SAN FRANCISCO—Some cities are broke. The low-income housing tax credit market is down about 30 percent, and critical bond money for housing programs in California is about to come to an end.

That’s the big state picture painted by John Stewart, chairman of The John Stewart Co., a prominent developer and manager of affordable housing in California.

After setting the scene, Stewart and others looked at possible solutions for increasing the affordable housing stock during a plenary session at the annual Non-Profit Housing Association of Northern California (NPH) conference.

At the national level, advocates are fighting to fund the National Housing Trust Fund (NHTF) that was enacted last year.

The NHTF was originally going to be funded with contributions from Fannie Mae and Freddie Mac, but when the government-sponsored enterprises ran into financial troubles, those funds were suspended, said Sheila Crowley, president and CEO of the National Low Income Housing Coalition.

President Barack Obama and Shaun Donovan, secretary of the Department of Housing and Urban Development, have supported capitalizing the fund with $1 billion, but it has not been said where the money will come from.

Meanwhile, legislation has been introduced to provide the fund with money from proceeds from the Troubled Asset Relief Program, said Crowley, who has been one of the key advocates for the NHTF.

The fund is critical because at least 90 percent of the money will go toward the production, preservation, rehabilitation, or operation of rental housing. Up to 10 percent can be used for homeownership activities.

Crowley and others continue to push for the NHTF to be capitalized.

At the state level, advocates are working on finding a permanent source of funding for affordable housing.

California voters approved Proposition 1C, a $2.85 billion bond measure to fund housing programs, in 2006. Earlier, the state passed Proposition 46, a $2.1 billion housing bond, in 2002.

The bonds have supported critical housing programs, including low-interest loans for affordable rental housing developments. However, the problem is that bonds provide a finite source of funding, and the Proposition 1C funds are expected to be depleted by 2010. That’s pushing state leaders and housing advocates to search for a permanent source of funding, which would eliminate the need to go to the ballot every couple of years.

The Department of Housing and Community Development (HCD) has held several meetings throughout the state and is analyzing possible sources, said Lynn Jacobs, HCD director.

The sources have yet to be determined, but there are several ideas, including a document recording fee on real estate transactions. Another tentative idea involves having a mortgage insurance program with a fee for affordable housing.

This year’s conference marks the 30th anniversary of NPH.