Idaho approves affordable housing funds for the first time in state's history

Idaho’s Governor Brad Little last month approved $50 million to build more affordable housing for working people. This is the first time in the state's history that Idaho’s state government has provided any funds to develop new affordable housing.

Although the state legislature created a state affordable housing trust fund in 1992, it has never approved any funding to support the housing needs of low-income renters.

The Idaho legislature created the Workforce Housing Fund with Fiscal Recovery Funds from the American Rescue Plan Act of 2021 (ARP). This money went to state and local governments who were stretched thin by the COVID-19 pandemic and recession.

The Workforce Housing Fund will be managed by the Idaho Housing Finance Authority. The money will be made available to nonprofit organizations and private housing developers. It will provide grants for “gap financing” of affordable housing construction. This means these funds will cover the final costs needed to complete projects.

Properties that use these funds to complete must charge rents affordable to households at or below 80% of Area Median Income. The rents must stay affordable for 30-40 years.

The funds will serve all areas of the state. The legislation requires that 20% of the funds go to rural communities. If these rural funds are not all spent after two years, they can be used by other communities around the state.

The Workforce Housing Fund passed the legislature with bipartisan support. This is unusual because Idaho is a very conservative state. Although the new housing money had a narrow victory in the House (37-31), it had overwhelming support in the Senate (26-9).

Governor Little had originally proposed using the ARP Fiscal Recovery Funds to support the state’s empty Housing Trust Fund. However, the State Budget Chief said that federal guidance would not allow the money to go to the Housing Trust Fund.

Although the Workforce Housing Fund will be supported with federal funds instead of state money, the state legislature did have a choice on how to spend it. These funds are flexible, and can be used to address a wide range of issues related to the pandemic.

ARP funds can help local governments maintain essential services like fire departments and police forces. They also support coronavirus-prevention measures in schools and hospitals. The governor and legislature should be commended for supporting affordable housing among so many competing needs.