essential program to so many individuals and communities throughout the Commonwealth in need,” said Liz Hersh, executive director of the Housing Alliance of Pennsylvania. “The tremendous growth in support from legislators on both sides of the aisle is proof that the model works. There are too many struggling families, disabled citizens, veterans and others to wait any longer.”
The Housing Trust Fund, officially called the Pennsylvania Housing Affordability and Rehabilitation Enhancement Fund (PHARE), was created in December 2010 and got its first revenue source in February 2012 from the Marcellus Shale Impact fee. It has since funneled $26 million into affordable homes in the Shale region with almost 2,900 households being helped through rental rehab, homeowner repairs, rental assistance, site preparation, new construction and a wide range of activities based on local needs.
The money to pay for the expansion would come without creating new fees or raising taxes. Instead, revenue would be drawn from future growth in the Realty Transfer Tax as the real estate market continues to rebound. Based on current growth, the Housing Alliance forecasts it would probably take until 2019 to reach that $25 million ceiling. The transfer tax equals 1% of the sale price of a property and the state expects the tax to bring in close to $450 million this year.
“Investing in the housing market is an economic powerhouse that will create jobs, address both blight and homelessness, and bolster the housing market through rehab and development. This is a way to accomplish those things without raising taxes,” said Representative Thomas Killion (RDelaware), the primary sponsor of House Bill 792. “My colleagues in the House, just as I do, hear from constituents on a regular basis who could use this support – single mothers struggling to keep a home for their children, veterans battling with homelessness, and so many others. Like the Housing Alliance, I am committed to seeing this through until it becomes a reality.”
Senators Elder Vogel (R-Beaver) and Shirley Kitchen (D-Philadelphia) are the prime cosponsors of Senate Bill 566, introduced with 23 bipartisan co-sponsors. House Bill 792 is supported by 40 bipartisan co-sponsors.
“Every dollar revolves around local needs and priorities. It’s all geared towards reducing homelessness, removing blight, creating jobs and revitalizing communities by investing in Pennsylvania’s urgent need for more affordable housing,” said Senator Vogel. “But because that investment stems from the Commonwealth’s Marcellus Shale impact fee, it’s also only active in Pennsylvania’s 37 counties with natural gas drilling wells. Even in counties where it’s working, like those in my Senatorial district, so much more is yet to be accomplished.”