An Ashland City Council majority voted Tuesday night to create an affordable housing trust fund using federal funds.

An Ashland City Council majority voted Tuesday night to create an affordable housing trust fund using federal funds.

Back in 1985, the city gave out rehabilitation loans using federal Community Development Block Grants. The 0 percent interest loans only have to be paid back when property is sold, refinanced or inherited.

At the beginning of the fiscal year on July 1, 21 of the loans had not yet been paid back. The loans had a total value of $99,843.

But during July, four loans worth $19,652 were paid back.

The Ashland Housing Commission recommended that those July loan repayments, and any future repayments from remaining loans, be placed into an affordable housing trust fund.

That money alone wouldn't be enough to pay for affordable housing, but the trust fund could be buttressed by private donations, grants and other funding, housing commissioners hope.

City Councilor Alice Hardesty said that placing the loan repayments into an affordable housing trust fund makes financial sense. For every dollar the city earmarks for affordable housing, it can usually attract $4.89 in other funding.

Ashland Senior Planner Brandon Goldman, who previously worked as the city's housing program specialist, said federal Community Development Block Grant funding the city gets each year for affordable housing can only be used to buy land, not to pay for materials and construction.

But the city can choose how to use the repayments from the past loans. Previously, those repayments have been used for capital projects, such as installing an elevator at City Hall downtown.

Goldman said he could envision organizations using annual federal Community Development Block Grants to help pay for land, and then using loan repayment money from the trust fund to pay for materials and construction.

"They may apply to the trust fund to help fill that gap," he said.

Councilor Eric Navickas thanked Goldman and the volunteers who serve on the Ashland Housing Commission for their work in identifying a funding source for a housing trust fund.

"I strongly support this and see it as a valuable tool," he said.

Councilor David Chapman cast the only vote against formation of the trust fund.

He said affordable housing is a good goal and the city government has a role to play in its creation, but he didn't want to use city staff time to manage the trust fund. Instead, Chapman said an outside organization should have a housing trust fund.

Staff writer Vickie Aldous can be reached at 479-8199 or vlaldous@yahoo.com. To post a comment, visit www.dailytidings.com.