Florida lawmakers shortchange affordable housing as demand soars

May 14--Many Florida communities are experiencing a renewed clamor for affordable housing options as rising home prices and rents squeeze budgets.

Yet even as housing costs continue to spiral upwards, Florida lawmakers have shortchanged affordable housing programs. Since 2001 the Legislature has swept $2.2 billion out of two trust funds created to pay for affordable housing, including $182 million taken from the trust funds in the 2018-19 state budget.

The funding sweeps have prompted some local governments -- including the city of Sarasota and Sarasota County -- to eliminate affordable housing programs and have diminished the ability of remaining programs to address community needs.

Private housing developers who rely on state and federal subsidies to build lower rent apartment complexes have been forced to compete for a smaller pot of money, resulting in fewer subsidized apartments receiving funding. There also is less money for efforts aimed at making homeownership more affordable, such as help with a down payment or home repair project.

This year Florida will spend less on affordable housing programs than in 1996, even as the state's population has exploded over the last two decades and housing costs have increased significantly in many areas.

The state agency that administers affordable housing programs estimates that the money swept from two trust funds through last year would have helped subsidize an additional 166,746 housing units -- nearly 2 percent of the state's total housing.

Many state leaders from both parties say they support fully funding affordable housing programs. But that hasn't happened in more than a decade, leaving some housing advocates discouraged, even as they vow to keep the pressure on.

Cutting programs

Sandy Sarazin earns $10 an hour as the activities director at an assisted living center in Bradenton. Her monthly take-home pay typically is around $1,500 after taxes, and she also receives a small Social Security check.

It's enough for the 65-year-old to afford the monthly mortgage payment of $536 on the small, two-bedroom West Bradenton home she purchased for $55,100 back in 1992, but not enough to put much in savings.

So when she needed a new roof, Sarazin didn't know where to turn. Her insurance company dropped her and her bank was insisting on the repairs.

"They kept sending me letters saying you've got to get that roof fixed now," she said.

Sarazin began to worry that she might lose her house and be forced into a more expensive rental arrangement, or worse.

"With the cost of rent it's like where can I go?" she said. "It's a scary feeling thinking, 'Oh my God am I going to be homeless?' I've worked since I was 14."

Eventually Sarazin learned about a home repair assistance program run by Manatee County's Redevelopment and Economic Opportunity Department. Those who qualify -- many of them elderly or disabled -- are lower-income homeowners who can't afford needed repairs.

Demand always exceeds the supply of money. Over the last year, only eight people received rehab funds out of the roughly 70 who applied. Denise Thomas, the county's housing community development manager, said the program is an important safety net.

"We become the lender of last resort for them to have safe and decent housing," she said.

It took two years, but Sarazin finally qualified for the rehab funding. The county -- using state housing trust fund money -- paid $26,111 to give Sarazin a new roof and make other home repairs.

Manatee County is receiving $503,053 from the state next year for such programs, down from $1.3 million in the current fiscal year. That means fewer people getting assistance and more people straining to pay for home repairs on their own.

Other communities have completely shut down some affordable housing initiatives.

The city of Sarasota and Sarasota County jointly operate a number of housing programs.

This year Sarasota will get $700,000 in state funding for such efforts, significantly less than previous years.

The low funding levels prompted the city's Office of Housing and Community Development to eliminate a down payment assistance program that once helped roughly 100 people annually.

"We get calls all the time from individuals looking to buy homes and they're unable to do so," said Don Hadsell, the city's housing administrator. "That would not only help those families buy homes but it also frees up rental properties that are so needed in our community. So it harms both the individual and the community in not being able to provide more affordable housing."

In Polk County, the down payment program still exists but it is expected to help only around 20 people next year, down from a high of 297 in 2005.

"We are just absolutely devastated this would happen," said Jeff Bagwell, who runs a Lakeland nonprofit that contracts with the county to run the program.

Bagwell said homeownership often is cheaper than renting for families, but many struggle to save for a down payment. A recent homeownership class run by Bagwell on a Saturday in Bartow attracted 99 people, most of whom wanted to take advantage of down payment assistance.

If these people can't afford housing, the entire economy suffers, Bagwell said.

"This money is for service providers," he said. "It's for the young lady who works at Walmart as a cashier. It's for the new policeman, new firefighter, new teacher. It's for the service providers who make the world go round."

The reduction in housing funding for the upcoming fiscal year cut is even more frustrating for advocates because they already feel cheated by years of trust fund raids.

Trust fund in name only

Florida has long depended on population growth to help fuel the state's economy, and that influx of new buyers and renters puts pressure on housing costs.

In 1992 Florida lawmakers agreed to raise the state tax on real estate transactions to pay for affordable housing subsidies. The tax hike came after four decades of intense growth that transformed Florida into a mega state, but left incomes relatively low.

Florida -- which has a plethora of lower wage service industry jobs -- still ranks in the bottom third of states for median household income. And the state is still growing. After a lull during the Great Recession, population growth has revved back up, contributing to another housing squeeze.

The 1992 law -- known as the Sadowski Act -- directed money raised from the real estate tax increase into two trust funds, the State Housing Trust Fund and the Local Housing Trust Fund.

The trust fund money is supposed to be used for two umbrella programs. One primarily doles out funds to affordable housing developers to build subsidized apartments. The other gives money to local governments to use for a variety of housing incentives, including down payment assistance and home rehabs.

Between 1992 and 2001 all of the trust fund money went toward affordable housing programs.

But the money proved to be a tempting target, and lawmakers began using some of the housing funds to plug other budget holes. Lawmakers have swept money from the housing trust funds in 14 of the last 18 years, including many years when they offered millions in tax cuts.

The amount of trust fund money swept over the last 10 years has been particularly dramatic. Of the $2.3 billion collected by the trust funds since 2009, only $866 million went toward housing programs.

The sweeps add up to a massive diversion of resources from affordable housing.

Bagwell and others argue that the state's housing trust fund money should be used solely for its original intended purpose.

"Raiding the trust fund has never made any sense to me," he said. "I mean it says trust ... learn to balance your budget without raiding the trust fund."

But the sweeps continue year after year, even as top lawmakers from both parties say they support spending more money on affordable housing.

Simple question

Last month the Sarasota Tiger Bay Club hosted a legislative panel that featured four members of Sarasota County's legislative delegation, two Republicans and two Democrats.

Former Sarasota County Commissioner Jon Thaxton, a Republican who now works on affordable housing issues for the Gulf Coast Community Foundation, stood up toward the end and asked the panel members if they supported keeping the state's housing trust funds whole.

"One of the most pressing social and economic issues of our day is the lack of affordable housing necessary to secure economic development," Thaxton said. "Yet every year the Florida Legislature continues to raid the affordable housing trust fund."

"My question is very simple," Thaxton added. "Would you support full funding of the William Sadowski affordable housing fund?"

All four lawmakers on the panel -- state Rep. Margaret Good, state Rep. Wengay Newton, state Rep. Joe Gruters and state Sen. Greg Steube -- said yes.

"Yes, 100 percent fully support not raiding the Sadowski fund," Steube said. "I've said it every year."

Yet all four of the lawmakers voted for a budget this year that swept more than half of the trust fund money. The budget passed 95-12 in the House and 31-5 in the Senate.

"The challenge becomes, you have an appropriations chairman and they sweep it in their budget and you have an up or down vote on the bill," Steube said. "You either vote yes on the budget or you vote no on the budget and you don't have a vote on whether to keep Sadowski and keep those funds there."

Senate leaders had been pushing to preserve the housing trust fund money this year. Sen. Kathleen Passidomo, R-Naples, even filed legislation aimed at prohibiting the sweeps.

"Florida's state and local housing trust fund programs are national models -- they work, but only to the degree that they are funded," Passidomo said in announcing the legislation.

But lawmakers ultimately decided to sweep much of the housing money to help pay for school safety measures after the Parkland shooting.

The budget maneuver was a blow for housing advocates who felt they were close to finally ending the trust fund sweeps.

Florida Housing Coalition President and CEO Jaimie Ross said affordable housing advocates "are feeling deflated, they're tired, they feel like they've shown how important these programs are."

But "now is not the time to give up" Ross added, noting that the 2018 election will bring in a new group of political leaders and offers a new opportunity to press candidates to support affordable housing.

"We have a tremendous opportunity in November," she said.

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