New Jersey's Special Needs Housing Trust Fund targets housing opportunity to extremely low income people

Fines and tickets collected by the courts from convictions for unsafe driving violations in New Jersey paid the debt service on taxable bonds issued by the New Jersey Economic Development Authority (NJEDA) for the $200 million New Jersey Special Needs Housing Trust Fund. The fines represented a dedicated source of revenue from the New Jersey Motor Vehicle Surcharges Proceeds Fund whose identification was key to passage of the Trust Fund Act.

Just after taking office in November 2004, Acting Governor Richard J. Codey - also New Jersey Senate President and a champion of mental health issues - signed an Executive Order creating a Mental Health Task Force charged to recommend improved access to mental health services, housing, and jobs. Housing was a key issue addressed by the Task Force, which included representatives from community provider organizations, advocacy and professional associations, including the National Alliance on Mental Illness, and government representatives.

Following the Report of the Governor's Task Force on Mental Health which also called for a shift to a Housing First strategy, Acting Governor/Senate President Codey introduced Senate Bill S2583 to establish "the Special Needs Housing Trust Fund" within the New Jersey Housing and Mortgage Finance Agency (NJHMFA) to finance special needs housing projects using proceeds of taxable bonds issued by the state's Economic Development Authority.

The legislation had 4 primary sponsors and 17 co- sponsors, indicating strong bipartisan support, which was also reflected when identical legislation was introduced in the State Assembly. Both bills passed by July 1.

Acting Governor Codey signed the legislation into law on August 3, 2005, noting: "This landmark legislation will enable people with mental illness to focus on their recovery instead of worrying about where they are going to live." At the ceremony at Greystone Park Psychiatric Hospital in Morris County, the Acting Governor stated: "It brings decency to the lives of people with mental illness, and relief to the families that care for them."

In January 2006, the first "tranche" of taxable bonds were sold. $50 million in bond proceeds was transferred to the NJHMFA. The final tranche of $150 million in bonds was issued in September 2007. The State Treasurer, Governor's office, NJEDA and NJHMFA partnered in the decision making process for the guidelines for the allocation of bond proceeds.

The Special Needs Housing Trust Fund provides capital financing to create permanent supportive housing and community residences for individuals with special needs, with priority given to individuals with mental illness. The non-lapsing revolving fund is to develop special needs housing and residential opportunities as alternatives to institutionalization or homelessness.

The Trust Fund provides financing for housing in the form of loans, grants, and other financial vehicles and investments to eligible not- for-profit and for-profit developers, as well as state, county, and local government entities. Funding for rent and operating subsidies and supportive services is not available through the Trust Fund.

Among the policy priorities of the Fund are:
- Providing permanent supportive housing and residential opportunities for persons with mental illness.
Leveraging Trust Fund capital financing. Priority is given to projects that require less than 50% of the total development cost to come from the Trust Fund. Projects sponsors are cautioned not to anticipate the Trust Fund paying for more than 80% of total development costs. Leveraged funds may come from local, county, state, federal, and private sources.
- Addressing the needs of very low- income people with special needs. At least 75 percent of Trust Fund proceeds are to benefit persons with special whose incomes are at or below 30% AMI.

Individuals who have experienced chronic homelessness benefit from stable housing improved health and well-being.

New Jersey and its communties benefit from neighborhoods with quality housing and stable residents, as well as the savings in health care and public safety costs from the new housing stability of consumers which reduces economic impact on costly community infrastructure, including health care, treatment, and law enforcement.

Housing and service partners to the Special Needs Housing Trust Fund initiatives benefit from having data that demonstrate the cost effectiveness of permanent supported housing as partners pursue more resources to create additional permanent supported housing opportunities.

To date, NJ Housing and Mortgage Finance Agency has financed 599 special needs housing opportunities for an array of populations from the Trust Fund, with about 10% of units serving people experiencing homelessness. About 14% of units serve aging out foster care youth, and 35% serve the mental health target population.

Over $58 million has been committed from the Trust Fund, which has leveraged an additional $74.6 million from other sources.

Partnerships have been established with the Departments of Human Services (DHS), Children and Families (DCF), State Parole Board (SPB) and local CoCs to coordinate project-funding streams.

DHS prioritized the development of housing to move individuals out of institutional settings in accordance with New Jersey's Olmstead Plan. DCF prioritized supportive housing for homeless and youth aging out of foster care as part of the State's Child Welfare Reform Plan. The New Jersey State Parole Board and the Juvenile Justice Commission have prioritized re- entry initiatives for special needs populations leaving the criminal justice system. The Trust Fund provides New Jersey with the means to meet the needs of diverse populations through a single comprehensive financing program and coordinated efforts.

State leaders, including then Acting Governor Richard Codey, who championed both the mental health issue and state response to housing need. The Acting Governor was recognized in 2006 by Governing magazine with its Public Official of the Year award along with Interagency Council Executive Director Philip Mangano.

The Governor's Task Force on Mental Health, which prioritized housing strategies for the recovery of people with mental illness.

Public and private sector partners who worked for the passage of state legislation to create the Fund and identified a unique funding stream to pay debt service through traffic fines.

NJ Housing and Mortgage Finance Agency, whose guidelines for the funds target at least 75% of resources to people at or below 30% AMI.

Learn more about the New Jersey Special Needs Housing Trust Fund.

Learn more about New Jersey's programs for aging out foster care youth, the reentry population, and more.

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