The City of Chicago established a Low-Income Housing Trust Fund - the largest locally funded rental subsidy program in the country. The Fund works very much like the Section 8 voucher program, assisting those earning below 30 percent of area median income, but is funded at the local and state level.

In 2007 the Trust Fund supported over 2,800 units of affordable rental housing units. Over 1,500 of those units reached those earning below 15 percent of area median income, a population that is traditionally very difficult to house. On average, the cost comes to about $254 a month per unit – a small price to pay to keep these families off of the streets and into decent housing.

The Fund receives revenues from a state-collected $10 real estate transfer fee. The City of Chicago allocates money from its general fund each year, contributes $1 million annually from the leasing of a toll road know as the Skyway to a private entity, and uses revenue from an affordable housing fee on new downtown residential development. In all, the Fund collects $23 million in revenues.

This is a practical solution for all of the cities that are currently facing an affordable housing crunch (which means every city). Different cities may need to find different types of funding streams (because of the housing crisis, revenue from real estate transfer fees is declining), but Chicago supplies a model that should be replicated.