The Affordable Housing Trust Fund was established by the Mayor and City Council through the City’s budget process in June 2000, after the recommendations of the Housing Crisis Task Force were delivered in March 2000. The Trust Fund was provided "seed funding" of $5 million, which was immediately committed by the Los Angeles Housing Department (LAHD) to funding for proposed housing developments that were on the "waiting list" from the Notice of Funding Availability (NOFA) for that year. In the following fiscal year, $10.5 million was budgeted for the Affordable Housing Trust Fund (Fiscal Year 2001-2002).
In July 2001 a City Council Motion directed the Housing Department to report on permanent sources for the Trust Fund. A number of groups met on this issue over the course of three months. A smaller advisory group addressed the motion specifically, which included participants from the Housing Business Summit and non-profit developers.
The transmittal (report) from the Housing Department was submitted on October 30, 2001. At a joint meeting of the Budget and Finance and the Housing and Community Development Committees (H&CD) on November 14, 2001, where the LAHD transmittal was presented, the City Administrative Officer (CAO) and Chief Legislative Analyst (CLA) were asked by Council members to provide their analysis of LAHD’s transmittal and report on any other sources of funding for the trust fund. In January 2002, the Mayor held a press conference and sent out a press release announcing his $100 million proposal for the Housing Trust Fund. The CAO/CLA report was heard at another joint meeting of Budget and Finance and H&CD on February 27, 2002, and the City Council adopted the revised recommendations from the joint committee meeting, during the City Council’s March 1, 2002 meeting.
A multi-year funding plan based on the Mayor’s proposed plan, was approved. The first year of funding will be provided within the context of the 2002-2003 Consolidated Plan Program Year and the 2002-2003 City Budget Fiscal Year. Further, the Mayor’s Office and H&CD convened an Advisory Committee to establish a framework for an Affordable Housing Trust Fund expenditure plan.
The Housing Trust Fund Advisory Committee Advisory Committee presented their report to Mayor Hahn on November 14, 2002. Two public hearings were held on November 18, 2002 and December 3, 2002.
On February 11, 2003 City Council approved the Housing and Community Development Committee report recommendations to approve the following percentages for the Housing Trust Fund as general guideposts for expenditure until the guidelines are established, as listed in the Mayor’s report dated February 3, 2003:
- 60% for multifamily rental projects serving households at or below 60% of the Area Median Income (AMI).
- 20% for projects that create home ownership opportunities for households at or below 120% of AMI.
- 5% for emergency rental assistance.
- 10% to remain flexible with the priority going toward preservation of housing that is at risk of converting to market rate.
- 5% for administrative costs.
In March 2003 the City approved awarding Trust Fund dollars to 13 affordable housing development projects seeking to leverage Proposition 46 state housing bond funds (Multifamily Housing Program) and State of California Low Income Housing Tax Credits.