Lanterna Rally

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Published: 2007

Total Pages: 200

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The gradual withdrawal of federal leadership in affordable housing has required states to step into an ever-widening gap in housing policy and finance. This has increased the influence of state housing finance agencies (HFAs), the only state-level housing agency that all fifty states have in common. This research expands current understanding of these agencies by asking: 1) how have HFA roles in creating, adopting, and implementing state housing policy evolved over time, and 2) what factors promote or constrain their ability to innovate, and how? Assisted by theories of organizational innovation and state policy innovation, innovation within HFAs is linked to a series of internal, organizational factors and external, environmental determinants, as well as forces of diffusion. This research employed a mixed methodology, using both quantitative analysis of longitudinal time-series data and qualitative case studies. Results show that HFAs are filling substantially expanded roles in addition to their three historical functions as lender, administrator, and (re)developer of affordable housing. These include housing researcher and planner, coordinator of other state entities, educator, nonprofit capacity builder, and policymaker. An event history analysis of state adoption and HFA administration of a housing trust fund since 1985 revealed that environmental determinants are more important than influences from within the organization or from neighboring states in motivating innovation. In general, states with higher rates of new, single-family development, larger black populations, and a more liberal citizenry have a higher risk of adopting a HTF policy innovation. Finally, case studies of the Illinois Housing Development Authority and the New Jersey Housing and Mortgage Finance Agency indicated a variety of factors important in promoting or constraining HFA innovation in general, including public perception of a housing crisis, state housing policy context, political leadership, interest groups, resources, organizational structure, staff attitudes and retention, and national networks. These findings have important implications for state executives and legislators, HFAs, other state agencies, interest groups, and local governments, in order to create an environment more conducive to future state affordable housing policy innovation.