DeSantis vetoed affordable housing funds, but there’s aid for people impacted by COVID
For the first time in a decade, Florida legislators left funds earmarked for affordable housing intact rather than diverting them into a general-purpose slush fund.
But $225 million of the designated monies still won’t go to housing — at least for now.
Florida Gov. Ron DeSantis vetoed $225 million from the Sadowski funds — more than half of the total $340 million allocated — essentially freezing the money until legislators come back into session this fall and vote on an amended budget. That won’t happen until after the general election on November 3.
Pressured to cut $1 billion from the state budget due to the economic impact of the COVID-19 pandemic, DeSantis is planning to use $250 million in CARES Act money to backstop the $225 million Sadowski allocation.
The problem: While the CARES Act funds will help people purchase, repair or stay in their homes, they can only be used by households impacted by COVID-19. The Sadowski trusts are not limited to pandemic-related uses. And the CARES Act funds run out in December.
Named after William “Bill” Sadowski, the former Secretary of the Florida Department of Community Affairs, the Sadowski Housing Trust Funds are fueled by the Documentary Stamp Tax paid during any real estate transaction in the state (the rate is 70 cents on every $100 of the total transaction, except in Miami-Dade, where it is 60 cents on every $100). Because the money is in trust funds, it cannot be shifted to spending on any other project without legislative approval.
The funds are managed by the independent agency Florida Housing Finance Corp., which doles out 70% of the annual lump sum to the State Housing Initiatives Partnership program (SHIP), which provides affordable housing for low-income families.
The other 30% is given to the State Apartment Incentive Loan (SAIL), which offers low-interest loans to affordable housing developers.
DeSantis vetoed the $225 million in SHIP money but kept the $115 million in SAIL money.
Since 2003, the Sadowski trust funds have been routinely “raided” by the Legislature during the annual budget process and put into the general revenue fund to finance other projects.
Disappointment
The veto threatens to prolong Florida’s growing housing crisis. According to the Miami Affordable Housing Master Plan prepared by Florida International University’s Metropolitan Center in January, affordability is an “existential threat” that has rendered Miami the least affordable large city in the U.S., with 57% of its households (94,638) paying more than 30% of their income on housing costs, and more than 33% of renter households (39,112) spending more than half their income on rent.
The situation extends to the rest of Miami-Dade, where half of cost-burdened renters are “severely” burdened, meaning they spend more than 50% of their income on rent. For more than 55% of them, (142,466), the condition qualifies as “severe.”
Even worse, the number of severely cost-burdened renter households in Miami-Dade has increased by 13% (16,203 households) since 2012.
“This is an additional housing crisis on top of the housing crisis we already had,” said Jaimie Ross, president and CEO of the Florida Housing Coalition, a nonprofit housing advocacy group. “We do need to address the pandemic crisis right now with all the resources we can bring to bear so people don’t lose their homes. But we can’t forget that we already had a housing crisis before the pandemic. We had a great program in SHIP to address that so we need SHIP to continue.”
One of the potential problems created by the CARES Act substitution is in case of a storm. “If a person has a house in disrepair that won’t stand up when a hurricane hits, that’s not COVID-related. Homeowner repairs, getting people into first-time home ownership — that’s not COVID-related,” Ross said.
The SHIP program is needed to continue meeting housing needs that are not related to COVID-19, said Ross. The state would need to reinstate those funds by January to address housing issues unrelated to the pandemic.
In a letter sent to Sadowski Coalition Members and Affiliates, a group of 30 nonpartisan statewide organizations including United Way and AARP, Ross acknowledged the veto was disappointing. But she urged advocates not to view it as a sweep of SHIP funds.
“I think it is truly important to see that the Governor has put more money into housing than we had before,” Ross wrote in the letter. “He did not have to direct any of the CARES Act funding for housing and he did.”
Not unexpected
The veto was disappointing but not unexpected, said Ned Murray, associate director at Florida International University’s Jorge M. Pérez Metropolitan Center.
“Affordable housing has never been a high priority at the state level,” Murray said. “We should be propping up these programs, not eliminating or defunding them.”
With the budget shortfalls expected at the state and federal level to continue well into the future, it’s more important than ever for local governments to take matters into their own hands, Murray said.
He pointed to the plan FIU unveiled in January that focused on creating a local fund generated through public and private partnerships.
“We know the worst is yet to come in terms of the economic hardships that renters and owners are going to face for the next year or two,” Murray said.
Other housing authorities chose to take the glass half-full approach.
“I’m very appreciative that Gov. DeSantis left all SAIL Funds [$115 million] intact,” said Matthew Rieger, President and CEO of Housing Trust Group, the largest affordable housing developer in the state. “That, coupled with the $120 million from CARES Act for temporary rental assistance and $30 million for the Hurricane Housing Recovery Program, means that Florida Housing will receive about $265 million this year for rental housing programs.”
On July 2, Miami Homes for All will unveil a new affordable housing master plan for the county that lays out a 10-year plan to address Miami-Dade’s housing crisis.
This story was originally published June 30, 2020 at 5:21 PM.
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