CHEYENNE – State lawmakers spent Friday morning searching for ways to provide more affordable housing to Wyoming residents, including solutions such as a state housing trust fund and land banking.
Discussions were led by members of the Wyoming Legislature’s Joint Corporations, Elections and Political Subdivisions Committee, state agencies and local nonprofits invested in breaking down barriers to housing development. It falls in line with the committee’s second-highest priority to address the lack of workforce housing, which they have studied throughout the interim.
“Because of housing, we can’t keep teachers, snowplow drivers, or doctors and nurses,” said Rep. Jim Roscoe, I-Wilson.
Despite stakeholders showing support for a state housing trust fund, legislators decided only to take action on land banking. There were concerns expressed that the state housing trust fund would be unconstitutional because legislative appropriations for charitable or industrial purposes are not allowed unless the recipient is under control of the state.
“Section 6 prohibits the state and its political subdivisions from loaning or giving credit to guarantee private obligations, and also prohibits these actors from making donations to private individuals or entities except for the necessary support of the poor,” said Legislative Service Office staff attorney Anna Johnson.
A state housing trust fund could be possible, but not by following the original recommendation based on Iowa’s model, which legislative staff attorneys said could be problematic because of the difference in how Wyoming’s trust funds are laid out. Wyoming is one of just three states in the nation without a housing trust fund.
Other housing programs in Wyoming already exist, but legislators hoped to find additional ways to manage the pressure on the market.
The Wyoming Business Ready Community Program doesn’t specifically address workforce housing, but Johnson outlined in a memo how it would be a helpful framework for a program, since it provides loans for infrastructure, economic or educational development projects.
There is the Wyoming Workforce Housing Infrastructure Program, which provides loans for the creation of workforce housing subdivisions or developments. However, the infrastructure must be publicly owned, and doesn’t include the building of actual houses in order to follow state statute.
The Wyoming Community Development Authority was also created for many of the same reasons as the infrastructure program, and provides low-interest mortgage loans and financial education. Opportunities are available for down payment assistance, but it is still a loan.
Advocates for a direct approach to solving the affordable housing crisis pushed for land banking. The banks are state-enabled public entities with unique governmental powers “that are solely focused on converting problem properties into productive use according to local community goals.”
“It’s a device, in part, where a municipality can clean up that kind of problem and eventually wind up with a property that is sellable,” said Sen. Charles Scott, R-Casper.
Brenda Birkle, executive director of the local nonprofit My Front Door and chair of Cheyenne’s Affordable Housing Taskforce, made her case for the land bank. She played an instrumental role along with Dan Dorsch, special coordinator for Habitat for Humanity of Laramie County, in identifying tools the Legislature could consider.
In her presentation to the committee, she described the land bank as having special powers, “including the ability to hold land tax-free, clear title, negotiate sales, convey property for other-than-monetary consideration and lease for interim uses.”
It acquires property through the expedited tax foreclosure process, lending institutions and the Department of Housing and Urban Development transferring low-value properties to the land bank, as well as private individuals and probate estates not wanting the burden of owning a property and giving it away. This, in return, can address community blights, increase the number of low- to moderate-income units, increase area property values and provide economic growth.
“Land banks are most commonly established in localities with relatively low or declining housing costs and a sizable inventory of tax-delinquent properties that the community wants to repurpose to support community goals,” according to Local Housing Solutions. “In high-cost localities, however, where there are few tax delinquent properties, land banks can serve as a vehicle for holding land purchased strategically for future affordable housing development.”
Based on the presentation and support from nonprofits, legislators passed a motion for the legislative staff to draft a bill based on Nebraska’s statutes. It would not require an appropriation from the Legislature, but rather develop legislation that enables local entities to develop interagency agreements to establish the land bank.
Housing trust fund
Although the housing trust fund that would have fallen under the Wyoming Community Development Authority’s responsibility was not supported by the majority of the committee, it did take up a significant portion of the discussion.
Sen. Tara Nethercott, R-Cheyenne, was a supporter of the housing trust fund, even with the work required make it constitutional. She was unsure whether the bill would move forward, but she encouraged efforts to be made, nonetheless.
“I do think, in light of it being one of our priority topics that this committee has chosen to take up, and hearing the overwhelming testimony from May, which I know we have all forgotten that there is an attainable housing concern – then at least we will have something tangible to work on at some meeting,” she told her fellow Corporations Committee members. “And, unfortunately, it will be our last.”
The wariness among legislators to draft the bill started hours before her call to draft the bill, and not just regarding the legal barriers.
According to the Housing Trust Fund Project, they are distinct funds established by governments that receive ongoing sources of public funding to support the preservation of affordable housing.
“Housing trust funds systemically shift affordable housing funding from annual budget allocations to the commitment of dedicated public revenue,” the advocacy organization wrote. “While housing trust funds can also be a repository for private donations, they are not public/private partnerships, nor are they endowed funds operating from interest and other earnings.”
Birkle said money from a statewide trust fund could go into local housing trust funds to create local control, and millions could be used to address housing issues. She said it could be used as gap funding for projects, to acquire and redevelop properties or land, to teach financial literacy and housing counseling, or for down payment assistance for homebuyers that are of low to moderate income.
“The good news is it’s customizable,” she told the Wyoming Tribune Eagle days before she went before the committee.
In order to implement it in Wyoming, it could be placed under the authority of agencies such as the WCDA and the Wyoming Business Council.
However, the WBC didn’t want to take on the housing affordability tool, and leadership argued its focus should be in expanding the workforce.
“The Business Council’s job is to create a housing problem. And I say that, in all seriousness, and I don’t mean to be flippant about it, but it is actually our job to create an environment where businesses can thrive, where businesses can grow,” WBC CEO Josh Dorrell testified Friday. “Housing is one component of it, but, ultimately, it’s our job to create the pressure. That creates a housing problem. And if we stay focused on that, we can create enough pressure, we can create enough of a housing problem, that will make us attractive to developers.”
Dorrell was supported by staff from Gov. Mark Gordon’s office, who argued the agency should stay in line with its duties and not take on the housing trust fund. Policy advisor Ivy McGowan-Castleberry said the governor expressed that he feels very strongly that the Business Council has a mission, that they need to work on activating new economic opportunities, and that the framework and expertise for a housing trust fund don’t currently exist.
Some lawmakers questioned whether companies would be deterred from moving into the state if there wasn’t housing, or why the private sector was having difficulty developing enough properties. Sen. Cale Case, R-Lander, stepped in to defend the private sector, and said his colleagues were forgetting how well it worked.
“I don’t think we should be so short and frustrated with what the private sector has accomplished and say, ‘Well, it’s not working right now, let’s create a program,’” he said. “I think there’s complementariness that we can pursue.”
Lawmakers will continue to try to find that balance at the next Corporations Committee Oct. 13-14.